Beltrami County's proposed 2010 budget calls for a 1.91 percent property tax levy cut, but not without some controversial moves.
It means ending county home services, cutting administrative aid to the Beltrami County Soil and Water Conservation District and asking county 4-H'ers to raise funds on their own.
"Staff put a lot of effort into the budget development process because of the state budget," County Administrator Tony Murphy told commissioners Tuesday. In an effort to fill a $6.2 billion state budget shortfall, legislative and Gov. Tim Pawlenty's actions will mean about $2.1 million less to the county in state aid.
"There will be no tax increase, and in fact there is actually a decrease," Murphy said. "There is no increase in the property tax levy, not even for new construction."
In past years, commissioners have held the property tax increase to the rate of inflation plus the property tax dollars generated by value created by new construction.
The proposal laid out by Murphy calls for a property tax levy of $16.97 million in 2010, down $330,855 from 2009's tax levy of $17.3 million, or a 1.91 percent reduction. Also, looking ahead for two years, property taxes could go down again in 2011, to $16.55 million.
"The levy would decrease $330,855, with most of that -- $180,000 -- coming from the airport," Murphy said. It's the amount that the county used to levy to pay for Bemidji Regional Airport operations, a fund no longer needed since the newly aligned Bemidji Regional Airport Authority is levying that amount on its own.
""It is important we want to publicly honor our commitment about the airport," Murphy said of making the transfer of funding from the county to the Airport Authority revenue neutral.
"I can't say what the city will do," he added, referring to the like amount appropriated by the city of Bemidji to the airport but which city councilors have said they may prefer to keep to help fund Bemidji Regional Event Center operations.
The levy decrease also reflects an end to funding for the development district levy the county used for the city to provide infrastructure to the former county fairgrounds now housing Target Store, he said. That levy was $131,398 this year.
"This budget is a reflection of the fact that many people in our county are going through tough times," Murphy said. "This is not a time for government to add to their hardship."
The budget will not levy back county funds cut by the state through unallotment, he said. It does not backfill stt funding cuts for services and programs through local revenue sources.
Commissioners and county department heads spent the summer trying to prioritize county services, and attempting to cut or trim services the county should not provide or could be provided better elsewhere.
For example, Murphy said the county will end homemaker/shore services which sees a property tax subsidy. "The expectation is that the private sector will take over those functions in the county. There has been some interest shown."
Similarly, the county would begin in 2010 to phase out home care services, ending it in 2011, giving it an extra year to transition to something else, he said.
When Commissioner Quentin Fairbanks asked if county support ended would mean sending more frail elderly from their homes to nursing homes, Murphy said the goal is to provide the same services in the private sector.
"We don't want to eliminate the services and send people to nursing homes," Murphy said. "There is sufficient hope out there that the private sector can do it."
Expenditures for the county 4-H program would be kept at the same level as 2009, but the county is asking 4-H'ers to contribute $5,000 in 2010 and $10,000 in 2011, Murphy said, to maintain the program at current levels. Currently, the 4-H food booth at the county fair is its biggest fundraiser, at about $7,000.
County Board Chairman Jim Lucachick noted the budget proposal would end administrative support payments to the Beltrami Soil and Water Conservation District. "SWCD feels it will not be in existence and it goes against an agreement signed by Beltrami County."
The county budget proposes to continue project match funding for clean water projects and funding for Wetland Conservation Act enforcement, Murphy said. About $45,000 is at stake.
"There were a lot of agreements on both sides," Murphy said, adding that SWCD officials have asked to meet with commissioners at their next meeting, Sept. 1. "They were to look at projects we say are priorities and to provide citizen services on a fee basis. In reality, SWCD has not supported one project in several years. This should not surprise them."
But Murphy says he welcomes a meeting with SWCD and hopes they find a new business model that doesn't need county subsidies, as it is an elected body with its own mission. "There are lots of SWCDs in the state that are thriving."
In another move, the proposed county budget would for 2010 and 2011 freeze the county's contribution to the Kitchigami Regional Library system at 2009 levels.
On the plus side, Murphy said the budget reflects an expected savings in out-of-home child placement services from the Leech Lake Band of Ojibwe's participation in a state pilot Indian Child Welfare Act project, and the budget provides transition funding for the Red Lake Band of Chippewa's anticipated shift to a federal relationship for child placement services.
Also, the Obama administration recently overturned a Bush administration decision not to provide targeted case management services, so new federal funds for such services for child welfare programs will offset some of the state-imposed cuts, Murphy said.
As of July 1, the county reduced personnel costs by more than $1.1 million by not filling vacant positions, amounting to more than 23 full-time-equivalent positions, he said. But the county will need to balance jobs, as vacancies hit some areas harder than others.
With the county jail needing upgrades, Murphy also proposes to accelerate payments on current jail debt to allow flexibility for new bonding -- paying off current debt with $600,000 over two years.
In consolidated funds, total county revenues would total $57.99 million for 2010, down from $58.1 million this year. Expenditures would total $58.1 million in 2010, up from $57.6 million this year.
There would be a deficit at year's end of $119, 030, which Murphy said would be covered by county reserves -- which stood at $31.161 million on Dec. 31.
The problem area that concerns Murphy is in natural resources funding, a non-property tax funded area that gets its funds from the sale of timber on tax-forfeited lands.
That fund is expected to run deficits of $311,591 this year and $375,216 in 2010, he said. "It's a challenge with the (timber) industry and that stumpage is not there. It's a budget area that needs some work."
Commissioners are expected to adopt a preliminary levy on Sept. 1, after which they can only lower it. A final budget and property tax levy for 2010 will be adopted in December.
"It's a very good budget, and I am proud to recommend it," Murphy said.