Property tax levy, loan among options for entity

The Shell Rock River Watershed District could soon implement a property tax levy that was legally challenged this winter.

Officials on Tuesday discussed several options regarding the Watershed District’s $2 million loan request to Freeborn County. The district’s Board of Managers last week approved submitting the request to the county for assistance.

Watershed District attorney Matt Benda requested Freeborn County either sign a petition to allow the district to levy a property tax, allow for the loan request or allow the district to borrow money from county reserves.

District 1 Commissioner Glen Mathiason questioned the need for the district’s request based on its bonding ability.

“If they are capable, why would we want to do this almost convoluted way of going through us?” he said.

According to Mathiason, having the county bond would limit its authority to do so in the future.

“If they have the authority to do that, then we would rather have them bond,” he said.

Benda said though the district can bond, it does not have the property tax levy to support the bond.

Freeborn County Auditor-Treasurer Pat Martinson did not confirm the district’s $142,000 project tax levy and $50,000 survey data acquisition fund levy meant for water monitoring efforts due to legal concerns late last year.

Watershed officials could request up to a $166,000 project tax levy this year.

In requesting the levy last year, watershed officials said the levy was needed to bridge the gap between when the current sales tax is expected to expire in September and when the next sales tax could be implemented at the beginning of 2018.

District officials are looking to renew their sales tax for either 15 years or until $15 million has been collected. Local testimony on the sales tax is expected this week at the Capitol.

Benda said he is not interested in rehashing differing legal opinions that led to the proposed levy’s rejection.

“We are looking for a solution,” he said.

According to Benda, Freeborn County lending money to the district is an economic development opportunity. Freeborn County has bonded to fund other capital improvement projects, Benda said.

“If you had a business come (to) you and say, ‘we need a $2 million loan so we can spend $15 million in the community, it would be very similar to that kind of economic development opportunity,” he said. “So it’s using your loan capacity, which you do frequently with other businesses and other opportunities.”

Officials said the loan would provide funding security for the first phase of the dredging project that will remove 550,000 to 690,000 cubic yards of sediment from Edgewater Bay.

District Administrator Brett Behnke said the district plans to pay off the loan either with its levy authority as defined by state statutes or with sales tax funds.

The district is requesting the sales tax be extended for either 15 years or until $15 million has been collected and is awaiting legislative approval.

Construction on phase one of the project is expected this spring. The site is expected to be dredge-ready by mid-August.

According to Benda, the district’s purchased dredge could either be used exclusively or in conjunction with another dredge, depending on requests for proposals the district receives.

The first phase of the project is expected to take two to three seasons, Benda said.

Watershed manager Mick Delger, who attended the meeting, said the district was requesting the county’s support for the project.

“Doing it this way is one way that works,” he said. “For you to petition to us so we can do the levy. We are trying to look for all of our options, and this is a good one. We have a project to do. The government has put us in the position to clean up the water, and you guys appointed us to do a job, and that is what we are trying to do.”

District 2 Commissioner Dan Belshan questioned whether the district has soundly used open meeting laws. According to Belshan, any initial county funding should not come from areas outside of the Watershed District’s jurisdiction.

Mathiason said he expected Belshan to express opposition during the process, adding that commissioners would have to work around his opposition to find a good solution.

Belshan said he respectfully disagreed and was only asking questions.

After the meeting, commissioners said they would listen to advice from the county’s counsel, attorney John Kolb of St. Cloud-based law firm Rinke Noonan, before reaching a final decision on the request.