Sponsored By
An organization or individual has paid for the creation of this work but did not approve or review it.



Grand Forks finances 'sitting okay' amid state funding shortfall

It's not a banner fiscal year for the city of Grand Forks. But despite lagging state aid, it's not an emergency, either. "I would say we're sitting okay," Mike Vatnsdal, city budget officer, said Tuesday morning. "We've obviously been planning ah...

Grand Forks City Hall (Herald photo/Sam Easter)
Grand Forks City Hall (Herald photo/Sam Easter)

It’s not a banner fiscal year for the city of Grand Forks. But despite lagging state aid, it’s not an emergency, either.  

“I would say we’re sitting okay,” Mike Vatnsdal, city budget officer, said Tuesday morning. “We’ve obviously been planning ahead for this.”

Vatnsdal spoke Tuesday after city leaders received an update on the city’s finances at a committee meeting on Monday night. Through the end of the third quarter, Sept. 30, revenue was at 78 percent of the year’s general fund budget, and expenses were at 72 percent. Given that city income on things like restaurant and liquor licenses don’t come in until December, Vatnsdal said that’s pretty stable.

But through three quarters of the fiscal year, state aid is only at 50 percent of the budgeted figure, which projected $4.9 million to come in before the end of the year. Vatnsdal said the state isn’t expected to hit that mark.

“State aid has the largest gap that we’re facing at the moment,” he said. “It’s obviously a floating figure that can change. Obviously, we saw a change for the worse in a short amount of time here. It can also change the other way, too.”


Vatnsdal was referring to recent years when state revenue sharing -- mostly a quarterly portion of state sales taxes -- was far larger. In 2013, for example, it was at $4.3 million. In 2014, it was at $4.9 million.

That funding shortfall has shaped a significant amount of this year’s budget discussion, with city leaders pointing to lagging state funding as one of the principal causes of the 2017 budget’s shifting numbers, along with rising employee pay and a new water treatment plant. This year’s general fund budget is at $38.7 million. Next year’s is set to be $38.6 million.

Vatnsdal said city leaders have been working to soften the blow. Revenues have been pegged a little more conservatively, and city spending has been curbed in some places, such as a roughly $330,000 budget item in 2016 and 2017 that normally sets aside spending on new vehicles.

“Obviously, it’s not easy when state aid is down, but I think our Finance Department has done a good job of trying to pay for it so we’re not in a crisis situation,” City Council member Jeannie Mock said.

A proposal to increase local sales tax rates by 0.75 percent to pay for infrastructure projects failed at the polls on Nov. 8 , costing the city about $7.75 million in annual revenue. Mock said, along with falling state aid as well as seemingly lower federal infrastructure spending, she’s most concerned about the financial impact on the city’s road maintenance.

Sen. Ray Holmberg, a Grand Forks Republican, said that there are plenty of calculations behind how state aid is distributed, but the driving mechanism is the strength of North Dakota’s economy.

“It will depend so much on what happens with oil and commodity prices,” Holmberg said of future increases to aid. “Whether it’s corn or wheat or whatever the commodity prices are, because we rely on two huge commodities -- oil and agricultural products.”


What To Read Next
Nonprofit hospitals are required to provide free or discounted care, also known as charity care; yet eligibility and application requirements vary across hospitals. Could you qualify? We found out.
Crisis pregnancy centers received almost $3 million in taxpayer funds in 2022. Soon, sharing only medically accurate information could be a prerequisite for funding.
The Grand Forks Blue Zones Project, which hopes to make Grand Forks not just a healthier city but a closer community, is hosting an event on Saturday, Jan. 21, at the Empire Arts Center from 3-5 p.m.
A bill being considered by the North Dakota Legislature would require infertility treatment for public employees — a step that could lead to requiring private insurance for the costly treatments.