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Cass County Board: Utility tax case settlements represent 'concerning trend,' auditor says

BACKUS—Chief Financial Officer Sandra Norikane reported Tuesday, April 16, the Minnesota Department of Revenue negotiated settlements with energy companies in two tax court cases, which will cost Cass County more than $30,000.

The two cases settled so far by state-negotiated settlements include one Southern Lights (Enbridge) filed over their pollution control exemption and one Great Lakes Gas filed over property valuation. While this is not a large number out of the county's total levy, $31,457.36 does represent a concerning precedent, she said. Additional cases now in the courts could cost the county $1.5 million or more.

In these cases, the state is negotiating settlements without letting the cases go through all the court avenues, she noted. The negotiations also did not involve local governments' input.

The state sets property values for utilities upon which local levies are based. Some utility companies have challenged the values the state has given their properties, with some initial court rulings going in their favor. Local property tax levying districts refund to the utility company the amount the tax court rules it overpaid. Local governments affected by the cases have indicated a desire for the state to cover the miscalculated tax amounts, since it sets the values.

Enbridge has challenged multiple years of valuations, including for its lines through Cass County. Other pipeline companies have followed with their own challenges. Other types of utility companies have indicated interest in also challenging their values.

Administrator Joshua Stevenson, in a telephone interview Tuesday, said the refunds some counties potentially face will represent as much as 90 percent of those counties' levy. It also means townships and school districts where the utility lines run also could lose money and have to refund a portion of their levies.

In addition to the $31,457 the Cass County has to refund on these two cases, affected townships will have to refund $3,929 unorganized territory, $3,681; cities, $541; schools, $34,515; special taxing districts, $134; and the state, $43,221.

In other business, the board:

Approved renewing the county's contract with Devon Shafer to inspect newly installed individual subsurface sewage treatment systems. The rate per inspection will increase from $95 per inspection to $110 per inspection, with a reduced $50 each rate if he is unable to view the system before it is covered.

Environmental Services Director John Ringle said there are only two or three instances each year when weather or other factors prevent Shafer from viewing a system before it is covered. He completes about 250 inspections per year.

Approved an environmental services letter of support for Minnesota Lakes and River Advocates pursuing a project to stop the spread of starry stonewort through containment. Currently, Cass Lake is the only lake in the county known to have been infested with this invasive algae.

Approved assessor's office abatements by adding a house missed on an earlier appraisal to a property in Hiram Township, which increased taxes due from $1,898 to $5,630 and by correcting clerical errors where homestead mistakenly had been dropped from three properties and disabled veteran dropped from another property.

Accepted the Holmvig Excavating's low bid to grade and haul additional material for Bungo/Moose Lake, Deerfield, Bull Moose and Old Grade recreational trails twice this year for $6,440.

Learned the county sold five of six timber tracts offered for cutting to loggers for $74,891. The loggers paid $37.64 per cord for aspen and $30.91 per cord for red oak.

Approved a reciprocal easement across county tax-forfeited lands with Ellen E. Leger and Kathryn Whitney.

Approved a resolution affirming the county's support for Region V+ adult mental health initiatives comprehensive re-entry program to reduce the number of people with mental illnesses in jails.

Passed a resolution supporting the Sourcewell application for the Regional Yellow Ribbon Program.

Passed a resolution to seek funding from Sourcewell for regional training of public health agencies in healthy mood management for pregnant women and new mothers.

Approved paying $5,000 annual support for the Cass County Agricultural Association at Pillager.

Approved out of state travel to enable deputies Mark Diaz and Charles Lahman to attend drug expert training this month in Jacksonville, Fla. The state will pay the cost.

Learned the county earned $278,941.47 interest on investments through March this year, up from $232,807.83 last year. This represents 29 percent of the amount the budget projected for the year.

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