The City of Mandan’s proposed 2017 budget calls for a decrease in the 2016 property tax rate for city services, despite a significant reduction in revenue from other sources. The proposed budget would cut the levy by nearly 7.5 mills, dropping to almost 59 mills compared to 66 last year.

An existing home with a $250,000 value and an average valuation increase of 13 percent would see no increase in city property taxes. This excludes special assessments for approved projects such as street paving and reconstruction.

The 2017 budget reflects a difference of $1.2 million in total revenues from the 2016 budget. Total revenues are expected to be $31 million. Total expenditures are estimated at $30.1 million, a decrease of $928,000 from the 2016 budget.

The City’s general fund is facing a $686,000 reduction in state aid distribution and a $396,000 reduction in highway tax distribution. The City plans to adjust for the budget shortfall by transferring $500,000 in hub city funds to the general fund. An additional $170,000 will come from the 1-percent city sales tax fund, $170,000 from the BNSF settlement fund, and $50,000 from the water and sewer utility fund. The general fund will absorb the difference.

The City is expecting $4.2 million in hub city funding. The funding, which is designated to oil impact cities with a population of 12,500 or more, is determined by the percentage of oil and gas related employment above a base of 1 percent. Mandan has oil and gas employment of 8.02 percent. The latest proposal is to allocate it as follows: $1.3 million will be designated to public works facilities, $500,000 will be transferred to the general fund, $53,000 will be used to purchase a patrol car for the police department, and $10,000 will be used to purchase a mower for the cemetery. Remaining dollars will be set aside for expenditures relating to the oil and gas impact on the city. A north side fire station project has been shelved due to staffing concerns.

The City’s Budget and Finance Committee is recommending a contribution of $4.7 million from property tax revenue toward a total city budget of $30.1 million. Property tax revenue is budgeted $198,000 higher with much of the additional revenue stemming from new construction entering the tax rolls and expired exemptions in 2016.

The first consideration of the budget is scheduled for a Mandan City Commission meeting to be held, Tuesday, Sept.6, beginning at 5 p.m. The second and final consideration is scheduled for an Oct. 4 meeting beginning at 5:30 p.m. and following a public hearing scheduled for 6 p.m. All meetings take place at Mandan City Hall, 205 Second Avenue NW.

Sales tax buy-down
The Mandan City Commission remains focused on lowering property taxes by fostering retail business growth. The budget committee’s recommendation for 2017 is to contribute 57 percent of projected sales tax revenue to property tax buy-down, as compared to the policy of 50 percent adopted in 2013 and contributions of 40 percent in 2012 and years prior. The sales tax contribution to the general fund budget for 2017 is pegged at $1.3 million in total. Without it, the mill levy would need to be about 17 mills higher.

Lowering mills to offset value increases
The taxable valuation of Mandan property is estimated at $80.4 million in 2016, up from $68.4 million in 2015. There was a 13 percent increase in the total value of residential property. The increase to the total value of commercial property was 31 percent.

Personnel impacts
The 2017 budget does not allow for market or performance adjustments except for promotions, due to a reduction in revenues from the state of North Dakota. The hiring of additional employees is not included in the 2017 budget. The City will re-evaluate vacant or unfilled positions based on need, but intends to fully staff its police and fire departments.

Water, sewer and garbage rates pending
Water and sewer utility fund base rates will be considered later in the year once city officials can better determine the level of potential cost share from the N.D. Water Commission for water treatment plant improvement projects and the timing of those projects. The water volume rate will increase by $0.10 per 100 cubic feet, and the waste water volume rate will increase by $0.05 per 100 cubic feet.

The overall impact for an existing residential property using 800 cubic feet or eight units of water per month is a $1.40 increase on the utility bill. The last time the volume rates increased was in 2013.

The solid waste utility fund which covers residential garbage collection and hauling services will see a base rate increase of $0.05 per month per living unit. The residential single-sort recycling service will see a base rate increase of $0.15 per month.

City services only a portion of local property tax bill
City services account for about 24 percent of the total mill levy for Mandan property owners. School District, Morton County and Park District services account for the remainder.

For more information about the 2017 city budget, contact the Finance Department, phone 667-3213. The full budget document will be posted at www.cityofmandan.com.