WORTHINGTON — Seven months after setting one of the lowest tax levy increases in recent years, at 1.08%, Nobles County commissioners heard Wednesday that the county’s budget is “looking pretty rough right now,” according to board chairman Gene Metz, and that a double-digit levy increase is possible. Any levy increase correlates to increased property taxes.
The most pressing issue Metz said the budget committee is facing is the insurance contribution the county provides for its employees. A recent survey of area and like-sized counties showed Nobles County provides the lowest contribution toward employee health insurance.
Human Resources Director Sue Luing recently told the budget committee the primary reason county employees are leaving their positions — and why potential hires are choosing not to work for Nobles County — is because of its low contribution toward employee health insurance.
“Insurance contributions will need to be looked at,” Metz said.
“Turnover of employees costs a lot of money too,” shared Commissioner Don Linssen, who also serves on the budget committee. “Productivity, training — we’re spending money that isn’t being addressed.”
While Linssen said increasing the employer contribution for health insurance is “going to be an expensive ordeal, it’s something we need to do.”
In addition to insurance, Metz said the board will be considering a request for additional staffing. One new full-time employee creates a 3% increase in the levy, he noted.
“There’s potential reserves we can pull from, but you don’t want to rob Peter to pay Paul either,” he added.
Metz said the budget committee is in the 10% to 11% levy increase at this time, and said that would probably be the worst-case scenario, based on expenses. What may help the county is new revenue from properties constructed under the Nobles Home Initiative five years ago that are now coming onto the county’s tax roll. Metz said wind energy production tax could also provide a short-term boost to bridge the gap.
Metz and Linssen requested feedback from fellow commissioners during Wednesday’s meeting to get a sense for how to move forward in the budget process.
Commissioner Bob Demuth Jr. said he doesn’t want to keep the levy so low that it strains the budget and they would be forced to set a 15% tax levy increase next year.
“I think we’ve got to be at 6%,” he said. “We were low last year and now we’re going to pay for it.”
Metz said a 6% increase would not provide additional health insurance contributions for employees.
Commissioner Justin Ahlers said he wants to see what the additional staffing request is for before he offers a targeted levy increase.
“I’m a firm believer we have to take care of the staff we have,” he said. “I want to get our turnover rate down before we add additional positions.”
Commissioner Bob Paplow said he does support more staff where it is needed, but suggested the county get through everything with COVID first and consider those additions next year.
The county must set its preliminary levy by Sept. 30. Once set, they can whittle down the levy amount, but they cannot increase it.
In other business, commissioners:
Met with Nobles County Fair Association board members Corey Gronewold and Ron McCarvel regarding an appropriations request. As the county begins work on its 2022 budget, the fair board asked for a $35,000 appropriation to help offset its expenses for next year.
McCarvel said the racing season is going really well this year, averaging more than 500 paid admissions to watch 70-plus cars compete in the weekly races.
He also spoke of recent upgrades to buildings, such as new doors and new roofs.
“The fairgrounds was built in the 1950s (on the north end), and the cattle barns in the 1960s,” McCarvel said. “We’re running into repairs with doors and roofs.”
Among the next projects on their list are a new roof on the sheep barn and increased electrical service to the horse barn.
The fair association has received a $25,000 annual appropriation from Nobles County in recent years, and McCarvel said they would like a $10,000 increase in that contribution.
He noted increasing use of the grounds by a variety of entities, and a desire to have the facilities in better condition. Just in the past few months, the Minnesota Angus Show, Minnesota Holstein Show, Minnesota State Cattlemen’s Summer Beef Tour, Nobles County Pheasants Forever drive-thru banquet, and King Turkey Day BBQ Cook-Off used the grounds and some of its facilities.
McCarvel said fair board members are all volunteers, and the grounds are maintained with volunteer labor.
Demuth said he finds extreme value in the fairgrounds, but said it would be an “easier sell” to his constituents if it was going to be a special one-year increase of $10,000, and not each year moving forward.
Ahlers, meanwhile, said the county needs to invest in its infrastructure, just as it has with the Prairie Justice Center, Government Center and the public works shop in Adrian.
McCarvel said the fair board applies for grants each year, and has had some success because it is a nonprofit ag society.
Briefly discussed the $4,201,180 federal allocation to Nobles County in the latest round of economic recovery funding due to the COVID-19 pandemic. The money, half of which was already received, is provided through the American Rescue Plan Act.
There are rules on how the money can be spent, but Heitkamp said larger projects such as broadband and sewer infrastructure will qualify for funding.
Cities and townships will also receive ARPA funds, though their allotment will come from the state of Minnesota.
Metz suggested the county meet with cities and townships at an upcoming Nobles Economic Opportunities Network (NEON) meeting to discuss potential in collaborating on specific projects.
Received a recap from County Administrator Bruce Heitkamp on the recently demolished house in Adrian. The county spent $42,000 to raze the house, clean the property and prepare it for redevelopment. Of that, the city of Adrian committed $5,000, leaving the county with a $37,000 bill.
Heitkamp sought direction from commissioners on the next step, which is to get the lot sold. He suggested doing a sealed bid process for the property, and said he’s received some calls already from interested individuals.
Commissioners agreed with the plan, and are expected to take formal action on moving forward with parameters for the sale at Tuesday’s regularly scheduled board meeting.