Property taxes explained at truth-in-taxation meeting

The county board has labored this fall to whittle the 2014 levy down to a decrease of $4,213 from this year’s levy. On December 3, 2013 the board discussed the budget in preparation for that evening’s truth-in-taxation meeting.

One piece of good news for the county and the city is that starting in January, they will be exempt from having to pay state sales and use tax. In 2012, that amounted to $25,392 for the city of Grand Marais and $163,287 for Cook County.

The county board is looking at a levy of $6,104,890. It would use $513,241 of the fund balance in order to meet expected expenditures of $18,514,501. Expenditures and the levy have both increased a little over 5 percent a year, on average, since 1989. The levy in 1989 was $2,731,217.

The taxable market value of all taxable property in Cook County is expected to be $1,601,177,900 in 2014, down .4 percent from this year.

In 2001, the county levy represented 45 percent of all the local levies. In 2014, it is projected to be 57½ percent.

In 1996, state aid covered $288,050—2.52 percent—of the county’s budgeted expenditures. In 2014, state aid is expected to be $282,362, covering 1.53 percent of budgeted expenditures.

Seasonal residents paid 50.4 percent of Cook County’s property taxes in 2013, and homesteaders paid 21.4 percent.

The proposed budget that the county board will finalize at its December 17 meeting includes an increase of 9.9 percent in the cost of employee health insurance. It also includes $110,000 to support the new YMCA. The county will fund the current Community Center in the amount of $69,936 and summer camp at the Community Center in the amount of $15,000. For the fourth and last year, it will pay $75,000 toward the cost of the financial deficit at the Grand Marais Municipal Pool, which will close its doors when the new Y opens in January.

Commissioner Gamble said the Community Center Board would be rethinking its role as the YMCA gets up and running. At the truth-in-taxation meeting that evening, he said they do not want to lose the services the Community Center and Minnesota Extension Service have been offering at low or no cost to the community.

The board discussed reducing its non-mandated funding to community entities. Commissioner Gamble suggested they begin a dialogue with those entities this next year in which they discuss the possibility of funding reductions the following year.

Sheriff Mark Falk discussed higher costs in his department this year related to a higher number of inmates. He said that if the department started arresting fewer people as one public official once suggested, they would not be serving the county properly. Commissioner Jan Hall said in the last 10 years, offenders have had more mental health issues, and new types of illegal substances have affected things as well. Sheriff Falk agreed. Commissioner Gamble asked him to compile a report of the cost of housing inmates outside the county in recent years. The Law Enforcement Center is only licensed to hold inmates for up to 72 hours.

At the truth-in-taxation meeting, North Shore Hospital Administrator Kimber Wraalstad explained that the hospital is facing funding cuts from their two biggest sources of revenue—Medicare and Blue Cross Blue Shield of Minnesota. In addition, government regulations are requiring increased expenditures for confidential, computerized record keeping. The hospital will be paying 13 percent more for employee Blue Cross health insurance in 2014 as well.

One community member said the county could save money by requiring its employees to pay more toward their health insurance premiums, a cost many people in the private sector pay totally on their own. He questioned whether proposed hospital renovations are necessary and said, “It was really a sad thing when the hospital lost its 1 percent sales tax.” He said he thinks seasonal property owners may start walking away from their properties because they can’t afford the taxes.

Commissioner Jan Hall said she is concerned that public amenities keep getting bigger and better. Residents can’t afford to pay for all of these things, she said. Commissioner Garry Gamble said they need to prioritize the services that are most important for the community.

Auditor-Treasurer Braidy Powers said many property owners could expect a 9-13 percent change in their 2014 property taxes. County Assessor Betty Schultz (phone: (218)387-3650) and Auditor- Treasurer Powers (phone: (218)387- 3640) are available to help property owners understand their property tax statements and why any changes have occurred.

Note: Most boards try to reduce their proposed levy before a vote on the final levy in December.

More questions about your property tax statement? Consider attending the Truth in Taxation Hearings for the City of Grand Marais and School District 166.

Grand Marais: Wednesday, Dec. 11, 4:30 p.m., City Council Chambers

ISD 166: Thursday, Dec. 19, 6:00 p.m. , Arrowhead Center for the Arts Conference Room

In other county news:

. The board authorized Planning & Zoning Director Tim Nelson to hire Diana Lindquist to be the department secretary. She has been the temporary secretary since Norma Prosser retired six months ago. The department will save some money on the position next year because Lindquist’s job will be 35 hours a week and she will start at Step 1. Norma Prosser was at the top of the pay scale and worked 40 hours a week.

Commissioner Bruce Martinson said he supported the hiring but wanted incoming County Administrator Jay Kieft to look at whether the job could be shared with other departments.

. The board authorized a final payment to Ulland Brothers Inc. for work on County Road 5, the Lutsen Ski Hill Road. The final cost of $667,053.68 includes a 1 percent cost overrun that was due to the cost of some wiring conduit left out of the original specifications, cleanup of some contamination in the soil, and extra pipe to allow expansion of a parking lot at the ski hill. Lutsen Mountains Corp. paid $211,302.64 of the cost.

. The board reviewed sample contracts used by Chisago County and St. Louis County when they authorize grants to organizations in the community. Their contracts require those organizations to obtain regular audits. Auditor- Treasurer Braidy Powers agreed to draft such a contract for the board to consider.

. Commissioner Martinson took issue with a proposal by the city of Grand Marais to subtract any proceeds from the sale of Cedar Grove Business Park lots from the amount it would be responsible for paying each year toward the business park bond. In September, the county board agreed to split the annual payment of $118,287.50 with the city.

Commissioner Gamble said the public had been promised that Cedar Grove Business Park bonds would not be paid out of public dollars, but that is what is happening.