HERON LAKE — Jackson County commissioners last week took action to thwart the Heron Lake Watershed District’s request to double its general operating levy and gain bonding authority to finance ditch improvements.

Also expected to weigh on HLWD's requests during meetings Tuesday are commissioners in Nobles and Cottonwood counties. The watershed district is located in portions of all three counties, as well as Murray County.

The counties were asked to pass resolutions —whether in support of or opposition to the watershed district’s potential levy increase and bonding authority — by District 22B Rep. Rod Hamilton (R-Mountain Lake), who met with commissioners from each of the four counties, the watershed district and District 22 Sen. Bill Weber earlier this month in Heron Lake. Because there was no majority presence from any of the governing boards, the press was not notified of the meeting.

The Heron Lake Watershed District seeks to increase its general operating levy from the current cap of $250,000 to $500,000. The increase requires legislative approval, resulting in Hamilton’s request to see if counties support it.

The request for bonding authority would allow the watershed district to bond on its own to fund ditch improvements, rather than ask Jackson County to bond for them. Weber reportedly told those gathered at the Feb. 3 meeting he would not support the watershed district having bonding authority, and he doesn’t support the tax increase that would be required to increase the levy.

According to state statute, a watershed district levy is capped at .048% estimated market value or $250,000 — whichever is lower. HLWD Administrator Jan Voit said if the district was able to use estimated market value to determine its tax revenues, it would generate more than $951,000 in 2020 — considerably more than the $500,000 she’s asking for.

This is the second time the watershed district has sought to raise the $250,000 cap. Last year, it joined four other watershed districts around the state — under the umbrella of the Minnesota Association of Watershed Districts (MAWD) — in seeking special legislation to allow an increase. They hit opposition from legislators against any new tax.

Just one watershed district — Sauk River WD — has been granted special legislation to drop the cap, but in so doing had to accept a lower percentage rate of .01% of the estimated market value of land within the district, according to Emily Javens, MAWD executive director.

Watershed districts outside the seven-county Twin Cities metro area have worked under the levy cap since 2001, when it increased from $125,000, while metro watershed districts can generate more revenue based on their watershed management plans, Javens shared.

The tax impact

Individuals living within the Heron Lake Watershed District currently pay between $8.08 and $10.78 in tax annually to the watershed, based on a home value of $100,000. Landowners, meanwhile, pay between 37 cents and 44 cents per homesteaded acre, or 73 cents to 87 cents per non-homesteaded acre in taxes per year, depending on which county their land is in. These tax figures were provided by the auditor-treasurer’s offices in Jackson, Murray and Cottonwood counties; numbers from Nobles County were unavailable as of press time.

With the watershed district requesting to double its general operating levy, the tax to property owners would essentially double as well — to $16.16 to $21.56 per year on a home valued at $100,000, or a per-acre increase to 74 cents to $1.74, depending on homesteaded versus non-homesteaded land.

Why the requests?

In the last 14 years, Voit has had to downsize her office from four staff members to two. The $250,000 cap isn’t enough to fund both the staff needed to install conservation practices and meet match obligations for any potential grant dollars the watershed district secures.

“We used to do a monthly newsletter, have semi-annual education meetings — we just don’t have the resources to do it,” Voit said.

Between 1996 and 2020, the HLWD secured more than $8.7 million in grants — 75 grants in all. Voit said the grant money compares to nearly $4.9 million in taxes generated during that time frame.

Grants were secured to do several significant projects within the watershed, including the restoration of Fulda Lake, streambank restorations, cover crop initiatives and the installation of numerous best management practices.

These days, requests for ditch improvements within the district’s approximately 300,000-acre boundary are taking up more of HLWD’s time, with five different ditch projects needing $24.7 million in improvements.

Unlike in Nobles County, where the board of commissioners agreed to serve as the ditch authority because local watersheds don’t have the resources, the HLWD is the ditch authority for all projects within its boundaries. Voit said it's required by state statute 103D.625 to do so.

“We have been doing ditches for years and years, and every instance up until a year ago, Jackson County has bonded for these ditches,” Voit said. “Our issue is the county has to bond for us because we can’t. Right now, we have many improvement projects and Jackson County has taken the position that they won’t bond for us.”

Voit said she thinks it’s a “power thing” — that if Jackson County can get the watershed district to walk away, the county will take over bonding.

“They say they have the staff and the people already doing (the work),” she added.

Jackson County Coordinator Steven Duncan, meanwhile, said the county is jeopardizing its Double A bond rating by continuing to bond for ditch improvements in the HLWD at the current rate.

Jackson County, like other southern Minnesota counties, has aging infrastructure that needs to be repaired. County ditch systems and tile lines in many cases are a century old. Duncan said the county can’t afford to make all of the improvements at once.

“Our biggest problem is we’re a small county in population and we have about 100 drainage ditches,” Duncan said, noting that a quarter of them are within the HLWD boundaries. "Some of these projects in the Heron Lake Watershed District are $9 or $10 million."

Bonding for all of them could lead to a downgrade in the county’s bond rating, and therefore an increase in interest rates on bonds the county does secure, Duncan explained.

“We have other needs than bonding in the county,” he said.

So, where does that leave the HLWD?

Voit said she doesn’t think there’s any way for the watershed district to pursue a general operating levy increase or bonding authority if the counties don’t support either measure.

“Our legislators won’t support it if the counties don’t,” she said.

Turning the ditch systems over to the county for governance doesn’t seem to be an option, either.

“We want to make sure we get as many BMPs (best management practices) on the ground as we can,” Voit said. “We have been applying for EPA and Clean Water Fund grants, and we’ve gotten several of those. If we walk away from drainage authority, we would lose that money because it can’t be transferred to the county.”

The watershed district can bond for the ditch projects moving forward, but it would pay a higher interest rate and the district would be required to hire a bonding agent. Those added costs would ultimately get charged to the landowners.