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Erik Burgess, Published November 18 2013

Majority of Moorhead council favors rejecting proposed streetlight fee

MOORHEAD – It appears residents here won’t be charged a monthly streetlight utility fee next year to help fix Moorhead’s budget woes.

Six council members said at the City Council meeting Monday night that they would not approve a monthly streetlight fee and preferred to look at other cost-saving options to fix the roughly $342,000 shortfall in Moorhead’s 2014 operating budget.

Council members Mark Altenburg, Heidi Durand, Nancy Otto, Steve Gehrtz, Brenda Elmer and Mike Hulett all said they had concerns with how the fee might affect residential and large commercial utility customers in Moorhead.

“We probably need to study that (fee) some more, which I look forward to doing in ’14,” Otto said.

Mark Hintermeyer was absent, and Luther Stueland did not openly state a position on the proposed streetlight fee.

In order to cure the budget shortfall, the council will now have to look at combining a number of different cost-savings.

The city could reduce the shortfall by about $61,000 by cutting 5 percent from the roughly $1.24 million discretionary fund, which includes things like office supplies, motor fuels, clothing, postage, travel and training, said Finance Director Wanda Wagner.

Durand asked if that fund could be cut more than 5 percent, but City Manager Michael Redlinger said some of those funds were cut deeply about five years ago and cutting them more would put them “in the red.”

The city also needs to decide how to pay for its recent restructuring of City Hall, which makes parks and recreation and engineering into their own departments and creates a deputy city manager. The cost for reorganization adds to the shortfall.

Director of Human Resources Jill Wenger presented the council with four options for paying for the reorganization. The most expensive option costs about $233,743, but the city could save money by creating fewer new positions and using current staff to fill the new roles.

Altenburg floated increasing revenue by boosting the transfer the city receives from Moorhead Public Service. The city is already asking for $250,000 more from MPS next year, bringing the transfer up to $6.3 million, roughly 17 percent of the utility’s projected $40 million net revenue next year.

Asking for 18 percent would provide the city with an additional $355,430, on top of the $250,000 increase already sought, Wagner said. By law, the city can ask for up to 20 percent of MPS’ net revenue.

Gehrtz said the city could also save $58,000 by increasing city employee’s cost-of-living adjustment by only 1.5 percent next year, not the suggested 2 percent.

Hulett said he wouldn’t be amenable to adding or subtracting “a penny” from either the MPS transfer or the cost-of-living adjustment, saying the city is already behind the curve when it comes to paying its employees.

The council voted Sept. 9 to set next year’s preliminary levy increase at $32 per median-valued home of $139,900. That levy will be spent entirely on the city’s debt, and does not cure the $342,000 shortfall.

About $150,000 in special assessments expected from a new major housing development in the tax-forfeited lots in Stonemill Estates allow the city to lower the levy increase to $24 per median-value home, but it would still have a $342,000 deficit.

The council will conduct a public hearing on the levy and budget at 6 p.m. Dec. 2 in City Hall.

Readers can reach Forum reporter

Erik Burgess at (701) 241-5518