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Local taxpayers pick up what feds, state don't pay

By Jeffrey Pieters

jpieters@postbulletin.com

A healthy and growing property tax base is Olmsted County's best friend as it prepares its 2006 budget.

Federal and state contributions for mandated activities in human services and corrections have not kept pace with program expenses, and today, they amount to less than one-third of the county's proposed $162.2 million budget, county commissioners were told Monday at the start of a four-day budget review.

Local property-tax payers are picking up the slack. Their share of the load has risen to about 38 percent, or $61.2 million, under the county's spending proposal.

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The county will hear from citizens at a Truth-in-Taxation hearing at 7 p.m. Thursday, and then vote to adopt a budget Dec. 20.

That shift to local funding corresponds with an apparent boom period in the county's real estate market. More than $1 billion was added to tax rolls in the past year -- $400 million of it from new construction -- and the county's tax base now reaches about $11.2 billion.

Depending on the area, some taxpayers have seen double-digit increases on their proposed tax bills, mailed last week. Residential properties in Rochester and Chatfield, apartments and farmland were especially hard-hit.

In other areas, including Dover, Eyota, Oronoco and Stewartville, residents generally will foresee their taxes as flat or slightly decreased for the coming year, according to county records.

Annual budget review

Even in four days, a thorough review of every cranny of Olmsted County's budget is a tough task. Commissioners are reviewing only those areas where substantial changes are proposed, and allowing an underlying flat-line spending blueprint -- essentially the 2005 budget plus increased personnel costs and inflation -- to pass without deeper examination.

On Monday, commissioners heard budget presentations from public works, the sheriff's department, the jail, the attorney's office, community corrections, waste management and emergency management, among others.

Today, they'll hear from community services, public health, planning and a handful of outside agencies. The day-long hearing was set to begin at 8:30 a.m. in a conference room adjacent to the chambers at the city-county Government Center where the board holds its regular meetings.

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On Wednesday, board members will hash out their differences and come to a consensus on the budget they'll present to taxpayers at the hearing Thursday night.

Among the highlights in Monday's discussion:

After cutting staff by the equivalent of 67.7 full-time positions in 2003 and 2004, the county added back 34 jobs last year and plans to add back nearly 12 (11.8 full-time equivalents) in 2006. It would remain about 22 positions (21.82 FTEs) short of past levels.

• The; preliminary levy would rise 8.5 percent as proposed. With $650,000 of that dedicated to a one-time project, a new interchange on U.S. 52 near Oronoco, the remaining levy increase amounts to about 7.4 percent. That, by itself, is not enough to balance the proposed budget, so the county will have to dip into reserves. The county will consider borrowing money to maintain reserves and preserve its AAA bond rating, said Finance Director Bob Bendzick.

Recent media attention to the county's underpaying its share for the Rochester Public Library by $286,000 drew perhaps a half-dozen sideways comments from commissioners, who considered criticism unjustified, since several higher-level programs in recent years also felt the ax. Sheriff Steve Borchardt, whose department remains several positions short, hit the issue head-on. "I think the sheriff's department needs to be made whole before the library," he said.

Despite the overall levy increase, the county's average tax rate will be at a 23-year low next year. The rate, $5.47 per $1,000 of assessed property value, is down 16 cents from last year. It will be the second straight year the county tax rate is below $6.

General state aid under the Homestead and Agricultural Credit Aid program will rise just 1.2 percent next year. "Just another example of the state not keeping up with what they should be doing," said Bendzick.

An $81 million project to add a third waste-burner at the Olmsted Waste-to-Energy facility will be the county's largest public works project for the next several years. The board will be asked Thursday to approve a $4.24 million contract with an engineering firm to oversee the project, tentatively planned to start construction in 2007, opening by May 2009.

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An extension of 55th Street Northwest between West River Road and U.S. 63 North will be the county's first major project using funds from the recently approved Rochester sales tax extension. Planning for the $6 million project would start next year, with construction slated for 2007 and 2008.

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