Commissioners peppered Cook County Administrator Jeff Cadwell and Auditor Braidy Powers with questions about possible ways to reduce the pending levy increase at their Tuesday, September 13 meeting.
Currently the county is looking at a 26 percent levy increase. The board doesn’t have to submit a preliminary levy to the state until September 30 and it has until December 30 to turn in its final levy, which can be reduced, but not increased.
Last year Cook County had the highest levy in the state of Minnesota at 8.5 percent. The 2016 levy was set at $7,700,780. If reductions can’t be found, the levy would be $8,927,000 in 2017.
Administrator Cadwell, Auditor Powers, commissioners Garry Gamble and Jan Sivertson have been meeting with department heads to see what can be trimmed from budgets.
Gamble called the work “Excruciating.”
Big three— wages, healthcare and capital fund requests
The biggest impacts on the 2017 levy are wages, benefits and capital fund requests from all departments. Capital fund requests total 6.9 percent of this levy, said Powers, with the highway department leading the way with $687,000 in equipment replacement costs for 2017.
“They [highway department] aren’t always that high. Some years their equipment replacement budget is $250,000. Some years a little higher. It’s based on a schedule for replacing equipment,” Powers said.
There are the mandated expenditures for Public Health and Human Services that by law the county is obligated to provide.
Healthcare benefits went up 19.1 percent over last year.
“Are we contractually obligated to pay all of that [healthcare increase] or can we negotiate some of this cost with our employees?” asked Moe.
Cadwell said new employees hired in 2016- 2017 will pay some of that cost, but other county employees are under contract and healthcare can’t be negotiated with them until 2018.
County employees now pay some of their healthcare insurance, averaging about $50 per month for single coverage and $75 per month for family coverage, while commissioners pay $1,200 per year for family coverage or $600 per year for single coverage.
Cutting levy could mean reduced services
Commissioner Moe asked Cadwell if he could bring a levy with a 14.9 percent increase to consider, but Cadwell said it wouldn’t be easy.
“A 14.9 percent levy means we would be kicking the can down the road on our capital equipment fund this year,” he said.
Each $70,000 of spending constitutes one percent of the levy, and Powers said the budget committee is now looking at ways to lower the proposed 2017 levy which could result in potential cuts in services.
“Reducing courthouse hours from 40 to 35 hours per week is one way to save money,” said Powers. “Reducing the replacement schedule for equipment for the highway department might be another thing to look at. Staffing hours at the Sheriff ’s Department could be reduced from 22 hours to 16 hours, and we could look at the service level we now have for plowing roads and adjust that.
“If commissioners pass the half-cent highway transportation tax that would cushion cuts to the highway department,” said Powers.
A balancing act with the fund balance
Last year commissioners borrowed from the county’s fund balance to keep the levy under 10 percent and made a motion to put back the $123,458 this year. It’s important to keep the fund balance at or above 75 percent, said Powers, because the county gets a Triple A rating when the fund balance is at or above 75 percent, which means it can purchase bonds at a reduced rate.
Still, commissioners might decide to reverse their motion and not put the $123,458 back, which would decrease the 2017 levy, but as Board Chair Heidi Doo-Kirk noted, in the past the county board has been putting out fires rather than planning ahead, and she wondered if they should stop that strategy. She added that when she has talked to her constituents most have said they would rather pay a higher levy now than get a reduction in services.
Setting the levy is a balance, said Cadwell, “between doing the right thing for our employees and doing the right thing for the taxpayers.”
Or as Gamble said, “It’s excruciating.”
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