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Questions abound at Fillmore County budget/levy hearing


Fri, Dec 14th, 2012
Posted in All Government

By Karen Reisner

Six property owners attended the public hearing, peppering the commissioners with questions during the December 11 budget and levy hearing, which is required by law. It was noted during the hearing that these public comment hearings are required of local governments, but there is no corresponding hearing for legislators.

County coordinator Karen Brown started by saying 2012 was a busy year. She invited questions during her presentation and they came almost immediately. She noted that the county had purchased equipment mostly with grants to be compliant with the Federal Communications Commission (FCC) narrowbanding mandate. The total project costs were more than $1 million with only about a third of that being paid for with county funds. Most of the rest was paid for through federal grants.

Rich Horihan, Lanesboro, was upset saying he had recently had a fire, called 911 on a smart phone which connected him with a Rochester dispatcher. After an interview the Lanesboro Fire Department was finally called. He questioned the process, the mandate, and the delay in response time.

Sheriff Daryl Jensen said it is part of the process, and they are getting it worked out so that this doesn’t happen. He said the technology needs to catch up and he is looking forward to the day when you can call from Fillmore County on a cell phone and get the Fillmore County dispatcher. A call from a land line or a new cell phone should go to the local dispatcher now.

Responding to questions, Jensen explained the mandate by the FCC was for all public safety communications. The narrowbanding allows for more space for more frequencies. The higher frequencies are dedicated for public safety. MnDot has been responsible for the towers which have been built. Chairman Tom Kaase explained that improved interoperability has been the goal.

It was asked where the funds for the improvements were in the budget. Brown explained that the county couldn’t budget for the necessary equipment or they wouldn’t have been eligible for the federal grants. Commissioner Randy Dahl stated, because of the the mandate, this was something we had to do. Originally, it looked as though it could cost upwards of $4 million. Dahl praised Sheriff Jensen who he said has done an extremely good job by going slowly, obtaining grants, and thereby, keeping the county’s cost down to just a few hundred thousand.

Jensen explained further that during this transition period, they have avoided bonding and have taken a different pathway, accomplishing what we had to while being as responsible as we can be. Commissioner Chuck Amunrud added that a lot of counties in the state spent a lot of money to get up and running quickly and may wish they had gotten there like we did. He insisted Fillmore County did it right by not rushing into it, adding it will be better for our residents over time.

Brown continued reviewing 2012, noting the county’s participation in the study process to determine if establishing a Southeast Minnesota Human Service Delivery System for 12 counties would be beneficial and cost effective. Participation ended due to the potential cost of the 12 county system. It was likely that the much higher salaries of Olmsted County would have been the baseline. Fillmore County is still working on collaborative efforts with some of the counties. Two full time positions have been eliminated in an effort to be more efficient. Fillmore County shares a Community Services Director with Winona County.

Brown sees the open, transparent process of the county as being showcased by a citizens input time during each board meeting, extensive public input in the development of the Industrial Mining Ordinance, and a public budget process.

An electric document management system has been approved with a 47 percent federal reimbursement. It is expected to improve efficiencies, customer service and allow staff to handle higher case loads.

Looking forward to 2013 the county plans to continue to improve efficiencies and eliminate redundancies, pursue additional shared services with other counties, and complete the remodel of the Highway Administration building. Amunrud expects they will be hearing something by this summer on the funding for the Veterans’ Cemetery. Mayo Health systems will be providing medical examiner services going forward.

Trends in Expenditures and Revenues

Total expenditures for the county have been up and down over the past six years. Budgeted expenditures for 2013 are about $200,000 higher than those in 2007. The largest increases in 2013 over 2012 will be in general government, public safety, and highway, airport and sanitation. Social Services, Health, and culture and recreation have slight increases. Conservation of natural resources, general obligation debt service, and unallocated expenses are down somewhat.

Total revenues are also up and down over the same period of time. The portion of the revenue coming from the county portion of the tax levy has increased over $200,000 from 2012 to 2013. The state paid portion of the tax levy is down over $150,000. The budgeted use of fund balances was increased for 2013.

The preliminary levy, which would have had a 4.79 percent increase, would have a per capita cost of $411.47. The county board will set the final levy on December 18. The increase could be decreased to an increase of less than three percent, which would reflect a reduction of about $150,000. The per capita cost for the final levy of 2012 was $392.68. The preliminary budget for 2013 showed a 7.6 percent increase.

An increase of $167,871 in the cost of DFO Corrections for 2013, which is nearly double, equated to an increase in expenditures resulting in a three percent levy increase. Dahl noted that due to this increase they would be looking at the state contract as another option in the coming year. The other major impact on the 2013 budget is the revenue reduction of $158,135 in County Program Aid from the state. Budgeted road and bridge revenues and expenditures for 2013 have increased by $1,704,031. Fund balance used in 2012 was $305,448 and in 2013 fund balance to be used is $320,000.

Fund Balance Discussion

Rich Horihan asked, noting the county’s savings or fund balance has dropped over the years, “Are we kidding ourselves a little bit?” Brown said they have tightened it up so as not to levy more than necessary to pay the bills. Commissioner Duane Bakke said the fund balance for several years was around 54 percent and it now will be at 35 percent. Amunrud said they have been advised by their auditors to lower the fund balance, adding we don’t anticipate going below 35 percent. Commissioner Marc Prestby maintained that if the county keeps too big of fund balance, the state can come in and take it.

Bakke said they have cut on the expenditure side, adding there can be big swings due to the projects to be done in a given year. Horihan worried about expenditures continuing to rise at 7.6 percent as the preliminary budget shows.

Horihan asked about future years when the county will have to rely less on fund balance due to it being already drawn down. Looking forward will you be going more to the tax payers for funding? Dahl noted they have been using the fund balance for infrastructure improvements. After the remodel of the Highway Administration building, the only thing left is the jail remodel. He doesn’t see substantial infrastructure improvements after that.

Horihan, who owns RLH Grain, said his property taxes have quadrupled in the past several years, insisting it can’t continue at this rate. He commented, that for most of us, if there is not money in the checkbook we wait. Horihan said he was here tonight to tell the board about the business community in small towns. “If you can tell me the business community is doing well, well you need some glasses.” His property taxes went up 27 percent. Horihan stressed he can’t keep doing it. There needs to be some balance brought back. Horihan said, “If you want to get back in office, don’t tax homeowners,” but rather, tax businesses, there are not as many of us. He concluded saying he doesn’t want to pay everybody else’s tax.

Dahl said that they do lobby legislators about the commercial tax going to the state. Horihan said most people don’t even know what the ‘state general tax’ is. It is 29.6 percent of his property tax. He suggested the commissioners have their spokesman at the Association of Minnesota Counties work to stop this stuff. He said tax shifts are totally illegal.

A brief note on the state general tax. All commercial-industrial and seasonal recreational property owners pay state general tax to the county where the property is located. The state is levying this tax which is shown on the local property tax statement. The tax originated in the 2001 Property Tax Reform Act. The act changed the way schools were funded in the state. The tax does not go directly to the school district where the property being taxed is located, but the money from the tax is forwarded to the Department of Revenue for deposit in the state’s general fund. The state has borrowed from what it owes the school districts, delaying payment, to balance the state budget.

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