St. Louis County commissioners are one week away from deciding how much, if any, the county's share of 2011 property taxes will go up.
County Administrator Kevin Gray told the County Board on Tuesday that staff was nearing a recommendation on how to close an $11 million budget gap.
Commissioners will vote Sept. 14 on the highest possible levy, as required by state law. The final levy, set in December, can come down from the September number, but it can't go up.
The largest budget hit has been cuts in state aid to the county. But the county also has taken a hit in income from its cash savings, as interest rates have plummeted. Revenue from timber sales and land sales also are sluggish.
Gray said his staff is likely to suggest a budget that combines a small levy increase coupled with additional spending cuts. Those cuts so far do not include layoffs of county employees, but the budget will depend heavily on leaving dozens of open positions unfilled and on not replacing the more than 150 county employees expected to retire in 2011.
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Under state law, the county could increase its share of property taxes about 8 percent for 2011, but only a tax increase of 4.5 percent would be needed to cover the entire shortfall. But Gray said tax increases that high aren't on the table.
"There's no appetite for any major levy increase," Gray said, hinting an increase similar to 2010's 1.3 percent hike is more likely.
Several county commissioners, including Chris Dahlberg and Dennis Fink of Duluth, have expressed a goal of zero levy increase.
"I think zero is realistic," Dahlberg said Tuesday.
Other commissioners have suggested building in some "wiggle room" with a higher levy in September in case the state makes additional cuts yet this year, thus avoiding additional cuts in staff and services.
The county will handle about $350 million in 2010, although most of that money is "pass-through" money from the federal and state governments for programs administered by the county. Commissioners have more control over about $107.4 million that must be paid for by county property owners.
Also discussed at Tuesday's County Board meeting:
More than 15 years after St. Louis County loaned a Meadowlands consortium $150,000 to build a low-income senior housing building, county commissioners voted Tuesday to forgive the loan. The County Board, voting as the St. Louis County Housing and Redevelopment Agency, voted 6-1 to forgive the old loan that was the catalyst for a 10-unit senior retirement apartment complex. Only Commissioner Dennis Fink of Duluth voted against the request.
The facility was supposed to begin making payments on the loan this year for the next 15 years.
It's one of several small projects the county has helped pay for over the years that provide about 100 units to veterans, seniors and other low-income residents who otherwise might not find an affordable place to live, said Commissioner Steve O'Neil of Duluth. The county's HRA has participated in several projects across the county, including housing in Ely, a veterans facility in Duluth and the Virginia Youth Foyer project.
"Private industry just isn't building low-income housing for seniors, or veterans or runaway teenagers," O'Neil said.
Fink said the Meadowlands project was working well but that the county is setting a bad precedent by forgiving loans that, if repaid, could be used for worthwhile housing projects in other areas.
"There was a deal agreed to more than 15 years ago and they are not meeting their obligations," Fink said. "This is not the way we should be doing business."
Commissioners voted to move ahead toward an Oct. 5 bond sale to pay for a $6 million upgrade to the courthouse in Virginia, including new windows and heating, air conditioning and ventilation system upgrades as well as remodeling and an addition for the county sheriff's department and probation offices. The county also plans to sell bonds for about $1 million in permanent communications equipment for law enforcement centers.
