Crow Wing County: 2nd Unorganized meeting invites resident input

A second meeting Wednesday concerning a potential property tax increase for Unorganized Territory residents was a much calmer affair compared to a chaotic first presentation.

The Crow Wing County Board hosted the meeting at the land services building-a larger, cooler venue than the overcrowded room June 15 at Crow Wing Power. Wednesday's meeting was scheduled on the fly after more than 100 residents were unable to fit into the first presentation.

County Administrator Tim Houle led the session seeking input on an impending funding crunch for road construction in Unorganized Territory, also known as the First Assessment District. The county board serves as the township board for the unorganized area. Based on current expenditures and township-level property taxes levied, county officials estimate no funds would remain for road construction by 2021 without a tax increase.

The unorganized area is the third largest population center in the county behind Brainerd and Baxter and contains the highest number of township road miles-58-in comparison to the 29 other organized townships. Because the area between Baxter and Nisswa is not an organized city or township, the county board is the governing body. Houle noted the area is by far the most populated Unorganized Territory in the state.

To fully fund road construction and preservation assumed necessary to deliver a level of service comparable to that provided by the county and other area municipalities, Houle said, it is likely a three- to four-year period of significant property tax increases will be needed. Possible ranges are from 12-18 percent annually. This may be followed by more moderate increases of 4-5 percent annually over the next six to seven years.

Tax trouble

Until the county's realization of Unorganized Territory's future funding woes, its residents have enjoyed some of the lowest per capita levy rates of all townships. With 5,488 residents, it ranks 26th out of 30 for its road and bridge levy, and 29th out of 30 for its total levy per capita. Center, Timothy, Perry Lake and Fort Ripley townships are the only ones ranking lower in road and bridge levy per capita, and each has less than 1,000 residents. Timothy Township has just 140 residents.

What's driving the potential need to raise the Unorganized levy by $500,000, an increase of 66 percent? It's a combination of past accounting errors allowing county tax dollars to subsidize the unorganized township's road work and spendable funds from the area's savings account dwindling over the next four years, Houle said.

Before an overhaul of the county's financial practices, lax accounting led to incorrect billing to township funds-meaning work completed exclusively for township resources was sometimes paid for from the county's revenue, rather than that collected at the township level. This led to a large fund balance, which at its peak topped $3 million, of unspent tax dollars. The construction scheduled for completion through 2020 will be paid for from this fund, drawing it down to 30 percent of the township's overall budget.

Houle explained the potential increases applied only to the residents' township levy-not their entire tax bill, consisting of taxes levied by the county, school district and special taxing districts. He noted a series of assumptions were made to develop the proposal, including a 20-year construction cycle for township roads and the completion of 3 miles of overlay and seal coating each year.

Based on calculations, township property taxes on the average residential homestead property would more than double over the next decade, from $183 to $379 by 2027. Averaged over 10 years, this amounts to a nearly $20 increase annually. Without increases, the property tax levy would continue to pay for fire coverage, administration and maintenance-such as snowplowing, grading and mowing-but could not support construction.

These assumptions could be changed depending on the desire of residents, Houle said, whether that means overlaying less miles or doing so less frequently.

Residents offer input

Residents asked questions concerning specific roads, offered alternatives, expressed support or opposition and addressed whether and when the roads are accepted into the public system.

Rick Skogen said rather than a complaint, he had an idea. He suggested a representative from each corner of the First Assessment District form a kind of advisory committee to offer input.

Commissioner Paul Thiede said this could be accomplished through organizing into a formal township or city. Skogen clarified that wasn't what he meant with his idea.

"We are here to hear from everybody now," said Chairman Doug Houge. "A representative from each area-I'm not sure that we need that."

Mike Howard asked whether the county would offer support, should the territory wish to organize. Houle said they could answer questions about the process, but would not advocate for one solution or another. He said a referendum on a ballot was how organizing was typically accomplished.

Howard went on to suggest the county consider seeking legislative approval for a local option sales tax in Unorganized Territory, or impose an entertainment tax.

Commissioner Paul Koering was unsure this would generate the funding needed.

"All the big sales taxpayers are in Baxter or Brainerd," Koering said. "You're not going to collect much sales tax."

Frank Lemke said with his own experience in city and township governments, he knew it was a thankless job and would not advocate for an additional layer of government. He said the projected increases amounted to a night out with his children and grandchildren.

"I'm not going to worry about a couple hundred bucks on my taxes," Lemke said. "If people see that the government is spending their money well, than people are not going to worry about it."

Mary Nieken offered a counterpoint on the matter, noting for some senior citizens on limited incomes, the increase could have a greater impact on their pocketbooks. She offered the example of a senior resident she knew.

"That is causing hardship," Nieken said. "She's not able to work at her age."

Houle said this was important to acknowledge.

"How can you work in the public sector or work as a public official without listening to the story of that senior citizen and not be moved?" Houle said. "We think about those kinds of things all the time."

Houle emphasized they began this process early, to ensure the best decision could be made well in advance of 2021.

Commissioner Rosemary Franzen asked the board to set another meeting date and to send out postcards with the date to all residents. This request acknowledged a mailing snafu for the first meeting, which caused a delay in notices. Thiede said it wouldn't be fair to schedule a meeting without Bray's input, as he was on vacation this week. The board informally agreed to mail a postcard once a date was set.

How to submit an opinion

Unable to attend a meeting in person? Visit https://tinyurl.com/ya8ftesn to view the county's presentation and visit www.surveymonkey.com/r/FAD-2021 to complete a survey.