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Crookston Times - Crookston, MN
  • The County Line: Polk County’s finances have come a long way

  • Polk County is financially sound and it has been that way now for the past decade or more.
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  •     Polk County is financially sound and it has been that way now for the past decade or more.   
        The county’s infrastructure is in good shape, too, headlined by the new jail and the justice center complex that was put into use in 2008 and also by the recently remodeled Polk County Law Enforcement Center. These facilities should serve the county for the next 30 to 40 years, maybe longer. The county’s other buildings and the county road system, too, are being well maintained. In short, things are going pretty well; we’re pretty well set for the years ahead.    
        But it hasn’t always been that way.   
        Things were different back in 1997 and 1998. The devastating flood of 1997 had wiped out more than 600 homes and other properties in East Grand Forks along with a number more that flooded out up and down the Red River… all the way from Nielsville to Oslo.
    Out of money   
        This not only put a big dent in the county’s tax base but it came at a time when the county’s General Fund was already was already in sorry shape. You could say that the county was on the verge of being broke. There were times in those years when the County Board would have to borrow from the Social Services Fund to keep things going until the next round of tax collections came in. When those taxes came in, the loan would be repaid. But a few months later, borrowing would be needed again.   
        I have an old financial report that shows a $22,000 balance in the General Fund in December 1997.  Following a round of tax collections, December has one of the highest fund balances in the year.   
        For perspective, this was at the same time as when the county was levying $9.8 million a year to finance its business. If divided by 12, this would mean that about $800,000 a month was needed just to pay the bills...and $22,000 wasn’t close to that.
    Recovery came   
        Over the years since then, the county has been able to recover, initially by capitalizing on new construction activity that was rebuilding the tax base. The replacement housing in East Grand Forks — where some 700 new homes were built in the first few years of recovery — came with valuations about double that of the homes that were lost.    
        Then with some good prices on the farm in more recent years, farmers not only did their share of building but they also started paying big prices to for land. Those higher land prices have blown the valuation of tillable ag land right out of the water.        
    Page 2 of 3 -     The combination of all of this has resulted in a total valuation of property in the county this year that topped $5.23 billion … and that’s without the pipeline, railroad and utility valuations being added in. In case you wondered, that really is $5.23 billion… for emphasis, make it billion with a capital B.
                      
    Put money away   
        As recovery of the financial situation was underway, the county was not only able to rebuild the General Fund balance but also to prepare for a major building project that was looming as the old Pro Building was in its final years and the need for more jail space was becoming critical.    
        With funds that had been accumulated to address those needs, the county was able to apply cash — more than $8.3 million — for the construction of the Polk County Justice Center portion of the complex that also includes the 200-bed Northwest Regional Corrections Center jail. The Justice Center houses the entire court system along with the administrative offices and probation department of Tri-County Corrections.   
        The $17.5 million in bonds that were sold in 2006 to construct the jail portion of that complex will be refinanced later this year or early in 2015 to take advantage of lower interest costs. This is expected to save about $1.4 million in interest over the final 12 years of the repayment period.
                        
    Making money   
        The jail, which opened in 2008, is now earning about $1 million a year in new revenue by housing prisoners for other county, state and federal corrections agencies that are short on beds.    
        In addition to the $8.3 million that was used to pay for the Justice Center, the county is in the final stages of a $2.3 million remodeling project at the Law Enforcement Center. This work, in addition to a major updating of the heating and cooling system and replacement of the roof, is converting the old jail cells into useable space for the Sheriff’s Office, a new Dispatch Center, and quarters for the county’s Information Services department. This work is being paid for from existing funds and, like the Justice Center, will not have a tax consequence.   
        There is more to this story, of course, but to summarize, let’s just say that things have been going pretty well. While not everything is perfect and there will be bumps in the road ahead, there is reason to feel good about how the county has rebounded from some very difficult times.    
    Page 3 of 3 -     And at the same time, the county’s focus going forward is to keep its infrastructure in good shape and to have enough of a cash at hand to keep things going if things take a dive in the future.   
        Thoughts expressed in this column are those of the author and are not necessarily a reflection of the opinions of the other members of the Polk County Board of Commissioners.

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