Sometimes, just like the average person, cities can incur costs through no fault of their own. This is exactly what happened to the city of North Branch, to the tune of over $41,000.
During the Aug. 27 city council meeting, Finance Director Joseph Starks had to give the bad news to the council. According to Starks, this expense is coming due to an appeal by Northern Natural Gas of the assessment of their utility equipment and structures.
“The county assessor assigns the value of the land,” Starks said. “The Department of Revenue assigns the value for the utility equipment and structures. They were appealing that assessment.”
Starks explained that the appeal process goes through tax court, who just ruled in Northern Natural Gas’s favor.
“Essentially, what it equates to is that we are going to be required to refund for 2016 and 2017 $41,000 plus interest,” Starks said.
Starks added that, while other revenues should hopefully cover the unexpected expense, the city does maintain reserves for these sorts of cases.
“Hopefully, it is a one-time cost,” he said. “But they also appealed 2018 and 2019, and that doesn’t include that appeal.”
Starks said this ruling will also impact other cities within the county, plus the school district.
Council member Kelly Neider asked if there was a recourse the city could take on the ruling.
“Not that I’m aware of,” replied Starks.
“So it’s just one of those hitches in our giddy-up,” Neider said.
On the positive side, Starks indicated that all departments are currently generating more revenue than expenditures.
“At this point of the year, the city is on target with respect to the budget,” Starks said.