BEMIDJI – The city’s budget was the topic of discussion at the city council meeting Monday night.
During the annual truth-in-taxation hearing, which allows residents to ask questions about the proposed budget and property tax levy, city finance director Ron Eischens outlined the city’s finances.
The proposed 2013 budget includes a 7.8 percent or $302,232 increase in the city’s property tax levy, most of which is due to capturing recently annexed properties. The budget also includes a 1 percent increase in the gas and electric franchise fees, which is projected to generate an extra $220,000.
That fee is applied to non-taxable properties as well as taxed properties. Eischens pointed out that more than half of the market value in Bemidji is exempt from property taxes. Churches, hospitals and nonprofits are among the types of tax-exempt property.
“One of the challenges we have as a city is to figure out ways to provide high levels of service and yet deal with the amount of non-taxable property that we have,” Eischens said.
The general fund, which pays for essential services like police, fire and public works, is budgeted to increase by 3.8 percent or $362,000.
The 2013 budget includes one additional police officer and squad car, a 2 percent operating budget increase, a 3 percent city staff pay increase, and a capital budget increase of $45,000.
Eischens noted that state aid has decreased in recent years. In 2002, the city received about $3.8 million in Local Government Aid, and only $2.9 million in 2012, according to last year’s truth-in-taxation presentation.
In that same timeframe, the property tax levy increased from $1.1 million to $3.8 million. Eischens said Monday that much of the increase had to do with capital projects.
Meanwhile, there will be five fewer full-time city employees in 2013 than in 2003.
The city council is scheduled to adopt the levy and budget at its Dec. 17 meeting.
Hearing on Hotel loan
A public hearing on a loan for the proposed Country Inn and Suites next to the Sanford Center will likely continue at the next council meeting.
The council agreed tentatively during a work session in October to use $400,000 from its revolving loan fund to help build the city-owned connection between the two buildings.
The public hearing was scheduled with a tentative Dec. 15 closing date on the hotel deal in mind, according to a memo prepared by city attorney Al Felix. However, that target date “may not be achievable,” the memo said.
street renewal project
The city council approved the feasibility report on the 2013 street renewal project Monday night.
The project aims to repair 1.2 miles of city streets. It’s projected to cost $1.2 million, with 22 percent of that being covered by assessments from affected property owners.
A neighborhood meeting will be held at 7 p.m. Dec. 13 at City Hall to discuss the project, followed by a formal public hearing Jan. 7.
Construction is scheduled to start in May and finish in September.