The Daily News

Wahpeton's Economic Development Commission (EDC) and Community Development Corporation (WCDC) met Wednesday in an attempt to better open the lines of communication on how to efficiently utilize sales tax revenue for the city's entrepreneurial endeavors.

Alisa Mitskog, EDC chairwoman, said since she's joined the commission, she's developed a concern for a precedence they may be setting.

"It seems like...we are approving almost everything that's in front of us," Mitskog said. "I would like to see some prioritization or more dialogue between the two groups and more planning in the upcoming year."

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Wahpeton recently fiscally marked the end of second quarter, collecting just under $650,000 in sales tax revenue to date.

Darcie Huwe, Wahpeton finance director, indicated the figure is down approximately 4 percent when comparing it to the same time frame in 2008.

"We don't have to sweat yet, we're still within almost a nine percent increase over the proceeding three-year average, so, overall, the trend is good," Huwe said.

If a voters don't pass a half-cent sales tax increase for flood costs at a special election August 18, the economic development groups could see their revenue diminish even more.

A funding formula, which dedicates 40 percent of the collected sales tax revenue to flood mitigation, 40 percent to economic development and 20 percent to recreation, would likely need to be restructured, Huwe said. A higher percentage of the sales tax revenue would likely be dedicated to flood mitigation due to current expenditures exceeding received revenue.

"Prior to our most recent bond issue, it had a surplus for funds, where it had collected more money than the obligations it had," Huwe said, referring to sales tax for flood mitigation. "That's no longer true. It currently has more obligations than it has revenue."

With obligations of their own, Mitskog questioned EDC and WCDC members whether the boards should consider setting up reserve accounts or plan further for upcoming projects that may need to be funded by sales tax dollars.

Economic Development Director Jane Priebe said reserve accounts have been set up before, but cleaning up other loan obligations may be priority.

The CDC borrowed approximately $354,000 for the development of the city's Rosewood Addition in 2003. Although homes sold quickly in its first phase, special assessment payments remain to be paid.

For the JCPenney property, they wrote off nearly $300,000 and have $250,000 remaining in a revolving loan fund at zero percent interest.

Huwe said that a North Dakota auditor recently relayed to her that if there is no structured repayment agreement on these remaining balances by the end of the year, they would have to be written off again.

"This isn't great when we go to issue debt," she said. "It all happens in the sales tax fund, but that's not really a trend that looks good on the city's overall financial statements. There's going to come a time where you're going to need to have a structured repayment, something where we can put some dollars to that receivable or we need to call it a grant and move on."

Although a number of the committee's questions remained unanswered Wednesday, the group agreed to meet together again with more member input.

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