Joint committee discusses division of sales tax funds

A joint committee of the Jamestown City Council and the Jamestown/Stutsman Development Corp. Monday discussed methods of distributing a portion of the current 1 percent Jamestown city sales tax if it is repurposed from jobs development.

The idea of using part of the 1 percent city sales tax for infrastructure repairs was first floated during the flooding this spring. It gained momentum when a petition requesting the repurposing of part of the sales tax was presented to the city council this summer.

Jeff Fuchs, Jamestown city administrator, suggested half the city sales tax be used to fund paying the city share of special assessments for infrastructure at 25 percent rather than the current 10 percent.

In 2008 sales tax collections in Jamestown exceeded $1.9 million.

“I questioned what type of plan could be formulated to be fair to everybody,” Fuchs said. “Not just the part of town needing sewer repairs. One of the thoughts is to expand the 10 percent share the city normally pays of special assessments.”

Currently a citywide property tax of approximately 11 mills is used to pay 10 percent of all infrastructure projects in Jamestown. The remaining 90 percent is paid by the property owners as special assessments over the course of seven to 15 years.

Fuchs said by using half the sales tax money to pay a 25 percent city share of special assessments, taxes and costs can be lowered. His estimates were based on the city doing an average of $2.5 million each year in sewer projects and $1.5 million in street projects through at least the year 2022.

Based on his figures the property tax savings could amount to $194 per year on a $100,000 home by 2020.

“Everybody in the community sees some relief,” he said. “It reduces the city share mill levy and that reduces taxes, and it reduces the special assessment payments for all infrastructure projects.”

Members of the City Council attending the committee meeting agreed.

“It addresses issues of fairness and equity in distributing the funds,” said Pat Nygaard, City Council member. “It provides property tax and special assessment relief.”

Members of the executive board of the JSDC wanted to see different percentage rates applied to the same concept.

“I’d look for discussion on different percentage rates,” said Jim Boyd, JSDC Board president. “Is there some way we can not give up the total half percent of the sales tax?”

Alex Schweitzer, a JSDC Board member, suggested possibly 40 or 45 percent of the 1 percent sales tax be used for infrastructure.

“I don’t want to deplete the JSDC funds so that if a player comes we can’t play,” Schweitzer said. “But we want to make it clear we are in favor of infrastructure.”

Members of the committee agreed to try to reach a decision on the proposal in the next 60 days. This would allow the issue to be placed on the June primary election ballot.

The committee will meet at 9 a.m. on Jan. 8 at City Hall.

Sun reporter Keith Norman can be reached at (701) 952-8452 or by e-mail at knorman@jamestownsun.com