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Published November 28 2013

Forum editorial: Moorhead has no easy fixes

Pay close attention, Moorhead taxpayers and municipal utility ratepayers: The city finds itself between a boulder and a hard place – squeezed by a deficit of $199,000 – as leaders grapple to put together next year’s budget. The City Council faces a sobering range of choices as members try to maintain services while working to restrain taxes and fees. The problem is compounded by years of getting by with short-sighted fixes, and the easy outs have been exhausted. City leaders have gotten into a bad habit in recent years of treating surpluses at Moorhead Public Service as a bottomless piggy bank.

To help balance the city budget, the city has a long history of tapping municipal utilities in the form of a transfer of funds – that’s a polite way of saying Moorhead habitually robs Peter to pay Paul. The practice started benignly decades ago but has mushroomed in recent years to an unsustainable level. As recently as the 1990s, the transfer from Moorhead Public Service was $76,000 a year. But the amount has more than quadrupled since then, averaging $342,000 annually over the past five years.

Municipal utility rates for water and electricity have climbed sharply in recent years. Two years ago, a rate hike was needed solely to pay for a $662,000 increase in the revenue transfer. The series of rate increases threatens the city’s business climate. Anheuser-Busch, one of Moorhead’s largest utility customers, bluntly warned earlier this month that it will consider closing its malt plant if rates keep going up. Moorhead must be careful not to allow its business competitiveness to deteriorate.

To further compound the problem, the city has miles of crumbling water mains that must be replaced. Moorhead Public Service has proposed a 3 percent boost in water rates, for instance, to help pay for $7.3 million in water main replacements and $6.9 million for a pumping station.

The city has a number of options. It rejected a streetlight fee to plug the budget hole, with some calling for further study. It can trim hiring for its restructuring plan of City Hall. It can cut 5 percent from its discretionary fund, which includes office supplies, motor fuels, clothing, postage, travel and training. It could alter transfers from municipal utilities in a way that does not increase the amount diverted.

So far, pending final budget approval slated for Dec. 9, the council contemplates a property tax increase of $32 on a median-home value of $139,000, all of which would go toward paying off debt, none for operations. One way or another, as municipal ratepayers or taxpayers or residents whose services are diminished, people residing in Moorhead will pay the price. So pay close attention, Moorhead taxpayers, and if you want to know more or want to speak your mind, attend the budget hearing scheduled for 6 p.m. Monday at City Hall. Moorhead has no easy options, but public input will help guide leaders.

Forum editorials represent the opinion of Forum management and the newspaper’s Editorial Board