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JDA approves preliminary budget
July 19, 2019

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The Rugby Job Development Authority approved a preliminary budget Monday that would supplement dwindling end-year balances and low estimated sales tax revenues with a four-mill levy on properties in the city limits.

In the special meeting, board members examined financial statements comparing budgets with actual revenues and expenditures since 2016.

The 2020 preliminary budget showed anticipated sales tax revenues reflecting what Rugby Mayor Sue Steinke called "a conservative estimate."

"Very conservative," Steinke said. "I'm optimistic it'll be much better than that. In fact, I'm going to recommend at our next finance meeting that we adjust that upwards."

The board also discussed expenses for maintaining properties and special property tax agreements on JDA land.

Board member Terry Hoffert asked Executive Director Liz Heisey if mill levies had been used in past budgets.

Heisey said, "They stopped in '92 or '93 when they had the sales tax, and then (Former JDA Director) J.T. (Pelt) when he was director, they requested 2 mills to cover the student loan payments, but then they had lots of negative feedback and didn't ask again."

"There were a few people who thought it was going for the Chalmers Addition, and they were louder than (the rest)," Heisey added.

Board members acknowledged that a 2013 decision to purchase the Chalmers Addition created some challenges for funding JDA services such as student loan assistance, recruitment assistance for Heart of America Medical Center and participation with the Small Business Development Center.

"And back in '13," Steinke noted "They (the 2013 JDA Board and Rugby City Council) did bite off more than they could chew. It's almost a four million dollar deal. They bit off the whole bite of the apple. But we are here today, and the only way out of Chalmers is through. And Chalmers is a project that is showing some good turnaround now, and we'll also have some very good things happening within the city of Rugby. We're going to keep growing."

Board members also discussed a loan payoff last year on the Heart of America Johnson Clinic building, which put a dent in 2019's ending balance, but would "actually save the JDA over time $26,400," according to Steinke.

The board suggested designating some of the funds collected through a possible mill levy for hiring an office assistant, possibly coordinating with student engagement programs at Rugby High or other hiring programs. The budget allotted $5,000 for the position.

Board member Jodi Schaan pointed out current balance trends wouldn't support new office hires or JDA services without a levy.

"Now we've dropped almost $100,000 from '19 to '20, and those four mills would help make up the difference," Schaan said. "What are we going to do next year zero for an ending fund balance? It's dropping very rapidly."

Heisey emphasized the funds collected through mill levies will be used in accordance with the North Dakota Century Code, which restricts the levies to job development purposes.

Each mill levied would represent $4.50 on a property worth $100,000, according to calculations by the City of Rugby Auditor's office. A four-mill levy would equal $18.00 on such a property's annual tax bill.

JDA President Blair Brattvet summed up the board's decision: "Based on our sales tax we're requesting a mill levy to maintain our current programs and provide an assistant for our director."

"I'll make a motion to increase the youth engagement/office assistant to $12,000, and have a four mill levy put on the budget," Schaan said.

Board member Susan Selensky seconded the motion.

"My first instinct is not to ruffle any feathers but if we have good things coming up, and we can justify it and people can see the good of what's going on, we might as well," Selensky said, explaining her decision.

The board passed the 2020 preliminary budget with the four-mill levy with a 4 to 1 margin, Hoffert casting the "no" vote.

"I'm not against an assistant," Hoffert said, "but my thinking putting (the mill levy and the assistant position) together, if we get more sales tax dollars than we did hopefully that would cover (the assistant). And if things are going as good as they're projected to be, we should get more sales tax dollars anyway."

The 2020 preliminary budget will be sent to the Rugby City Council for a hearing, which according to City Auditor Jennifer Stewart will take place in September.

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