On the first of two votes, the Grand Forks City Council has narrowly agreed to a new budget for 2011.
The big difference of opinion in the $117.4 million budget amounted to about $500,000, or less than 1 percent of the budget. But some council members thought it was a very big shift in budgeting principle.
Most of the $500,000 in Mayor Mike Brown's budget would come from a 2 percent increase in utility fees, allowing the administration to avoid a 3.5-mill increase in property taxes. Supporters of the budget have said this allows the city to get a little more revenue from entities that don't normally pay property taxes, such as nonprofit groups.
Council Vice President Eliot Glassheim is the biggest opponent of the fees-for-taxes proposal because, he said, it's not transparent to the public. When taxes go up, voters can see it and can put pressure on the council, he said, but when fees go up, most voters think of it as an increase in the cost of utility services even though, in this case, costs didn't really go up.
His alternative proposal would raise property taxes by 2 mills, cut two positions, reduce city staff's pay slightly, cut funding from the arts and special events slightly and use the surplus in the utility fund.
ADVERTISEMENT
Had he succeeded, this would've increased city property taxes by $9 a year for each $100,000 value of a home. The mayor's proposal would increase utility fees by $13 a year for a household using 4,000 gallons of water a month.
Ultimately, though, the administration won out by a 4-3 vote. Glassheim and council members Tyrone Grandstrand and Terry Bjerke voted "no."
Long talk
Though Bjerke was sympathetic with Glassheim's position -- "A 2-percent fee increase is equivalent to 3.5 mills. That's a tax increase," he declared -- he appeared to have opposed the administration mostly because nearly all of his proposals were shot down.
Much of the roughly three-hour meeting was actually spent on a barrage of proposals from Bjerke, the most fiscally conservative council member. He proposed eliminating the repair budget for the parking ramp by Central High School, reasoning the city could sell it. He proposed cutting funding for city lobbying efforts to retain Grand Forks Air Force Base, which the city nearly lost during the 2005 round of base realignment and closures. He proposed eliminating funding for special events and the arts. He proposed cutting the recycling program.
In nearly all of these, he was the lone "yes" vote.
"This city is not in trouble," said council member Doug Christensen. The city's been through many recessions, he said, and, having talked to former or longtime finance department employees, he's of the opinion that the city has handled the economic turmoil very well.
"We're not tearing homes down and turning it to grass like Detroit," said Council President Hal Gershman. "We're building homes here."
ADVERTISEMENT
Of the total $117.4 million budget, about 85 percent goes to day-to-day operations of the city, with the bulk used for public safety and utilities. The 2011 budget is a $10.1 million reduction from this year's budget, most of it in funds for building repairs and improvement.
The council will have a final vote on the budget Sept. 20.
Reach Tran at (701) 780-1248; (800) 477-6572, ext. 248; or send e-mail to ttran@gfherald.com .
