Moorhead looks at record budget

Taking its first look at the city's 2006 budget Tuesday raised some questions for Moorhead City Council members.

The $51.6 million budget, the largest in the city's history, is an increase of $7.5 million from 2005 - a 17 percent hike.

The growth in the budget is driven by the growth in the city, City Manager Bruce Messelt said.

It calls for 11 new city workers: three firefighters, three in engineering, three in parks and forestry, one for street and park maintenance, and one in neighborhood services.

The rental registration fee is being raised to $350 per building and $5 per unit from $25 per unit to pay for the neighborhood services post.

While the city hopes to hire the extra firefighters with a federal grant, it should hire one even if Moorhead does not get the grant, Messelt said.

Mass transit is slated for the biggest overall increase, rising from $1.3 million to $3.7 million as a result of construction starting on a joint transit facility with Fargo. Federal money will cover 80 percent of Moorhead's $2.3 million share.

Expected service fees of $15 million - the city's largest source of revenue - will cover more than one-fourth of the budget. Property taxes, which will rise 5 percent from this year to just over $5 million, will account for 10 percent of the budget.

The tax rate is estimated to rise just over 1 percent, raising taxes on a $100,000 home from $205 to $213.

Councilman John Rowell said he wants to see taxes raised to generate another $100,000 to add to the council's discretionary account.

He said the city may need that money to cover the rising price of fuel. Finance Director Harlyn Ault said the city has already budgeted a 40 percent increase in fuel costs, $136,000 more than this year.

That may not be enough, Rowell said. He estimated that the city tax bill on a $100,000 home could rise $15 instead of $8 to put away $100,000 for higher-priced fuel.

"That's not going to break anybody," Rowell said of a $15 tax increase.

Councilman Jim Danielson agreed, saying he preferred to err on the side of caution.

"I basically think we're an undertaxed society," he said. "There is no free lunch."

Councilwomen Lauri Winterfeldt-Shanks and Nancy Otto opposed further tax increases, saying it could discourage growth and be tough on those with fixed incomes.

"We have to be cognizant of the bottom line," Otto said.

Otto also raised questions about city funding of arts and social service agencies. Fargo Mayor Bruce Furness suggested last month that Fargo should limit how much the city gives to such groups.

She said Moorhead spends 44 percent more per capita on those agencies than Fargo. Moorhead's budget calls for spending about $124,000 on arts and service agencies next year.

There seemed to be little support on the council for dropping that support, because several members backed the spending.

Councilwoman Diane Wray Williams said she considered giving money to arts and social services agencies as economic development.

Councilman Greg Lemke said Moorhead's focus on arts and social services makes it better than Fargo in some instances.

At its next meeting Monday, council will need to approve an initial levy for 2006 to meet the state-set Sept. 15 deadline.

Readers can reach Forum reporter Dave Roepke at (701) 241-5535