City hammers out budgetMembers of the Dickinson City Commission met Monday during a special meeting to further discuss the 2010 budget and fee schedule.
By: Beth Wischmeyer, The Dickinson Press
Members of the Dickinson City Commission met Monday during a special meeting to further discuss the 2010 budget and fee schedule.
Members of the commission discussed options in reducing the use of cash from the 2010 fiscal budget, which is currently projected to be $415,546.
City administrator Shawn Kessel said the city has three options to consider: Introducing a street light utility and a 1 percent reduction in the three percent requested city employee pay scale adjustment; a creation of a franchise fee; and introducing a street light utility and eliminating pay scale adjustments for city employees.
“The majority of that ($415,546) is made up of retirement investments,” Kessel said.
Commission members discussed getting a second opinion on how much money to place in pension funding for city employees.
The first scenario Kessel discussed would include moving the general fund expenses of about $310,000 to a newly created street light utility fund, which would have two revenue streams: Property taxes and a new fee charged to current and future utility customers.
“People would be charged a fee on their utility bill that would vary depending on the size of the water meter that enters their domicile or commercial property” Kessel said. “The rate would change depending on the meter size. The larger your meter size the more you would be charged.”
The average single family home would incur an expense of about $2 a month, while the average commercial account would incur a $10 a month charge, Kessel said.
Commission members stressed the utility funds would not be used for the construction or purchase of new light poles, but to be used for operating costs of the poles.
“If you include that with a 1 percent reduction of the three percent requested pay scale adjustment; with every one percent reduced, we save about $31,000,” Kessel said. “Bring those together and you’d have about $218,000 more quote unquote revenue to the general fund.”
With the implementation of scenario one, the use of cash amount would be lowered to about $38,000.
Scenario two, the creation of franchise fees, would result in fees being levied against users of electricity and natural gas. The city may levy a one, two or three percent fee against the gross sales of electricity and natural gas providers, co-op or not, who supply residents within the city’s corporate limits.
Kessel, who recommended a two percent levy, said the use of that scenario would bring about $300,000 in six months of collections, about a $43,000 surplus if implemented.
“Franchise fees are a way to compensate the city for use of right of ways,” Kessel said. “There are three other cities that levy franchise fees in natural gas and electricity: Grand Forks, Fargo and Wahpeton are those three.”
The fee would add two percent to residents’ monthly bill, or two dollars added to a $100 bill, for example.
“It’s called a fee but it’s really a tax,” Kessel said. “We all need to recognize that in terms of transparency it is a tax.”
Dennis Johnson, city commission president, said he has concerns over the larger users of electricity and natural gas, such as the schools and hospital.
“It would hit them much harder than if we had the street light utility,” Johnson said. “For example, the hospital or a nursing home would probably pay more in the franchise fee.”
Johnson said the average operating cost for street lights is about $290,000
The third scenario; which would include a street light utility and eliminating pay scale adjustments, would bring about a $24,000 surplus if implemented.
Commissioner Joe Frenzel said he feels lowering the pay scale percentage to two percent and the street light utility makes sense.
“Two percent and go forward and if at some point we want to go to three, we can always adjust the budget,” Frenzel said. “It’s hard to take money away from people. The street light utility is something we have provided to the public for years and we have never charged for it. That’s the service we’re providing and it only makes sense that we would be paid back.
Following the discussion, the commissioners collaboratively decided to go with the first scenario for their first reading of the budget, which would include the introduction of a street light utility and a two percent increase in pay scale adjustment, eliminating the citizen survey which would cost about $10,000 as well as deciding to get a second opinion on retirement investments.
The commission plans to have a first reading of the 2010 budget during their Sept. 8 city commission meeting at City Hall, held at 5:15 p.m. Public input is welcome.