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Erik Burgess, Published September 10 2012

Moorhead City Council promises ‘zero impact’ budget

MOORHEAD – Council members made a promise Monday night to pass a “zero impact” budget for next year, in which residents might see a property tax increase but the money would be balanced out by a reduction in city fees.

“We are making a promise to the people of Moorhead of a zero percent dollar increase,” Councilman Mark Altenburg said of the overall impact to taxpayers.

Council members debated for more than an hour before setting the maximum levy increase at 5 percent, or a $12 per year increase for the median-valued home in Moorhead. Council members then made what the mayor called a “very difficult” promise by pledging to reduce fees in other places in an attempt to effectively cancel out the tax hike.

The proposal passed 6-1, with Councilwoman Brenda Elmer voting against and Councilman Luther Stueland absent.

Residents would essentially pay less in city fees, such as mosquito and pest control and forestry fees, which would balance out the $1 a month property tax increase. The city can afford to make monthly nickel-and-dime cuts on some of these fees, council members agreed.

Mayor Mark Voxland clarified that the passed $12 a year per household increase in the levy only applies to the median home in Moorhead, at a property value of $140,000. Those who own cheaper homes would not see their levy rise as greatly as $12 a year, and those with homes more expensive would see a higher raise. This makes it difficult to promise fee cuts that would affect all homeowners equally, Voxland said.

“An average homeowner is the only thing we can deal with,” Councilwoman Nancy Otto said.

The council briefly discussed not raising taxes at all, but decided a tax hike was needed to continue to provide the services they promised their citizens, such as flood protection.

“We have to fund these things that we agreed to fund,” Altenburg said.

The council set next year’s budget cap at $64,838,500 on Monday night as well. That vote passed 6-1, with Elmer voting against and Stueland absent.

Following state law, the City Council had to pass a preliminary budget and general levy amount by Sept. 15. The council must now use these numbers as ceilings but can lower them before the final budget is passed Dec. 10.

“We’re just setting the maximum tonight,” Councilwoman Heidi Durand said Monday. “In future meetings, we can go line through line and say, ‘No, we don’t agree with that amount here, or this amount here.’ ”

The preliminary budget discussed by the council in August originally set the levy increase at 9.6 percent, or a $31-per-year increase to a median homeowner. That proposal was shot down by the council 7-0 on Monday night before the new 5 percent increase was proposed and passed.

Because the council decided to lower the tax increase from 9.6 percent to 5 percent, there is now a $345,000 gap in the city’s preliminary 2013 budget that the council will need to work through in the next months before setting a final budget, something Altenburg said they will be able to accomplish.

“I think there is room within our budget to make significant reductions,” he said.

A public hearing has been set for the levy and budget to be held on Dec. 3.

Readers can reach Forum reporter Erik Burgess at (701) 241-5518

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