Moorhead City Council Passes New Levy - Valley News Live - KVLY/KXJB - Fargo/Grand Forks

Moorhead City Council Passes New Levy

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Updated 12/10 6:05pm:

Moorhead City Council approved its 2014 financial plan Monday evening.

The city's budget in 2014 will be nearly $68 million, a $2.5 million dollar increase over last year.

Two of the factors for the higher bottom line were wages and benefits, and paying back city debt.

For the owner of a $150,000 home, that should translate to an annual increase of roughly $28, but city manager Mike Redinger says Moorhead residents should see a property tax reduction overall.

Valley News Teams Kristi Larson sat down with the city finance director and asked why tax increases were approved instead of cuts in city expenses.

"We were not proposing a tax levy at all to cover the operations, that's what created kind of the short fall." Wanda Wagner the city finance director says.

Tuesday we asked Wagner to justify how the new budget for 2014 came with a tax levy increase of 8%.

Wagner says the city council didn't want to cut or reduce city staff, increases for city staffers or city services instead opting to raise taxes on individuals who own homes in the city. She justified not cutting staff because she claims the city needs people to help the city grow.

"A significant portion of the city's budget is staff, so that was without increasing taxes to cover that there needs to be revenue from some place." Wagner says.

So what did the city really do this year to avoid a shortfall? Wagner says they are using a reduction in health insurance and the city's sales tax exemption to help cover the costs. They are also using flood mitigation funds to keep from raising electric rates.

Despite this, some have raised questions as to whether or not the city simply kicked the can down the road to next year. Wagner admitted to me that there are going to be problems again during the next budget cycle.

"We are going to have issues in budgeting next year, I will admit that, it's going to be a challenge." Wagner says.

The council did take some pro-active steps by cutting down the operating budget and the council travel budget. 

Wagner says one more problem the city will be challenged with is taking over the Oakport service area in 2015.

Original Story:

The City of Moorhead is on pace to set its 2014 budget Monday night.

Moorhead is facing a $342,000 gap in its operating budget, and is considering five percent reductions to fill the gap.

Tonight's Moorhead City Council meeting starts at 5:30 p.m. in city hall council chambers.

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