County sets preliminary levy at 3.5 percent, hearing set Dec. 3

Austin Daily Herald (MN)

Sep. 11--For those looking to have their voices heard regarding the preliminary levy, a date has been set for them to speak their mind.

The Mower County Board approved a motion to set the preliminary levy at 3.5 percent, which totals $22,578,719 for 2020. County commissioners also designated the public hearing for 6:30 p.m. on Dec. 3. Now that the preliminary levy has been approved, the county cannot go above the percentage they set; however, it's possible that the levy could be reduced.

While the county could have set "the true levy" at 1.2 percent, or $22.07 million, which would be an increase of $255,000 from 2019, there were concerns about the rising costs in various areas such as a five percent increase in medical insurance, 30 percent increase in short-term disability premiums, a 2.5 percent increase in cost-of-living expenses, and an increase in liability and worker's compensation between 14 to 24 percent.

County Administratrator Trish Harren stated that there were also increases to county program aid of $374,809 that would add more expenses to the county budget.

Since 2009, Mower County has been paying off a $16.6 million jail bond with yearly payments of $1.3 million. The lifespan of that bond will retire in 2022, Harren said. However, because there was going to be a five percent interest increase to bond payments, despite paying down about $10 million, it was decided in 2018 that the county would pay off the remaining balance of about $6.36 million to help save money in the county's budget.

With that decision, this freed about $1.68 million to cover the increasing costs of insurance and program aid.

"Because of the visionary thinking for paying off the jail bond, the county is in a good position to accommodate in the budget for the rising cost of insurance and other budget increases," Harren said. "We didn't want to pay a 5 percent interest rate, when the average interest rate in the market is between one to two percent."

In order to pay off the bond and avoid a higher interest rate payment, the county had to pull $6 million from its cash reserves. By state statute, the county needs to have at least five months worth of reserves set aside. With the bills that Mower County accumulated, they were already pretty close to hitting the bare minimum.

If the county board hadn't approved paying off the jail bond last year, then the preliminary levy would have been set much higher at about nine percent, Harren said, which would cover budget increases and expenses, but would have cost taxpayers more.

"That's why we're setting this for a 3.5 percent levy increase as opposed to the 1.2 percent," Harren said. "We want to be able to have some cushion and have some cash be put back into our reserves."

What also helped save money for the county was the reorganization of the Health and Human Services Department (HHS) this year. By the agency restructuring and reorganizing its department, as well as leveraging its resources, HHS was able to increase its revenue by $750,000, which meant that the department's funding requests only made up less than one percent of the proposed budget.

"It's a really good year," Harren said. "We're really pleased that we could have such a low levy increase. Doing this helped free up our funds and be able to cover additional budget expenses."

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