August 19, 2024
P.O. Box 5006, Minot ND, 58702
minotnd.gov
701.857.4750
10 3rd Ave Southwest, Minot ND, 58701
2025 Budget President’s letter
Citizens of Minot, Mayor Ross, fellow Council members and city employees,
In announcing at the State of the City event back in February that his Fiscal Year 2025 City Manager Recommended Budget property tax levy would be less than or equal to the FY2024 budget in dollars, Mr. Stewart took on a significant challenge for himself and his management team. Using a zero-based approach, and as good as his word, Stewart and his staff presented a recommendation that keeps property tax dollars flat and due to increased property values, decreases by $21.87 per year the tax on each $100,000.00 of property value and decreases the mill rate. This is a perfect place to start as the City Council works to finalize the FY2025 City Budget. The overall recommended FY2025 Budget does show an increase however, due to the timing of projects such as flood protection, where funds are collected in advance or received from other sources and held until the specific use project is executed.
We now know that the elimination of all property taxes will be on the November ballot. Some would argue that his is not the year to be shrinking our budget, because if the measure passes, we will be frozen at the FY2025 level and dependent on the ND Legislature to figure out how to fund that portion of local government. I believe it is better to do the right thing and we able to point to those actions than to try to game the system by betting on how the election will turn out. In 2013, a similar measure failed by a wide margin. We must all get informed and wait for what the voters decide in November.
The largest budget category repeating every fiscal year is employee salaries and benefits, which is not surprising, since our 442 fulltime, 26 parttime, and 11 seasonal employees today provide all the essential city services our citizens depend on. In the past three years, the salary costs for existing employees have increased about 21%. The FY2025 City Manager Budget includes $2.3 million additional dollars based on a combination of market rate increases and 2.5% step increases. Continuing to sustain these current trends appears impossible. Thus, the recommended budget includes an alternative for FY2025, The Hybrid Plan, pending an extensive wages study in FY2025 to develop additional solutions. The Hybrid Plan would provide that employees receive the higher raise between either a step increase or the market increase but not both, and that Department Heads’ raises would be limited to a maximum equivalent to two step increases. I recommend that the Council adopt The Hybrid Pay Plan for 2025.
Using The Hybrid Plan will result in approximately $700,000.00 in savings. Those savings are estimated to be composed of 60% General Fund and 40% Enterprise Fund dollars, or $420,000.000 and $280,000.00, respectively. It is my intent that the Enterprise budgets be reduced by the savings amount in that category. In the General Fund savings, i.e., the property tax funded portion, I recommend that the Council dedicate $250,000.00 of
the General Fund savings to move eligible city employees in FY2025 to the NDPERS Police/Firefighter Pension Plan. This action was contemplated for the 2026 budget, but in the current recruiting environment and with uncertainty about future NDPERS changes, it needs to be done now.
Staffing shortage in the Police Department has been a chronic issue for years and is part of a national challenge in the US. Money does not solve every problem, but we need to do more to keep the officers we have and strengthen recruiting to fill as many of our vacant slots as possible. I recommend that $100,000.00 of General Fund Savings be allocated to the Police Department budget for an urgent recruitment plan to be developed by Chief Klug and his leadership team for approval by the City Council.
I recommend that the overall budget be reduced by the remainder ($420k-$250k$100K = $70k) $70,000.00, equivalent to 0.2723 mills.
New employees in the recommended budget are paid for by Enterprise Funds, services fees, or federal/state reimbursement *in the case of the biota water plant), except for an additional positing in Human Resources, which is entirely property tax funded. Although the position is desirable, the $85,000 cost is hard to accept. I recommend that we do not add the $85,000.00 HR position at this time due to focus on limiting General Fund expenditures.
Additional variables may have to be accounted for going forward such as health insurance rates and the effect of implementation of the Hybrid Pay Plan on current benefit estimates for example.
Thank you to City Manager Stewart, Finance Director Lakefield and his staff and the Departments Heads for all the information and answers we have received. Also, thank you to the citizens who have been engaged and in contact during the process so far. I respectfully ask that my fellow Council Members consider these recommendations.
Summary
1. I recommend that the Council adopt The Hybrid Plan for 2025.
2. I recommend that the Council dedicate $250,000.00 of the saving to move in 2025 to the NDPERS Police/Firefighter Pension Plan for our sworn officer employees.
3. I recommend that $100,000.00 be allocated to the Police Department Budget, toward recruitment plan funding.
4. I recommend that the General Fund buget be reduced by the remaining savings of $70,000.00, equivalent to 0.2723 mills.
5. I recommend that we not add the HR position currently due to the funding source and reduce the FY2025 budget by $85,000.00, resulting in a 0.3307 reduction in the mill levy.
Mark J. Jantzer