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Taxes are more than last year, about the same as 2010 and 2011
By Caroline Downs
“We’re like any other small business,” city accountant Jan Kostad told members of the Kenmare city council and citizens who attended a public hearing held September 26th. “There are costs we have to keep pace with.”
The meeting was announced to discuss the proposed increase in property taxes. Taxable valuation of property in the city rose across the board from $1,945,947 in 2012 to $2,285,420 for 2013, or 15 percent. A zero increase number of mills would have dropped the mills levied from 77.23 last year to 67.52 this year.
However, Kostad pointed out several items in the proposed city budget have increased, including expenses to hire a part-time building inspector and to pay a portion of the salary for the jobs development position (in conjunction with the Kenmare Community Development Corporation).
At the same time, some revenue was expected to fall, especially income from the city’s campground, which has brought in over $100,000 this year because of the high demand for temporary seasonal housing.
Council president Chuck Leet supported the city’s decision to increase some of the line items. “I think we need to keep wages where they should be to keep quality people working for us,” he said. “That keeps our buildings maintained, keeps our streets in good shape, and keeps our tax base moving forward.”
Kostad explained the mill levy proposed for 2013, at 86.20, would generate $197,003.20 in property taxes, which amount to between 12 and 13 percent of the city’s total budget of $1,688,618.21.
One mill generates $2,285.42 for the city.
He listed other sources of revenue for the city of Kenmare, including an estimated $263,000 in state funds, $700,000 collected in water, sewer and garbage fees, and $100,000 in miscellaneous fees for things like Memorial Hall rental, fines, liquor licenses, etc, along with income from the campground.
The city also takes in approximately $245,000 in special assessments each year, with that money earmarked to pay the balance remaining on the road surface sealing project and the expanded sewer and water services on the eastern side of Kenmare.
Actually, the city’s proposed levy of 86.20 mills is similar to the number of mills levied in 2010 at 85.58 and 2011 at 85.48.
For residential property owners in town, that means the city taxes on a $100,000 home would amount to $387.90, compared to $385.11 collected for 2011 and $384.66 collected for 2012.
“Keep in mind, the numbers haven’t changed a whole lot,” Kostad said.
“Basically, we’re going back to the same level as 2011 or 2012,” Leet added.
However, the amount collected last year would have been $347.54 on that $100,000 property, and citizens attending the meeting noticed the difference.
“If our property values have increased 15 percent, why are the taxes higher?” asked Jeff Whillock. “There’s additional sales tax and new construction in Kenmare.”
Kostad explained the 2014 budget was an estimate of the city’s expenses and revenues. “We will see a decrease in the campground fees,” he said, “and the city has a $300,000 payroll, which reflects a three percent pay increase.”
“Our costs to operate have gone up significantly,” said Leet.
No one attending the meeting protested the property tax levy directly, but individuals did raise concerns and questions regarding the use of the taxpayers’ money.
“I never have been against an increase, but I don’t think we’re getting our bang for the buck,” said Jim Geiger. “There are things that aren’t getting done that should be getting done.”
Tami Ware asked about the income the city received from bulk water sales, with Kostad reporting about $40,000 collected. “I have a concern about some of that money going back to pay for damage to the roads the trucks use,” said Ware.
Dwight Flygare asked about the development started immediately south and west of the new Honkerville Apartments, where sewer and dirt work was done last fall.
Council member Troy Hedberg said KDAK Development had spent about $1 million to install sewer lines and level the lots last year, but the company did not yet have a signed agreement for the purchase of the property, which is still owned by the city.
“They’ve decided to focus on developments in Minot, Tioga and elsewhere for now,” said Hedberg.
He added that no payment or portion of payment had been received yet for the property.
“Is the development of Kenmare stagnant?” Flygare asked.
Leet said the city council had to choose the best course of action for the city, which so far has been to grant the extensions requested by KDAK to make payments on the development.
“So many people walk in the door with their hand out,” he said. “Kenmare has been very, very watchful on these things.”
Tim Harris asked if the city had received any energy impact money from the state. Hedberg noted Ward County is not considered an oil-producing county, but Kenmare had received money from one of the state grants to cover most of the costs associated with the proposed sewer lagoon expansion.
“And for the airport, we’re getting about $2 million in state and federal money for the runway project out there,” he said. “We’ve got some of this money through the special grants, but we don’t get regular oil-impact payments like some cities do.”
Responsibility for the new sewer and water lines installed south and east of town were another topic during the meeting. Kostad explained a special district was created for the property owners in that area to pay for that improvement.
Several citizens still had concerns. “Does Gooseneck get a break on their taxes because of the development out there?” Ware asked.
“They’re paying about $35,000 a year toward the retirement of that sewer and water debt,” Kostad said.
Hedberg said the business was being taxed the same amount, but the payment was going into the special assessment district fund established for the project. “The infrastructure created from that project runs from below the old landfill up to City Limits and the old Gooseneck building,” he said. “That really benefits a large area.”
“The city felt it was better to be opening property up to further development,” Kostad added.
New budget approved
Leet thanked the audience for their input and asked for further comments before the council took action to approve the 2014 budget for the city on second reading.
The budget passed unanimously on a roll call vote.
The next meeting of the Kenmare city council is scheduled for Monday, October 14th, at 8 pm.