Crow Wing County Board: Unorganized funding crunch spurs public meetings
Residents of Unorganized Territory will have a chance to weigh in on an impending road construction budget crunch.
The Crow Wing County Board Tuesday agreed to host at least two public meetings to solicit input on how to solve the funding issue, which would leave Unorganized Territory—known as the First Assessment District—without funds to expend on any road construction by 2021. County Engineer Tim Bray first outlined the issue to the county board in April. Commissioner Paul Koering requested addressing the issue sooner rather than later and Bray prepared a potential timeline to include a possible fix in the 2018 budget. The county board acts as the township board for the area north of Brainerd, which although not an organized township or city is the third largest population center in the county.
In April, County Administrator Tim Houle said two main factors are contributing to the dwindling fund balance in Unorganized—increased maintenance costs associated with snowplowing township roads and the normal inflation of costs of goods and services the county is purchasing on behalf of the assessment district.
Houle said the county is now spending roughly what it's levying residents of Unorganized Territory on maintenance and fire protection, meaning construction costs are covered by the savings account for the assessment district. That fund will reach the recommended minimum by 2021, essentially leaving three options for the board: to raise property taxes for residents, to implement a system of assessing property owners adjacent to a road under construction, or some combination of both approaches.
In Bray's presentation, he estimated $500,000 annually would be required to cover construction costs in Unorganized Territory. This would cover 3 miles of overlay, 3 miles of seal coating and would put each road on a 20-year replacement cycle.
Koering asked whether assessments were an option, pointing to his own experience as a former Baxter business owner and assessments he was required to pay there.
"That is a question that's open for debate," Bray said.
Bray said it would be up to the board if they wished to implement an assessment system. In the past, assessments were used in Unorganized Territory only when residents petitioned for improvements to a road from gravel to pavement.
Commissioner Paul Thiede expressed concern at the speed of Bray's timeline.
"There are always those who complain we move too fast," Thiede said. "I'm hesitant to say we're going to accomplish this for the 2018 budget."
Bray's proposed timeline would have public meetings in June, July and August, with the preliminary budget for Unorganized presented and certified by September. After that time, a levy can be decreased, but it cannot be increased.
Koering said he believed there was "some urgency" to determining a solution to the funding issue.
"Pretty soon, we're sitting there and having to make a big decision without much time," Koering said.
Commissioner Rosemary Franzen agreed with Thiede over his concerns on the timeline.
"I want to get this started, but I also don't want to rush it," Franzen said.
She said it was important her constituents understand the problem and show up to share their concerns. Franzen and Thiede both represent parts of Unorganized Territory.
"Doing what our constituents want is part of what we do," Franzen said. "We need to do what's right for the majority, but we also need to listen."
Koering said he disagreed, noting they made decisions as a board all the time for the entire county, not just their own districts. He praised Bray for working on the issue four years ahead of time.
"If nobody shows up (for meetings), that's the way it works," Koering said. "That's why people elected us to make a decision. ... We have to make tough decisions."
Thiede said although they make decisions for the whole county, taxpayers in his district pay an "extraordinary share" of the property taxes in Crow Wing. He said residents of Unorganized Territory have been treated differently because the county board serves as their government.
"Maybe what comes out of this is they recognize they are the third largest city and maybe they say it's time to rethink that as well and form a government, I don't know," Thiede said. "I'm not promoting that. I'm not saying my constituency would be for that. I'm saying that's part of this rational discussion we can have."
Houle said the good news was commissioners did not have to decide how to solve the problem Tuesday. He said several assumptions could be adjusted, including increasing the time length of the replacement cycle or adjusting the minimum fund balance. Houle added if the board would need to increase the levy by $500,000, it might be important to consider doing so with a "gentle increase" each of the next four years.
The property tax levy for Unorganized was already increased by 6 percent between 2016 and this year. The 2017 levy is $755,651, an increase of $42,983. If the levy were raised by $500,000, that would reflect a 66 percent increase in the funding acquired through property taxes.
Commissioners agreed to allow Bray to proceed with planning public meetings for Unorganized, and requested a mailing be sent to residents once the meeting schedule was established.
Bray is expected to present the meeting schedule at the May 23 county board meeting.