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County software needs adjustment for Bemidji’s orderly annexation

BEMIDJI – Beltrami County’s computer software for calculating property taxes will need to be modified in order to execute the city of Bemidji’s orderly annexation agreement.

The county plans on taking some steps to do just that after meeting with city staff last week.

“Their software will not accommodate our agreement,” city manager John Chattin said.

Under that agreement, property tax rates for annexed properties would be phased in over time. Beltrami County Administrator Kay Mack said the county’s software phases in property tax rates in a different way.

“When the software was written, it was written to the recommendation that the Minnesota Department of Revenue had made for annexation phase-ins,” Mack said. She added that the software is in compliance with state statute.

Taxpayers could notice the effects of the software’s incompatibility with the annexation agreement.

City finance director Ron Eischens said in an email that recently-annexed properties in Bemidji Township and Northern Township will pay a total of $81,000 less than they would have in 2013 under the orderly annexation agreement’s method for phasing in tax rates. That difference is being made up by city taxpayers. 

“If one taxpayer is paying less than what they otherwise should, that means somebody else is paying more,” Chattin said.

Mack said there isn’t enough time to correct the issue before this year’s tax statements are sent out.

Considering the city’s property tax levy in 2013 is more than $4.1 million, the $81,000 difference is fairly small – less than 2 percent of the levy. Mack also pointed out that annexation will broaden the tax base in Bemidji and benefit taxpayers in the city in the coming years.

Mack said the county plans to ask the software consortium made up of almost 50 Minnesota counties to allow for the software modification. If that group decides not to pay for it, the county will then ask for a price that the city would need to pay to update the software.

She said she’s not sure how much that would cost.

The software has been discussed in recent years in the lead-up to the first phase of annexation in 2012. Mack said when the annexation agreement was being written, the county was “not at the table” to say whether they would be able to execute it.

John Hageman

John Hageman covers North Dakota politics from the Forum News Service bureau in Bismarck. He attended the University of Minnesota in the Twin Cities, where he studied journalism and political science, and he previously worked at the Grand Forks Herald and Bemidji Pioneer.  

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