Crow Wing County: Crowd overwhelms Unorganized tax meeting

A massive turnout of Unorganized Territory residents descended upon the Crow Wing Power building Thursday night to voice opinions on a proposed doubling of township property taxes.

About 100 people packed into a classroom-sized room, filling the seats and lining the walls, while just as many residents spilled into the halls and lobby. County officials scrambled to develop a plan to accommodate those who would be unable to squeeze into the presentation. A second meeting for Wednesday was scheduled on the fly, and County Administrator Tim Houle maneuvered through the crowd announcing the plan.

Acting as the township board for the First Assessment District, also known as Unorganized Territory, the county board called the meeting to seek input from residents concerning an impending funding crunch for road construction in the district. Based on current expenditures and township-level property taxes levied, County Engineer Tim Bray estimated 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.

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, Bray 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.

The presentation Thursday began with a series of mea culpas from Houle and Bray, who addressed the frustrated residents. In addition to the capacity problems, several in attendance said they'd received very little notice, receiving a mailed meeting notification earlier the same day.

"Thank you all for coming tonight," Houle said. "I wish the circumstance was different. Clearly we didn't expect this many people to show up. Maybe we should have. We didn't. That's obvious."

Houle introduced Bray, who first addressed the mailed notification issue.

"I have nobody to blame but myself," Bray said. "It was my fault. What happened was, we had all the good intentions to get it out on time, except that I'm a perfectionist. This is a very important topic and I wanted to get it just right. It took me a couple more days than I had intended to give it to the printer. And then when I did give it to the printer, we kind of lost our bubble that we had talked to them about and we kind of fell into the queue with the rest of their customers."

Bray said mailing the notification in bulk mail further complicated the late arrivals.

Residents peppered Bray with questions as he attempted to proceed with his presentation, many expressing confusion over why the tax increase was on the table and what it would mean for their tax bills.

Chairman Doug Houge eventually asked the crowd to hold questions until Bray was through his explanation, noting many of their questions may be answered by Bray's prepared remarks. Houle reminded residents, no action would be taken, and the subject of the meeting concerned changes at least four years out.

"I'd like to have a more civil discourse than that," Houle said. "We want to know how you would like us to solve a problem. ... There's not bum's rush here."

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, Bray 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.

Relief was palpable in the room when Bray 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 Bray's 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, Bray said, whether that means overlaying less miles or doing so less frequently.

Finance Director Jason Rausch described the purpose of seeking resident input succinctly: "How much do we do, and how fast do we do it?"

"If you're willing to live with 25 (years), it changes the number," Houle said. "This is based on a set of assumptions you can question."

Commissioner Paul Thiede said although this was the proposal, the board could not make policy binding future boards' decisionmaking.

"We can make the best guess as to what you want," Thiede said. "Six years from now, there could be a whole new board."

Residents question, suggest options

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. Some wanted to know how trustworthy the figures actually were, given the potential for inflation and changes in land value or population. Bray explained this was the best guess, without accounting for innumerable other unforeseen circumstances.

The meeting lasted more than two hours, and as it went on, more of those in attendance fanned themselves as the room temperature rose.

Suggestions included lengthening the time between construction projects, making the increases more gradual over time and limiting repairs to sections of road most in need. There was discussion over the area's unorganized status and the potential effects one way or another on becoming a township or city. Many noted now that they understood the funding problem more clearly, they were less upset about the proposition.

"If you tell them specifically what you want them to do ... then they've gotta melt that together and do the voodoo that they do," Houle said of the board. "They say there's two things you don't want to see made-sausage and laws."

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

At least two other meetings will occur seeking public input. Visit www.surveymonkey.com/r/FAD-2021 to complete a survey.

Attend a meeting

The county board will host another meeting at 6:30 p.m. Wednesday, in meeting rooms 1 and 2 at the land services building, 322 Laurel St., Brainerd.

The meeting will cover the same presentation shown Thursday, and residents will have an opportunity to ask questions or provide comments.