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Bemidji City Council OKs preliminary levy increase of 2%

Bemidji City Councilors want a full police staff, city employees to receive a cost-of-living increase reflected in their salaries, and to put money toward job growth in Bemidji.

Bemidji City Councilors want a full police staff, city employees to receive a cost-of-living increase reflected in their salaries, and to put money toward job growth in Bemidji.

In a work session Monday evening, the council approved adopting a preliminary levy increase of 2 percent and a gas/electric franchise fee of 3.5 percent.

The levy increase was proposed in order to pay for two additional police officer positions, a 1 percent raise in city employees' salaries (to accommodate a cost of living increase), and the funding of $10,000 per year to the Joint Economic Development Commission.

Discussions between city staff and councilors touched on a variety of issues, but much of the discussion focused on the funding cycle of city streets, future annexation of Northern Township, gas/electric franchise fees and future funding for the Sanford Center.

The city currently has a contract with utility companies and cable providers that require the companies to pay a "rental" fee, or franchise fee, for using the city's right-of-way land, or public property, to access their facilities.

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According to Ron Eischens, the city's finance director, the city makes approximately $280,000 annually using a fixed franchise fee that is not based on the number of times a right-of-way is being used.

One advantage for Bemidji to collect money from gas/electric franchise fees is that franchise fees apply to non-taxable property, such as government buildings located in downtown Bemidji. City officials have stated 53 percent of Bemidji is exempt of property taxes.

Included in the approved 2012 preliminary budget is a stipulation that gas/electric franchise fees would switch to become usage-based and at a fee rate of 3.5 percent. Eischens estimates this would generate at least $380,000 of revenue.

Several councilors brought to light the city's plans to annex the first round of properties in Northern Township in 2012. The preliminary budget for 2012 includes funding for expenses related to the annexation, such as street plowing and maintenance of Algoma Park.

Craig Gray, the city's engineer/director of public works, said the budget does not include the funding of suggested projects in the Bemidji in Bloom report, the wage for a downtown summertime maintenance person, the replacement of downtown benches, or funding for recommended projects suggested in the Quality Neighborhood Initiative study.

Gray added that the city has 80 miles of roads to maintain and is currently fixing them at a rate of 1 mile per year. He said he would prefer to see streets repaired every 50 or 60 years.

The preliminary budget also allocates $350,000 for operations at the Sanford Center, the same amount that was set in 2011.

The council will need to make its final approval of the budget at its next budget meeting on Sept. 12, when Eischens will present the council with the updated budget proposal.

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"Regardless of what (the council) did tonight, things could change," Eischens said. "But we're moving forward with the motion they made tonight."

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