The Freeborn County Board ruled out a public referendum to approve financing the courthouse project Tuesday. Farmers and seniors filled the meeting room and said they were outraged, calling the decision unfair and undemocratic.

The commissioners voted 3-2 for the county to go with a combination of jail bonds, law-enforcement center bonds and lease-revenue bonds, all of which do not require a referendum.

The decision affects residents in the rural area and city in different ways.

For a farmer who possesses agricultural land valued at $300,000 and a $100,000 home, no referendum means an annual tax increase of around $380. They would have paid less if a referendum were held, because state laws exempt agricultural land from taxation and apply a flat rate to agricultural homesteads when the taxation derives from the kind of bonding that allows a referendum.

On the other hand, a residential homestead owner with a home worth $100,000 would save about $80 since the tax burden is spread over all types of property with the non-referendum bonds.

&uot;The decision will leave the taxpayers alive or dead,&uot; said Hayward farmer Marlowe Wangen.

Soybean and corn producer Brad Nelson questioned the fairness of the decision that would affect farmers disproportionately. And Gary Hareid, a farmer in Emmons, said having no referendum is not the democratic way.

But, Commissioner Dan Springborg, who entered the motion, rebuffed the claims by rural residents. &uot;It’s not fair not to tax farmland and tax where I work,&uot; said Springborg, who represents mostly city-based constituents.

He emphasized that it is not only farmers that are living on tight budget, and that fairness should mean to share the burden equally.

Another issue raised by the audience was a concern about the impact on the fiscal soundness of the county government by the $25 million bonding.

Warren Stowell, a member of the group that had tried to save the 1954 courthouse annex, advocated a referendum so that the project would be revised comprehensively, sparing the ’54 building. &uot;I think we can cut the cost at least the half,&uot; he insisted. Commissioners have voted to tear down the northernmost part of the courthouse and replace it with new space added to the judicial center.

However, Myron Knutson, Senior Vice President of Evenson Dodge, explained that the overall debt limitation for the county government is 2 percent of the $1.7 billion net market value of taxable properties, which is $34 million. Annual installments for the jail bond and LEC bond are restricted to 0.09671 percent and 0.1 percent of the net market value, respectively, and the projected payments are below the limits, he said.

&uot;Certainly, the impact on the financial status of county by this financing is very low,&uot; Knutson said.

Knutson presented his estimates of bonding amount. According to it, jail bonds will amount to about $9.1 million, LEC bonds will equal $7.5 million and the county will issue about $8 million in lease-revenue bonds &045; the controversial &uot;non-referendum&uot; bonds.

The interest rate is lowest for the jail bonds. The lease-revenue bonds, which are issued through the Housing Redevelopment Authority, have a 0.25 percent higher rate. The interest rate of the LEC bonds is in between the two.

The annual installment for these three different types of 20-year bonds combined will be $2,050,819, which is $16,800 more than the payments for the option with a referendum. But, County Administrator Ron Gabrielsen pointed out that conducting a referendum would cost at least $55,000.

Commissioners Glen Mathiason and Dan Belshan cast negative votes.

Mathiason, a farmer in Alden, stated his position is not to allow referendum in which the public often votes blindly. But he said it was too early to make a decision, and asked other board members to allow more time to digest the data presented by the bonding firm.

Belshan, who represents the eastern half of rural Freeborn County, stressed that the board should not take a vote on the issue because he said it was not announced to the public on agenda. He entered a motion to table the subject, but failed to get a second.

Truman Thrond, former county administrator and candidate for commissioner, supported Belshan’s position and said, &uot;I did not expect that the board was taking the vote today.&uot;

&uot;I think the people should have a chance to vote. I am very disappointed. This is a huge expenditure. The people want to be heard, and the people must be heard because they are so full of good ideas,&uot; he said.

The commissioners gathered as the Housing Redevelopment Authority board later on Tuesday. There, they took a vote to approve the decision of the county board and move forward and issued the lease-revenue bond.

Belshan also criticized that vote, saying it too wasn’t put on agenda. Mathiason also opposed rushing to the decision without having concrete figures about the bonding amount.

Commissioner Chair Dave Mullenbach said that the discussion on the bonding amount would be on the agenda for next board meeting, scheduled on Tuesday.

THE DETAILS:

Type of bonds

Bonding options proposed by Evenson Dodge (bond rating in parentheses) for financing of Freeborn County courthouse project. Taxes payable beginning in 2003.

– General obligation bonds for jail (Aa1): $9,135,000

– Lease bonds for LEC (A2): $7,480,000

– Lease-revenue bonds for courthouse (A3): $8,020,000

Total: $24,635,000

Paying them off

– Annual installment: $2,050,819. Maturity: 20 years

– Tax impact: Spread across the county’s net tax capacity. Subject to changes in market price and net capacity. Property values, followed by estimated annual tax increase.

Residential homestead: $25,000,$31; $200,000,$247

Agricultural homestead: $50,000,$62; $400,000,$299

Ag non-homestead: $50,000,$62; $400,000,$494

Commercial and Industrial: $50,000,$93; $400,000,$895