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Bismarck residents to see property tax increase in 2021

Bismarck residents to see property tax increase in 2021

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Bismarck Mayor Steve Bakken listens during discussion at Tuesday's City Commission meeting.

Bismarck residents will experience a property tax hike after the Bismarck City Commission approved a 2021 budget with a property tax increase of over $4 million.

That tax increase helps fund a 3% staff raise, capital improvements to the Bismarck Veterans Memorial Library and the roads and streets fund, which is projected to experience a decrease in outside funding due to the COVID-19 pandemic. Elected officials, which includes the mayor, the municipal judge, city commissioners, the city attorney, city administrator and assistant city administrator will not receive raises in 2021.

The additional taxes will also fund a critical needs fleet replacement plan that puts city vehicles and equipment on a set schedule for replacement rather than waiting until vehicles are no longer operational. The vehicles on the plan were the ones determined to be critical needs.

Residents with a property that has a median value of $274,000 will pay an extra $124 next year.

The total 2021 budget comes to $238.6 million. The general fund budget is about $58 million. In 2020, the total budget was $233 million, and the general fund budget was $54 million.

The first two votes on the budget failed 3-2, with Mayor Steve Bakken, who had voted yes on the preliminary budget, switching his vote to no. He said the COVID-19 pandemic made him want to tweak the budget. The discussion hinged on staff raises and the inclusion of the fleet replacement plan. The budget passed 3-2 on the third vote, with Bakken and Commissioners Nancy Guy and Steve Marquardt voting to approve, and Commissioners Greg Zenker and Mark Splonskowski voting against.

Bakken suggested the commissioners not receive raises in 2021 and questioned the inclusion of the fleet replacement, although both were included in the final budget.

Zenker was hesitant on approving the raise for staff considering the economic difficulties Bismarck residents have been facing during the pandemic.

"There are a lot of businesses in the city not getting raises," Zenker said. "I have a hard time giving a raise just because. We've got to go a little deeper."

Guy lamented the fact that raises recommended in 2015 have not been followed in the past few years.

"These employees have not gotten the raises they were supposed to be getting," Guy said. "This is embarrassing."

Marquardt, who was a member of the budget committee that presented the preliminary budget in July, said the goal of the 2021 budget is to ensure the city sustains services.

"We're looking at a policy to be sustainable," Marquardt said. "When is there a good time to raise taxes? There isn't one. Unfortunately, we as a city do not shut down. We keep operating. We need to take a look at what's happening now -- and now sucks -- but we need to make sure that our city is sustainable, not just today, but in the future."

The city will have to spend $4.3 million in general fund reserves with the 2021 budget, which will put the reserves below a 60% threshold. City policy states that if the general fund reserves drop below 60%, the city must repay the money within five years.

The preliminary budget first proposed in July included an $8 million property tax increase to prevent a budget shortfall without dipping into reserves, but several commissioners asked to see alternatives to such a large rise in taxes. That increase is planned to be split over the 2021 and 2022 budgets.

Finance Director Dmitriy Chernyak said in July that the shortfall is due to a decrease in funding because of the COVID-19 pandemic and an increase in one-time expenses for the city.

Residents wishing to comment on the budget and other items on the agenda were directed to overflow rooms because the Tom Baker Meeting Room reached full capacity.

Several residents who opposed the property tax increase spoke at the meeting and told the commission of the economic hardships they have been facing due to the pandemic.

Reach Sam Nelson at 701-250-8264 or sam.nelson@bismarcktribune.com.

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