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JDA discusses revenue drawing options

By Staff | Jul 5, 2019

By Sue Sitter

Tribune Reporter

The Rugby Job Development Board discussed exercising an option to draw revenue from up to four mills levied on real property within the city limits at their regular June meeting last Thursday.

JDA Executive Director Liz Heisey told the board the City of Rugby would possibly reduce the percentage of sales tax available for the JDA in 2020, and she drafted a preliminary budget anticipating a decrease in sales tax revenue.

Heisey indicated the normal expected portion of every two cents of sales tax revenue for job development purposes was 35 percent, however, that percentage could possibly change at Monday’s City Council meeting.

The Rugby City Council’s Ordinance 420, which would reduce the JDA’s portion of the sales tax did not pass Monday evening.Heisey said she researched past budgets and found City of Rugby Measure 1, which was passed by Rugby residents in the 1992 general election. The measure provided 75 percent of every cent in sales tax for job development efforts.

“I did find an old newspaper article from 1992, and it says a 1 percent sales tax would allow for funding for the business industrial development efforts,” Heisey noted. “It would also allow infrastructure improvement for industrial and job expansion.”

City Ordinance No. 373 specified the 35 percent of two cents would be designated for community development, and the funds would be administered by the JDA.

Heisey told the Tribune she researched more recent budgets and found where the JDA used its mill levy option. Since its founding, the Rugby JDA has had the mill levy option, provided for by North Dakota Century Code. Heisey noted the JDA received revenue from a levy of two mills in 2012.

The JDA’s preliminary 2020 budget showed the value of one mill calculated at $8,000.

JDA Board Vice Chair Rob St. Michel and member Jodi Schaan voiced concerns that property taxpayers may not agree with the increase, which Mayor Sue Steinke described as “very minimal.”

“Minimal means different things to different people,” board member and city council member Gary Kraft pointed out.

“I would like to know about possible mils I would like to know what that would cost an average home,” St. Michel said.

“Is there a way for us to get a number on that? For a $100,000 house, what is the cost on that?”

In an email to the Tribune, Rugby City Auditor Jennifer Stewart said, “The cost to an individual, per mill, on a $100,000 home value is 100,000 x .5 x .09 x .001= $4.50. If the JDA used four mills it would be $18.00.”

The board voted to table discussion on the budget and take it up again at a special meeting after Monday’s City Council meeting.

In an email, Heisey wrote the JDA board should discuss the preliminary budget before July 17, but she did not yet have a specific date or time.

In other business, North Dakota Small Business Development Center Regional Director Mary Beth Votava presented the board with information on the center’s programs designed to help small businesses.

“I think the program is just one of those few things that is worth the price. We say we do not charge our customers, and we do not, but we are taxpayer-supported services,” Votava said.

Describing some of the free and confidential services the center offers, she continued, “A lot of what I do is work with banks. I get a lot of referrals from the communities from the job development authorities such as this one, and from our bankers. We really are, more or less, a third party neutral. So, when we work with our parties, they can be confident that we’re not going to be talking about their projects with someone that isn’t someone they’ve approved for us to talk to, like for example the banks.”

Votava said the center is vital for the survival of new small businesses. “Statistically, 60% (of small businesses) fail in the first five years, three out of five; 82% fail within the first 10 years. That means two businesses are open after 10 years,” she noted.

“And generationally, only about 1/3 of all small businesses make it to a third generation, and that includes family-run businesses. So, statistically, pretty tough. I think we all know that. “

After Votava’s presentation, Heisey shared ideas gleaned from the Economic Development North Dakota conference she attended recently.

The board discussed strategies to keep Rugby an attractive community for workers and job seekers, including providing daycare services that fit the needs of workers with children.

Steinke credited the JDA with creating a positive future for the local economy. “There are going to be some very good things happening to Rugby,” she said.

Board Chair Blair Bratvet and other board members asked Steinke for updates on possible occupants for the Shopko building.

“My last word was a few days ago, and it’s very positive,” Steinke said.

“For retail business?” asked board member Terry Hoffert. Because I’ve heard some rumors, too.”

Steinke answered, “yep, retail business.”

The JDA will hold their next regular meeting July 25 at 12:00 p.m.

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