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The City of Minot’s proposed budget for 2021 does not include any tax increases, according to finance director and interim city manager David Lakefield, who presented the preliminary budget to the City Council on Aug. 3.
“We face some revenue challenges. Our goal was to present a budget that was balanced and had a zero rate increase on the mill levy, and what we are presenting today has accomplished that,” Lakefield said, adding that the budget includes no increases to fees or utilities.
The preliminary 2021 budget stands at $143.5 million, a 47.48 percent reduction from the record $273.3 million budget for 2020. The 2020 mill levy of 121.29 is expected to remain the same for 2021.
But there are reasons for the dramatic decline in the overall budget, notably a decline in large capital projects and a change in the way expenses are represented in the budget.
Although the City continues to fund the ongoing flood protection project and the Northwest Area Water Supply project, the money for those projects is no longer included in the city budget at the recommendation of auditors, according to Lakefield. Those figures had been included in the 2020 budget. Much of that money goes directly to pay contractors, and the city doesn’t see much of those funds.
Spending on major projects is also anticipated to be down in 2021, with the only large new project expected to be a $2 million water main upsizing on Broadway. The proposed budget does include an increase of approximately $1 million to the street department. The City in 2020 delayed construction of a fifth fire station and a retaining wall project near City Hall; both projects have partial funding in the 2021 budget, but work would not begin until all funds were in place.
The 2020 budget included $6.75 million for a new city hall; much of that funding has not been spent. The city originally allocated $3.75 million from National Disaster Resilience program for a new city hall before deciding to shift another $4 million to the city hall relocation project after the gathering space project was eliminated.
The proposed 2021 budget includes a 1.9% increase in employee pay plan spending, with three new positions:
Lakefield said sales tax collections have been unpredictable. May was the lowest sales tax collection for that month in five years, but June saw the highest collection for that month in five years. The city anticipates that each penny of sales tax will collect $8.5 million in 2021, compared to $10 million in the past.
The Council will hold a question and answer session with department heads on Aug. 17, and has scheduled a public hearing on the 2021 budget on Sept. 8. The final budget must be approved by Oct. 10.