Cass economic indicators show slow improvement
BACKUS - Cass County economic indicators show a very slow improvement this year after six years of decline, but it is not enough yet to bring any new revenue to the county, Administrator Robert Yochum said.
He and Chief Financial Officer Larry Wolfe gave the county board and department heads their view of the ever-tightening county budget projection for 2015 during the county's annual planning meeting Friday at the land department building at Backus.
After six years of levying the same dollar amount in county property taxes, the county has spent its contingency fund each year and has used some fund balance money during those years.
While expenditures so far in 2014 are running under budget overall, Wolfe said he does not expect to be able to see the county fund balances increase again until after construction picks up more significantly and, therefore, county-wide property value rebounds much more significantly.
At the same time, Yochum said some new state and federal regulations now require the county to spend more to accomplish the same tasks.
He cited a new requirement designed to protect data privacy, which requires the county to have someone accompany night janitors who clean offices. The state's new definition of "responsible contractors" may prevent the county from hiring some contractors used in the past, potentially limiting the number of bidders and driving up costs.
Wolfe said the state has not kept current with federal regulations, leading the county to now have to change some financial reporting procedures to match federal rules. The county had been following state rules.
Several department heads reported expected retirements next year. They asked for extra pay for those retirees to train their replacements before their retirements. Other departments cited increased workload and suggested they might seek additional employees.
Each department head reported on trends within their department and projections for 2015.
Auditor-Treasurer Sharon Anderson said she expects to engage an independent firm to review and recommend changes to the county's investment portfolio next year. She plans to do a complete rewrite of the county's personnel manual, deal with technology demands and improve employee training on ever-changing data privacy concerns.
Election law changes could force the county to purchase new election equipment by 2016 rather than the planned 2018 date. The state has changed the way her office reports property tax data to the state, she said.
Sheriff Tom Burch reported a continuing increase in jail bookings and numbers of inmates. His plan to economize by shifting more jail monitoring to a central control at the dispatch center has been delayed by personnel being out on worker's compensation, he said.
Scanning old records into electronic systems should be completed by next year, he said. More crime data is being shared with neighboring departments.
The state has pushed the county to replace its three dispatch work station terminals, so Burch said he now is getting quotes. He had told the state he did not intend to replace those until they broke, because they are virtually new. However, there is a newer model the state now requires, he said.
County Engineer David Enblom reported the county is maintaining its road surface quality so far with county property taxes supplementing state aid revenue, which he said is 25 percent underfunded. However, roads may deteriorate to unacceptable levels unless current underfunding changes in the next five years, he said.
He is hopeful the federal government will fund their transportation bill before Cass's next federal road projects, scheduled for 2016 and 2017. He also hopes the state will either increase the gas tax or levy a wholesale gas tax within the next two years to increase state aid funding.
Enblom said a proposed 6.5 percent state wholesale gas tax would be equivalent to a 13 cent retail gas tax increase and would bring state aids back closer to the level needed to maintain road quality. Otherwise, Cass might have to look at levying the allowable wheelage or sales taxes.
Recorder Katie Norby reported the number of abstract and Torrens documents recorded was down in 2013. She also reported the Minnesota secretary of state has moved to transfer filing UCC documents (liens) from the county to the state by Dec. 1, 2014, causing a loss of county revenue.
She may recommend hiring an outside contractor to scan some old records into electronic form, because attempts to scan in her office have produced poor copies. It will take years of work to digitize everything, she said, noting Cass's records go back to 1872. Records currently are indexed only back to 1973, she said.
Assessor Mark Peterson reported Cass market values had a .71 percent upturn after five years of decline in the countywide property valuation. Real estate transactions were up 7 percent the first quarter of 2014 and 1 percent the second quarter. Foreclosures were down 33 percent the first quarter and 50 percent the second quarter this year.
New construction is more for additions and garages than for entire new homes, he said.
The assessing office will do a reassessment of all tax exempt properties this year, plus regular assessments on one-fifth of taxable properties. Six staff appraisers are taking additional training and testing to meet new state certification requirements.
Cities, towns and the county could face repaying a sizeable tax refund, depending on the outcome of tax appeals Craguns and Enbridge have filed in court against the county. The Enbridge case involves all counties in the state that its pipelines cross.
If the state loses that case, it could mean the repayment of up to $300,000 for 2013 taxes, $700,000 for 2014 taxes and $1 million for 2015 taxes, Peterson said. Any school tax repayment would be offset by state school aids. A court hearing on that case is set for December.
Peterson expects that decision will be appealed, whatever the verdict.
Central Services Director Tim Richardson said the county's network switching system needs to be replaced. Data storage increases faster than the county can expand disk space, he added. The county will have 24-hour monitoring on its data security system.
Cass's heating fuel costs rose significantly with the propane gas shortage this year. Excel Energy is considering bringing natural gas to Walker from Cass Lake, which could give the county another fuel option for its buildings in Walker.
Richardson expects rising electric costs also to be a factor for the county, especially as the federal government increases pressure on coal-powered plants. Much of northern Minnesota electricity comes from coal-powered plants.
Environmental Services Director John Ringle said there have been more permits for home additions and variances than for new houses. Overall, construction permits have been about level the last two years, he said.
State grants from the state lottery revenue have enabled Cass to process 10 conservation easements on private property, he said. The Soil and Water Conservation District will distribute state funds the county receives to increase boat inspections at public landings and designate worthwhile lake association projects to prevent the spread of invasive species, Ringle said.
A county subcommittee is working to develop a county policy for land being converted from forest to agriculture, giving consideration to water usage and to preventing groundwater contamination, he reported.
Probation Director Jim Schneider reported new state legislation encourages people who complete their sentence and probation and qualify to go through the process to expunge their record and obtain restoration of their rights. The Legislature passed this to enable people to start their life over, he explained.
Probation will seek a grant to monitor people who are released pending pre-trial court hearings. Laptops have replaced desktop computers for probation officers, enabling them to take their office with them when they do field work, Schneider said.
Court Administrator Bob Sommerville reported case filings rose 3 percent from 2012 to 2013, but were down 20 percent from 2004. He expects to finish shifting all court records to electronic data by 2015 and making public records available on the Internet. Paper, storage and mailing costs will be cut, he said.
Recent legislation eliminated the need to have court documents notarized and credits convicted persons' payments to restitution before paying court fines. Legislation also now requires people to be convicted before their property can be forfeited.
Land Commissioner Joshua Stevenson said wood manufacturers' log inventories are down, but loggers had a hard time supplying them last winter due to extreme cold and this summer due to wet conditions. Land department standing timber sales have been down this year, which he expects to continue until loggers catch up cutting their existing sales.
Stevenson said Enbridge hired six bat experts to survey bat populations along the proposed Sandpiper line and found high long eared bat populations all along the line. Stevenson attributes this to the county's timber management plan to benefit wildlife.
Should his argument to share Cass's management plan fail, federal plans to list the long eared bat as endangered could end summer logging in the future. This would represent 40 percent of Cass timber sales and 50 percent of its revenue, he said.
Stevenson reported more tax forfeit properties have buildings on them than in the past, increasing county costs to remove dilapidated ones before selling the land. That increases county costs. As of May 92 pending tax forfeitures had a building on the land, he said.
Assistant County Attorney Barb Harrington reported case filings are up annually. She expects County Attorney Chris Strandlie will request additional staff, because of this and that the county attorney's office also is now filing electronically records formerly filed by court administration.
Heath, Human and Veterans Services (HHVS) Director Reno Wells said he expects counties to assume responsibility for 115,000 MN Sure cases along with existing rising caseloads. In 2015, HHVS will work to improve processing time to service all assistance, which has fallen behind state requirements as cases rose.
Home visitation programs have been successful and are being expanded in veterans services, he said. Privacy policies are under review. Finding enough home care assistants has been a challenge as efforts to keep more people needing help to remain in their homes rises, he said.