Subcommittee finds tax consensus

The Jamestown City Sales Tax Subcommittee reached a consensus on utilizing a portion of the 1 percent city sales tax for infrastructure.
The compromise was for the city to start receiving 30 percent of the proceeds from the 1 percent sales tax collected in Jamestown while the James-town/Stutsman Development Corp. would continue providing an annual payment for the wastewater treatment plant. The JSDC currently gets all proceeds from the 1 percent sales tax.
The city had originally proposed using 50 percent of the sales tax for infrastructure while taking over the JSDC’s wastewater treatment plant payment of $280,000 per year. That payment expires in 2016 and pays for the construction the treatment facility used to handle waste from the Cavendish Farms potato-processing plant.
The city’s portion of the sales tax would be used pay for more of the costs of infrastructure projects and reduce the amount passed on to property owners as special assessments. Currently, the city pays 10 percent of projects. The use of sales tax funds could increase the city’s share to 25 percent of those costs.
The subcommittee is formed of members of the Jamestown City Council and the JSDC board.
Jim Boyd, president of the JSDC Board of Directors, had proposed 20 percent of the sales tax revenue be used by the city for infrastructure and the JSDC would retain responsibility for the treatment plant payment.
The compromise of 30 percent wasn’t satisfactory to John Grabinger, a spokesperson for the petition drive that requested that up to half of the city’s 1 percent sales tax be used for infrastructure.
“It went from 50 percent in Jeff’s (Fuchs, city manager) first plan to 30 percent,” Grabinger said. “His plan would have been equitable and good for the city. Instead, they wanted 20 percent. Even with the city’s plan, the JSDC will get over $1 million in sales tax each year, plus $250,000 from the county and the city would pick up the wastewater treatment payment. And they have $6 million in reserves to fall back on.”
The JSDC board said the money is needed for future projects.
“The Spiritwood Energy Park is where we have a hole that will be near and dear to our hearts to fill,” Boyd said. “We don’t want to leave ourselves short for the future.”
The next step for the 30 percent compromise is a special meeting of the executive board of the JSDC. The proposal will then be taken to the JSDC Board of Directors. Its recommendation is then acted on by both the Jamestown City Council and the Stutsman County Commission.
Jamestown Mayor Clarice Liechty said negotiation and compromise with the JSDC was not necessary. Liechty attended the meeting as a spectator and was not a member of the subcommittee.
“The City Council needs to go ahead and set aside 50 percent of the sales tax for use for city infrastructure,” she said. “But the one thing missing from this discussion is the County Commission. I don’t anticipate the County Commission will say the city can take half.”
Liechty said any action taken by the JSDC must be ratified by both the City Council and the Stutsman County Commission.
Instead, Liechty proposed a change to the way the sales tax is structured.
“I would like to see this issue on the agenda soon so, if it is defeated, the people who did the earlier petition would have an opportunity to do a formal petition requesting a vote on the measure,” she said.
Liechty suggested a referral measure to repeal the current 1 percent sales tax and an initiated measure to implement a new 1 percent sales tax to be split evenly between jobs development and Jamestown infrastructure. The measures might be worded so the new tax only goes into effect if the old tax is repealed.
“I would like to see the new tax be put in place for 20 years if possible,” she said. “That way both the city and the JSDC know what the revenue will be.”
The current city sales tax expires in 2012 if not renewed. The tax generated nearly $2 million in 2008.
Sun reporter Keith Norman can be reached at
(701) 952-8452 or by e-mail at knorman@jamestownsun.com
a