Keweenaw County Commissioners approve tight 2001 budget; voters' millage veto limits revenues EAGLE RIVER ’Äì While Keweenaw County’Äôs budget for 2001 is not operating in the red, its fund balance of $184,514, projected for the end of next year, is leaner than desired. The one-mill proposed increase, rejected by county voters by a vote of 673 to 628 on Nov. 7, could have allayed some fears caused by a shortfall of $44, 242 in this year’Äôs net revenues. After a public hearing without public comment on Dec. 12, the Keweenaw County Board of Commissioners unanimously approved the proposed 2001 county budget with some transfers from the general fund, which included creating a separate Construction Codes Fund and budgeting $1,000 for apportionment according to the 2000 census. Jane Pelto, Keweenaw County equalization director, said the one-mill increase would have added $62, 833 to the county’Äôs operating budget each year for four years. Eagle Harbor Township Supervisor Jim Boggio said residents may not have understood how much that millage increase could help the county or how it was to be used. "Millage is never voted in unless you go out and tell people," Boggio said. "The name of the game is communicate ’Ķ People will spend money if it’Äôs for a good cause." Boggio gave as an example the recent millage increase of 1.1443 mills that Eagle Harbor township residents approved for purchase of a new fire truck. "(That increase) went in ’Ķ in a big way, and that’Äôs because people wanted better fire protection," he explained. "It’Äôs a concern people have, and they don’Äôt mind paying for it." In honor of his Scottish ancestors, newly elected Keweenaw County Commissioner Don Keith wore the Keith Clan Tartan for taking his oath of office on Dec. 12 in the Courthouse in Eagle River. New Commissioner Eric Bjorn (not pictured) also took the oath of office. Keith and Bjorn will begin their duties Jan. 1, 2001. Newly elected County Commissioner Don Keith, who took his oath of office on Dec. 12, agreed with Boggio that public officials need to justify a millage request so that people understand the need and how the money will be spent. He said he had voted for the millage increase. "I am knowledgeable and aware of what the budget figures are, and I support it," Keith said. "It’Äôs a very close budget." Keweenaw County Sheriff Ron Lahti Keweenaw County Sheriff Ron Lahti said the county’Äôs proposed one-mill increase was to fill in a gap until other revenue sources start to pick up in order to stop a downhill slide. "That one mill for four years would have kept the county on an even keel," Lahti said. "The demand for services is going up, and revenues haven’Äôt gone up at the same pace. That’Äôs where the county board is running into difficulty ’ĶYou have to have something you can rely on for emergency services." Lahti said he couldn’Äôt predict how the Mt. Bohemia Ski Hill will affect law enforcement costs. "I don’Äôt know if it will affect the cost as much as the workload," he said. "There’Äôs no way to know what that workload is going to be until we go through a season or two to see how it’Äôs going to play out ’Äì what kind of traffic problems we’Äôll have." Pelto said this year Mt. Bohemia personal property tax will probably be limited to equipment, while the ski lifts will bring in revenue for 2001. The yurts ’Äì to be used as a temporary cafeteria, First Aid station and lodge ’Äì might be taxed as personal property, she added. "Any of the taxing units will benefit from the building permits for Mt. Bohemia because new construction can be taxed right away," Pelto said. The amount received in the form of taxes and penalties for withdrawing land formerly in CFR (Commercial Forest) to build the ski hill is included in the year 2000 budget revenues and is divided among all the taxing units, based on individual millage rates, Pelto explained. Matt Arko, assessor for Grant, Houghton and Eagle Harbor townships, spoke at an Eagle Harbor Township meeting early this fall. Matt Arko, assessor for Grant, Houghton and Eagle Harbor townships, said the county needs either a higher millage rate with a lower tax base or a lower millage rate with a higher tax base. "You’Äôve got to have something that produces revenue," Arko said. "Grant Township probably has ’Äì if not the lowest ’Äì one of the lowest millage rates in the State of Michigan (because of the Copper Harbor School)* ’Ķ Keweenaw County’Äôs millage rate is one of the lowest rates in the area, too." Despite their low millage rate, Grant Township residents voted against the one-mill increase with a vote of 84 to 77. Allouez Township voters defeated the increase with the greatest number of votes, with 441 voting against it and 379 for it. Three townships voted for the proposal to increase the millage: Eagle Harbor, 112 to 96; Sherman, 21 to 14; and Houghton, 39 to 38. County residents in all five townships pay a little over 6 mills a year for the county’Äôs operating budget. One mill is $1 for every $1,000 of taxable property value. If the taxable value of a $50,000 home is $25,000, that increase of one mill could be as low as $25 for the year or a little over $2 a month. Arko explained that Proposal A limits the increase in taxable value of property to the rate of inflation, if that property was purchased before 1994. Thus, only the new people moving into the county and purchasing homes will pay higher taxes to support the county, which, he agrees, has no fat in its budget. He said existing residents’Äô fears of rising taxes are unfounded since each year the millage rate will go down because of inflation (unless residents vote to raise it). "Last year there was a 1.6 percent increase (based on inflation) in property tax," Arko said. "That’Äôs not very much ’Ķ It’Äôs kind of a Catch-22. Your costs are rising faster than the amount you can take in." Arko noted, because of Proposal A, one neighbor can pay ten times what another with identical property pays in taxes because of the time they bought it. New people also mean new services mandated by law. "It’Äôs everybody’Äôs call," he said. "These services are going to be paid for. How do you want to pay for them ’Ķ It’Äôs the people in Keweenaw County that should decide what’Äôs best for them. Until you live here you don’Äôt know what they need. This is a unique community." The Keweenaw County Board of Commissioners unanimously approved the proposed 2001 county budget on Dec. 12 after a few adjustments. One of these involved a Construction Codes Fund of $1,030, which had to be separated from the general fund because of a state law, which says a county government may not make a profit from permit revenues. In addition, the board approved transferring $10,000 from the general fund under the 2000 budget to the separate Construction Codes fund. Clerk Marilyn Winquist said she thought the separate fund was a good idea in order to keep track of the permit revenues as well as conform to the law. "When we went through and totaled up the permits from 1992 through 1999, we found that we were losing money. It means we weren’Äôt charging enough for the permits," Winquist said. She added the county hasn’Äôt yet raised permit costs but they (the County Board of Commissioners) may be looking at such increases. In a discussion during their Dec. 12 meeting, county commissioners noted such an increase should benefit the county rather than be shared equally with Northern Consultants, who issue the permits and inspect buildings. At present Northern Consultants receive 85 percent of the permit revenues while the county receives 15 percent. Some examples of present permit fees are: $175 base fee for single and multiple family residences plus $0.20 per square foot of living space over 1,400 square feet, $0.05 per square foot for basement and $0.10 per square foot for attached garages; $60 base fee for commercial construction plus costs for improvement, such as $35 for improvement up to $1,000 or $35 plus $10 per $1,000 over $1,000 up to $10,000. Permit costs increase in relation to the amount of improvement. For improvement greater than $500,000, the fee is $905 plus $3 per $1000 over $500,000. Commissioner Jeff Turnquist suggested the cost of mileage for building in Keweenaw County could be one justification for increasing building permit fees. "It’Äôs been a known fact that it costs more to build up here in Keweenaw," he said. Northern Consultants President Ray Gerhart said the county’Äôs 15 percent basically pays their clerical fees, while the 85 percent pays Northern Consultants’Äô fees for administration, building inspection, consultation with clients and reviewing the zoning of permits. "There’Äôs a lot to go through, especially in a rural area like Keweenaw County," Gerhart said. "Most of our permit applications (concern) septic systems and private wells. Sometimes (the applicant) will need a permit for wetlands or a permit to build on critical dunes and high-risk erosion areas ’Ķ All those permits have to be in place prior to us granting a building permit." Other changes in the proposed budget for 2001 included a $200 increase (from $2,700 to $2,900) for the District Court stenographer and a $200 increase for the Prosecuting Attorney’Äôs secretary (to equal $3,200). Since re-apportionment of the voting districts will be required by the 2000 census changes, an amount of $1,000 was transferred from the general fund to cover travel costs for the apportionment committee. The committee is to include the Prosecuting Attorney, the County Clerk, the County Treasurer and the Chairpersons of the Republican and the Democratic parties. The estimated total expenditures for the year 2000 total $862,263 and the estimated total revenue and other sources of income for 2000 are $816,500. That left an estimated operating deficit of $45,763. That amount subtracted from the Dec. 31, 1999, actual fund balance of $274,519 left $228,756 in the fund balance. According to the recommended 2001 budget, total revenue and other sources are $886,479, while total expenditures come to $930,721, leaving a deficit of $44,242. That amount subtracted from the present fund balance of $228,756 leaves a projected fund balance of $184, 514 for the end of 2001. Mohawk resident Scott Laurie said audits of the county budget show that several of the budgets were overspent. "Each department should go to the County Commissioners or the clerk to seek more funds (for their department) when they have a budget shortfall," Laurie said. As an example, he noted, former commissioners’Äô and employees’Äô health benefits have not been paid, and auditors have recommended the county do something about it. "I think there needs to be more financial oversight by the county commissioners," Laurie said. "I’Äôve been involved with many audits in my previous position, and not once did the auditors find the same problem in successive years. You get recommendations, and you’Äôre supposed to take care of them." In other business the board: After hearing comments from Commissioner Gordon Roberts, approved concurring with an Ottawa County resolution opposing the privatization of community-based mental health services and the existing system of funding substance abuse treatment services and reaffirming the Michigan Mental Health Code and those portions of the Michigan Public Health Code which provide for local, rather than bureaucratic, selection of behavioral health systems. In addition to the transfer of $10,000 from the General Fund Budget to the Construction Codes Fund (as mentioned above), approved amending the General Fund budget to increase prisoner lodging revenue $2,500 and increase jail expense $2,500, increase audit cost $3,140 and pay the approved and audited bills with the exception of Northern Consultants: General Fund $69,108.63, Building Improvement Fund $5,400 and Construction Codes Fund $719.19. Approved signing the Substance Abuse Employee Assistance Program Agreement with the Western Upper Peninsula Substance Abuse Coordinating Agency. Authorized Clerk Marilyn Winquist, Treasurer Geri Hall and newly elected Commissioner Donald Keith to attend a Commissioners Workshop on Tuesday, Dec. 19, in Marquette. *Editor’Äôs note: Since the Copper Harbor School is an out-of-formula, K-8 school, Grant Township residents pay less school millage than residents in the other four Keweenaw County townships. For example, they pay 4.4735 mills for school operation while Eagle Harbor, Allouez and Houghton Township taxpayers pay 17.8830 mills for the Calumet-Laurium-Keweenaw School District’Äôs operation plus 7 mills for school debt. Sherman Township residents pay 18 mills for the Lake Linden-Hubbell School District plus 7 mills for school debt. All townships equally support the Copper Country Intermediate School District with 0.3809 mills for operating and 1.8116 for Special Education. -Michele Anderson December 18, 2000 Keweenaw Today welcomes readers' comments on the budget or on this article. Click here for the commentary board and let us know what you think.