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Council approves Grand Forks budget

The 2010 Grand Forks city budget passed 6-1 Monday, but some City Council members warned it could set the stage for tax increases or necessary cuts in services.

The 2010 Grand Forks city budget passed 6-1 Monday, but some City Council members warned it could set the stage for tax increases or necessary cuts in services.

The budget calls for expenditures of about $127.5 million, nearly a 6.1 percent decrease from the 2009 budget of $137.5 million. It doesn't require a mill increase on the city's share of property taxes, and has an average wage increase of 3.36 percent for city staff.

Terry Bjerke was the only Council member to vote against the budget. "I think this budget is setting up the city for increases," he said.

Doug Christensen said Bjerke may be right, since the mill levy is flat, fees remain relatively flat and sales tax collections are about at the level they were in 2008. But he said the Council would ask city department heads to recommend areas that could be cut to save money.

"I think it's our job to listen and our job to engage the citizens," he said.

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Raising taxes isn't the only solution, Mike McNamara said. Instead, he said the city departments could discuss ways to cut spending while delivering nearly all services they offer now.

Council President Hal Gershman pointed out the city has cut taxes close to 28 mills in the last decade, resulting in annual savings of close to $4 million, and said more efficiency will be needed in the future.

But Council member Art Bakken cautioned that the city may have cut too much already. "We can cut until there's nothing left, but sooner or later, you've got to fix something," he said.

Council Vice President Eliot Glassheim agreed and said the city will likely need a modest increase in mills next year. He said residents expect appropriate emergency services, street maintenance and other tax-related functions.

"In order to do that, we'll probably have to raise taxes," he said. "We've squeezed the budgets for a decade."

Exemptions

The Council also discussed three items that would expand property tax exemptions for remodeling, building and buying homes in the city. All three passed after discussion and debate, with the majority of Council members saying the exemptions could prompt more building and eventually expand the tax base.

Gershman requested Mel Carsen, city auditor, to look at changing or adding current city exemptions. The changes would result in the city losing about $150,000 of taxes each year.

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An item for new single-family, condo and townhouse properties once occupied will exempt owners for the first two taxable years for up to $150,000 in building value, up from the previous $75,000 exemption. It was passed by a 4-3 vote, with Bjerke, Glassheim and McNamara dissenting.

Another change expanded the exemption from three to five years for the added value due to renovation, remodeling or additions of residential and commercial buildings. It passed 6-1, with Bjerke voting against it.

The final change exempts builders from property tax for new single-family residential property before it's purchased by a homeowner. Bjerke was the only Council member to vote against the change.

Other news

- Bjerke requested City Attorney Howard Swanson and the Council's finance committee to review the Alerus Center's 2008 contract with VenueWorks to see if it had a pay-for-performance clause.

Bjerke said if that was in the contract, he would like to know how they did -- what was required and what happened -- and also determine if the company owes the Alerus Center money.

He asked Swanson to review the new contract to see if this clause exists now, and inform Council members how that works. Bjerke also asked the attorney to review open meetings and open records laws to see if the Alerus Center's executive committee is required to document all meetings.

"Not to say anything's wrong, but we're going to find out publicly," he said.

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Reach Johnson at (701) 780-1105; (800) 477-6572, ext. 105; or send e-mail to rjohnson@gfherald.com .

Related Topics: GRAND FORKS CITY COUNCIL
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