Crow Wing County Board: LEC can wait, commissioners say
Three Crow Wing County commissioners favor waiting, perhaps for years, before considering spending for a new law enforcement center.
Commissioners Rosemary Franzen, Paul Thiede and Paul Koering met as a committee of the board Tuesday morning.
Franzen said the three commissioners present at the session want to see the county debt free.
“I think that is our biggest priority,” Franzen said.
Last fall, during budget talks, the board put a decision on a proposed new law enforcement center (LEC) on hold. A proposal before the county is whether to spend $15 million for a new LEC. Proposed spending for the LEC would come in existing county reserves, refinancing and extending the debt for one year. Mike Carlson, finance director, noted the interest rates may not be as favorable in the future at they are today. In five years, Carlson said, the county won’t be able to generate the resources it needs from the bond market and will need to hang on to savings to fund a building project down the road.
The county is currently looking at refinancing a $30 million debt, related to the campus building project that put up the judicial center, community services and jail. At the time a new LEC was not constructed but was planned as a future addition by the jail.
In essence, the board is now looking at whether to spend the savings its put away with an eye toward a new LEC, put the money toward other needs such as highways, possibly pay down the debt or to keep funds in reserve against unexpected costs or an LEC in the future.
It may be related to an individual saving money to buy a car and deciding to put off the car purchase. Should the money be spent to put in windows on the house instead, pay off debt, or held in reserve against unexpected bills — perhaps car repairs. If cars go up in price in the future, will the money in reserve be enough or will waiting mean borrowing money at higher interest rates for bigger debt in the future?
Thiede said that’s where his thoughts differ with Carlson’s. Thiede said he thinks of it as paying off a mortgage when there is money on hand and in five years if interest rates are at 20 percent, discipline needs to be exercised to spend less. Maybe that means a smaller LEC in the future, Thiede said.
Carlson said the county has about $11 million saved for use for a one-time project. The county has long noted money could go toward highway needs, to pay down the debt or for something like the LEC building proposal in the future.
Koering said he was opposed to building a new LEC to replace the 30-year-old building and would like to see the county without debt. Carlson noted the LEC’s use as a jail makes it a complex remodel to use the secure areas.
Carlson proposed a question to the commissioners, asking when the right time may be as the LEC will need attention at some point down the road. Carlson said he thinks the pressure on the county is from the need for a new LEC in the next 10 years.
Koering said economic development to grow businesses and jobs in the area is also dependent upon keeping taxes low.
“I just have a strong opinion on this law enforcement center and I don’t want to be wasting time on something I’m pretty sure we aren’t going to do for a number of years,” Koering said.
He asked if there were options to put the question to voters. Commissioners could put it up for a referendum.
Carlson agreed it was a matter of balance and priorities, as capital infrastructure also needs planning for the future so taxes do not spike when a need arises.
The county has been working for a number of years to pay for projects from savings instead of borrowing.
Tuesday commissioners said their goals included being debt free, as the county was before it began its campus building project to put up the new buildings on Laurel Street.
Carlson pointed out the current low interest rates also provided an option, suggesting the refinance, which board members support, should be separated from the LEC building question. The debt refinancing is expected to provide $4 million in savings over time.
Thiede suggested setting aside the LEC discussion for five years and then saving again for the project within the decade as not being unrealistic.
The commissioners met with staff in the ‘Jinx’ Ferrari Meeting Room on the second floor of the historic courthouse. The room was the commissioners’ board room for many years, before the board moved into the historic courtroom on the third floor after court services left the building.
Topics at the session included the 2012 budget, financial planning and an update on how the integration is going in community services. Board Chairwoman Rachel Reabe Nystrom and Commissioner Doug Houge were absent.