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CLRSD budget will bump up property taxes

After a narrow approval by the Minnesota Pollution Control Agency and amidst continued controversy locally over its proposed sewage treatment plant, the Central Lakes Region Sanitary District has more than tripled its operating budget for next year.

At a meeting at Leaf Valley Town Hall Thursday, the CLRSD board adopted a final 2009 budget of $330,150 - a roughly 267 percent increase over its 2008 budget of $90,000.

The district will pay for the increase by raising taxes on property owners within its boundaries.

How much on average taxes will jump due to CLRSD is "almost impossible to calculate," said Tom Reddick, Douglas County auditor/treasurer, because of all the complexities within Minnesota's tax system.

Every property is different, he said, in terms of its classification, what tax credits it qualifies for and how it is effected by annual tax law changes, all of which factor into how much the owner has to pay.

Reddick said if you live in the district, the best way to estimate how much your taxes will increase is to look at your last year's tax statement and multiply the amount under "special taxing districts" by 2.67 (267 percent).

"That's basically what it would be," he said.

Jerry Haggenmiller, CLRSD board chairman, said although all phases of the district's proposed multimillion-dollar centralized sewer system have now been temporarily put on hold due to cost concerns, CLRSD board members approved next year's budget increase in order have the funds necessary should conditions be right for the project to move forward.

Currently, the U.S. Congress is mulling over a possible new multibillion-dollar stimulus package, which if enacted could be ready for President-elect Barack Obama to sign by his inauguration on January 20.

Jim Berard, communications director for the U.S. House of Representatives Transportation and Infrastructure Committee, said the bill could include up to $45 billion for ready-to-go public works projects, and at least $6.5 billion specifically for water treatment projects.

In a similarly modeled bill that stalled in the U.S. Senate in September, Berard said Minnesota would have been in line for $57 million for clean water infrastructure projects.

It is not yet known if the available money from a second stimulus package would be in the form of grants or loans.

Haggenmiller said CLRSD needs to have its project ready to bid should that money become available, and to do that board members had to pass a bigger budget for 2009.

"We wanted to position ourselves as best as possible by having a project that's ready to go," he said. "After so many months, if nothing comes in grant money, we won't be spending that much of the budget at all."

Terry Kuhlman, executive director of the Minnesota Public Facilities Authority, the state agency that would likely receive and delegate the federal funds, said odds are slim that the money in a second stimulus package would be grants instead of loans.

"There's maybe a 5 percent chance, a 10 percent chance [the money would be grants]," he said.

Kuhlman said the prospect of federal funding also doesn't completely compensate for the extremely high estimated cost of CLRSD's proposed treatment plant.

"If we could offer some grants with the loans [for public infrastructure projects], that'd be great," he said. "Whether it would be enough to make this project look affordable, is something else.

"I know [the PFA] would feel a lot more comfortable if this project was a lot cheaper cost per household."

Haggenmiller said even if no federal grant money shows up and the project can't move forward, CLRSD can use some of the added revenue next year to pay down bonds taken out previously.

Keith Baldwin, a representative for the Miltona-based anti-sewer group the Citizens League for Environmental and Economic Responsibility, said regardless of whether a second federal stimulus package passes, now is not the right time for CLRSD to be raising taxes and upping its budget.

Until other alternatives are fully explored for every phase of the proposed system, Baldwin said, the entire project should be halted.

"To us, going on hold doesn't mean increasing spending," he said. "The only holding that is taking place is that [the CLRSD board members] are holding on to the fact that they want this to go through."