West Fargo will hold its mill levy even in 2021, meaning no new tax increase for residents, but Administrator Tina Fisk warned city commissioners to consider small increases in the future to avoid a large spike in tax rates down the road.
Fisk said Monday, Aug. 3, that staff initially recommended a 2 percent increase of the budget to keep up with costs and hire additional staff for the city, which has grown exponentially over the past 10 years.
However, when the numbers were presented, city commissioners requested there be no mill levy increase.
"We were encouraged very strongly to have a zero mill increase," Fisk said Monday as she presented the city's preliminary 2021 budget.
Fisk said that just for the general fund to adequately fund recurring expenditures it would need an increase of 5.1 mills.
"We need to have adequate revenues on reserve at all times for emergencies and for the general well-being of West Fargo."
Fisk said she wanted to publicly encourage commissioners to consider raising the city's mill levy in the future to avoid digging further into its reserves and a large increase in the future to cover the costs of a growing city.
"You guys are in charge of this so what you do is fine, but my concern with this is like our sewer rates — if you don't manage it responsibly you would have a hike," Fisk said.
"I agree with our city administrator's comments," Commissioner Brad Olson said. "What we do today will affect what we do tomorrow. We'll have to adopt some policy for incremental increases because we can't keep taking from the general reserves."
Fisk was able to reduce the overall budget by 2.1 percent by cutting things such as 19 staff requests to just nine approved positions, which would cost about $860,000 rather than $1.6 million.
The nine positions in the new budget will include an operations manager in public works, an equipment operator, one more police officer to help cover the additional school resource officer needed at Horace High School, an assistant city administrator, one engineering staff member, another librarian position, two electricians to offset contractor costs and a safety coordinator in human resources.
Commissioner Mark Simmons said he would have suggested the city cut two current staff positions.
Commissioner Mandy George said she appreciated staff for keeping the mills flat. She also suggested that to save time and add transparency that staff present the budget to the commission publicly, as Fargo currently does.
Commissioner Eric Gjerdevig said he would like to see more discussion around funding for the West Fargo Airport.
"To me, using tax dollars to pay for something an extreme minority get use of is not right," he said.
There will be a 1 percent cost-of-living increase for staff salaries. Education and training budgets were cut, taking out travel and hotel rooms.
Finance Director Jim Larson said the general fund was reduced by 1.3 mills. Also, the library and fire departments were asked to cut one mill from each of their budgets.
Larson asked the commission to approve the budget and set a hearing for Tuesday, Sept. 8. Once the city sets its preliminary budget, it can lower any mill levy increases but not increase them.
"If the budget is not approved to move forward, then our mills will be set to what they were last year," Larson said Monday.
Simmons said this year is unusual considering the COVID-19 pandemic.
"Truth be told, we either do raise the mill levy or we freeze some job positions or something," Simmons said. "I understand we need people, but they need to be crucial."
The city must approve its final budget by Oct. 10.