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101 1st St NE
Box 12
Bowman, ND 58623-0012

City proposes tax levy increase

September 04, 2015



Pioneer Editor |

A public input meeting will be held by the City Board of Commissioners on Sept. 15 to hear comments on the city’s proposed 2016 and a 1.22 percent increase in its property tax .

The proposed tax increase only pertains to the city’s portion of the overall tax levy. Property owners within city limits also pay taxes levied by Bowman County Public Schools, the county and the Bowman Parks and Recreation Department.

The 1.22 percent increase in the city’s levy, which translates to roughly $4,300, is the result of ebbs and flows in the city’s budget from the previous year.

The increase is mainly caused by the increase in valuation for 2015. That’s something the city does not control; rather, it’s a result of how prices fare within local property sales.

A simplified breakdown of the 2015 and 2016 general fund revenues and expenses for the city of Bowman. (Graphic by Nate Lee/Pioneer)
A simplified breakdown of the 2015 and 2016 general fund revenues and expenses for the city of Bowman. (Graphic by Nate Lee/Pioneer)

City revenue from property taxes is set to increase by about $11,000 if the proposed preliminary budget is adopted. The city budgeted for about $200,000 in property tax revenue for 2015, having received about $186,000 of that as of June 30.

“We are asking for a little bit more than last year, basically because of valuation,” explained Lyn James, president of the city commission.

In the city’s 2016 preliminary budget, which is slated to be adopted at the Sept. 15 meeting, it was proposed that the 2016 general fund’s revenue would total about $1.6 million. That’s a decrease of about $228,000 from the 2015 budget.

The major reason for the decrease is due to the ever-changing, unpredictable oil and gas production tax revenues received by the city. That amount fluctuates with the market price of oil and amount of production completed within Bowman County.

More than $1.45 million from production taxes was budgeted for 2015. That number, however, falls to just over $1.1 million for the next year’s budget. Though the figures are merely estimates.

While it’s not necessarily a drastic decrease, it could signal future trouble for the city as oil production revenues continue to drop and have done so since at least 2014.

“The field is old so the production is slowly declining,” said James. She pointed to potential future upswings in that revenue when tentative plans for carbon dioxide flooding through the county’s oil fields would ramp up production.

But as oil continues to decline, so does the city’s revenue share.

“We’ll pull our belts,” James suggested. “We just find areas to cut and go from there.”

But revenue isn’t the only thing that’s down; it’s also expenditures.

“We (budget) revenues conservatively and expenses for worst-case scenario,” James said. “You don’t want to overestimate your revenues and not have enough money to pay for your expenses.”

The city’s spending is somewhat complex as many different transfers are made from the general fund into special funds held by the city, such as for water, garbage, sewer and more. Most of the special funds receive revenue aside from the city’s transfers and then have their own expenditures.

James explained those funds are like little savings accounts so that the city ensures it puts some money away each year.

Next year’s proposed total of about $1.34 million in expenditures from the general fund was relatively close to the 2015 budgeted total, which was set at about $1.375 million. But when factoring in the total monies set aside for special funds, the gap becomes larger—for 2015 the city budgeted an overall total general fund expenditure of about $1.9 million, which dropped to $1.6 million for next year.

The reason is less money being set aside from the general fund for the water, sewer and street infrastructure special funds.

James noted that the large projects ongoing and planned for the city are made possible by the state-allocated surge funding—a one-time payout totaling over $6.7 million for Bowman this year—instead of from the city’s general fund.

Of the city’s general fund expenditures, a category that saw one of the largest increases from 2015 to 2016 was the pay and benefits for the city commission.

Commission expenses increased by about $19,000, namely due to an adjustment in health insurance costs for three city commissioners, Darrell West, Chuck Whitney and James. Only two commissioners received health insurance benefits in 2015, with an additional commissioner being added mid-year and that was not factored into the 2015 budgeted total of $31,000 for health benefits. Health insurance for the three will be billed for a full year in 2016, a total of $50,245.

The remaining two commissioners, Darren Limesand and Mike Sondeland, opted not to receive health insurance benefits through the city, which cover the official, their spouse and children.

“The day I don’t think I’m earning it, I won’t take it,” James said. And she said it is their right to take the health insurance, as it is for many other government jobs in the city and county.

“We get paid very minimally,” she added.

City commissioners make about $96 per city meeting, with James as president making $144, which totals to $19,000 in annual salary for the six-person board. That figure has stayed relatively the same over the last few years.

The salary of the Bowman Police Department also saw a hefty increase, mainly because of a large payout in overtime. Police salary, for four employees, is budgeted at $198,150 for 2016. Overtime increased for 2016 by about $10,000, with 200 hours allocated per employee. It was $9,800 in 2015.

“July was their biggest overtime,” James said, which she added included extra patrol during Summerfest and many situations that required more than the staff that was on call.

Total expenditures for the police department increased $15,220 from 2015 to 2016.

“The property tax doesn’t even cover what we spent for public safety,” James said, suggesting that taxpayers get a good value for their money.

The total cost for the police department, fire department and city streetlights in 2016 totals about $419,000. That is less than the projected $361,240 to be paid to the city in taxes, James noted. The remainder is made up by various other sources of revenue.

While other departments saw an increase, expenditures for the city’s street department decreased, with the city paying less in a salary shortfall than previous years and large amounts of funds dedicated for snow removal being transferred into a special fund.

That department’s salaries are paid from the state and the city makes up the difference out of the general fund.

There are also instances in which the city loses money. One prime example is the city landfill, which is a public service.

Fees collected by the city from people using the landfill were budgeted at only $9,000 for 2015 and 2016, but the expenses anticipated totaled nearly $30,400. A majority of that expense, according to James, is for landfill loader maintenance and new tires, pricey at around $13,000.

The Bowman Regional Public Library makes up one part of the city’s total tax levy. The library requests four mills, or a total of $19,328, from taxpayers. If the library does not receive four mills, they don’t receive the maximum state funding, according to James.

The city is projected to pay the library an additional $21,500 in operating funds for 2016. That number has remained the same since at least 2014.

The remaining mills rounding out the total 74.76-mill city tax levy are for Social Security and retirement for city employees and the commissioners. The retirement funds total 12 mills, or $57,984, which is an increase from the 11 mills requested this year.

A collective total of $361,240 is proposed to be levied from city tax payers in 2016—$211,448 for property taxes; $19,328 for the library; $67,648 for city employees’ social security; $53,152 for city employees’ retirement and $9,664 for the cemetery.

The budget shows that a total of $270,500 from the general fund will be paid into special funds in 2016. The city budgeted to put away about $535,000 in special funds for this year.

Of the city’s special funds, the largest were those for water, sewer and garbage.

The city’s water fund was projected to have a revenue of $367,000 for 2016, an increase from $353,200 in 2015, but with a total of $355,733 in expenditures. The balance of the water fund sits at $497,265, making it one of the city’s largest funds for infrastructure.

One of the largest overall expenditures made by the city is for garbage service, totaling nearly $591,000 proposed for next year. That’s an increase from this year’s budgeted total of $573,097.

The difference was mainly due to an increase in salary to cover the department’s five employees—$215,000 in salary budgeted for 2015 and $227,275 for next year.

A $5,000 increase in employee overtime also contributed to the rise.

There’s currently $144,099 in the garbage fund.

The public is invited to attend and present oral or written comments regarding the city’s proposed tax levy increase, beginning at 5:15 p.m. Sept. 15 at Bowman City Hall.

James said not many people have attended such meetings in the past.

“I wish more people understood how fortunate they are,” she said. “They don’t understand how much they get for their money.”

The city will adopt a finalized budget and make the annual tax levy Oct. 6.

The Bowman Parks and Recreation Department is also proposing its own property tax levy increase by 12 percent, or $19,570. A separate public hearing for that department’s proposed increase will be held at 5 p.m. Sept. 16 at Bowman City Hall.

Preliminary budget information pertaining to Bowman County and Bowman County Public Schools was requested by the Pioneer, but was not made available by the time this story went to print.