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Iron County board approves borrowing $1.27 million for placement costs


August 1, 2018


Hurley — While the supervisors may not have been happy about it, the Iron County Board of Supervisors approved borrowing over $1.2 million Tuesday to cover the county’s 2017 placement costs.

This is the second year the board has decided to borrow money to fund the county’s costs for court-ordered placements — a move that allows the county to exceed the state-imposed levy limit and pass at least a portion of the burden onto the county’s taxpayers.

The placements occur for a variety of reasons, but generally deal with drug and alcohol offenses and can include defendants being sentenced to treatment facilities rather than prison.

The $1,271,602 loan from Chippewa Valley Bank approved Tuesday is based on the costs for 2017, just as the $844,741 borrowed from the bank last year was to cover the 2016 costs.

Last year was the first year Iron County borrowed money for placements costs, choosing previously to tap into the county’s general fund and revenue from logging the county forest. However, the costs have jumped significantly in recent years, according to Iron County Clerk Michael Saari, and using stumpage revenue is no longer a viable option.

“If you do not borrow it, and you don’t put it over the levy cap; you’re going to steal it out of your general fund,” Saari said. “How long do you think our general fund can put up with a $1.3 million hit?”

While the increase in the amount borrowed means taxes for Iron County residents will increase again, Saari said after the meeting it won’t be as drastic as last year’s increase as roughly two-thirds of the amount being borrowed was borrowed last year as well.

At least one board member suggested putting the issue on the ballot to let the voters decide, but Saari argued the money had already been spent and the revenue needed to come from somewhere. He said asking the voters would be largely symbolic, as the county couldn’t afford to absorb the costs in the event of a failed referendum.

“You want to ask them, and then you’re going to do it anyway? That’s a poor way to do business,” Saari said. “Because … if you hold a referendum, I’ll bet you they say no and we have already paid this money out. If we don’t borrow it, we’re going to go bankrupt.”

There was a general consensus the state needed to get involved in what is a statewide — if not nationwide — problem, with Saari saying other counties are dealing with much larger bills for placements than Iron County.

There was a brief discussion about the possibility of including a letter in the tax bill explaining why the money was being borrowed, as part of an effort to make residents aware of the need to change the system.

Saari said he would like to see a line added to the state’s levy sheet for the costs, so the county could at least avoid paying interest on the borrowed money.

The county will pay 3.25 percent interest on the $1.27 million, and is paying 2.95 percent interest on the $844,741 borrowed in 2017. Saari argued the county’s interest payments could be better used for other purchases, comparing them to new vehicles for the sheriff’s department.

“We spent $25,000 interest on the ($844,741) we’re going to pay back in September. That’s a squad car,” Saari said. “This year, at the ($1,271,602) and interest rates have probably creeped up a little bit, it’s probably going to be closer to $40,000. That’s a brand new Yukon.”

In other action:

—The board voted 12-1 to allow supervisors Larry Youngs and Karl Krall to remain on the county’s highway committee, despite them being employees of a company that sometimes bids on county road work. While it wasn’t included in the motion, there seemed to be a general consensus it would be good for the two to abstain from participating in decisions on projects their company could become involved in to avoid the potential appearance of any conflict of interest. Brad Matson voted against the motion, while Youngs voted present. John Sendra was absent from the meeting.

—The board approved amending the contract with Foth Engineering regarding the company’s involvement in rebuilding Saxon Harbor after it was destroyed in the 2016 storm. The amendment pays the company no more than $192,436 to be on-site at the harbor to administer the county’s dredging contract to make sure the designs are being followed and issues don’t arise.

—The board approved a resolution supporting telecommuting opportunities in the county.

—There was a brief discussion of the potential creation of a motorized trail through a portion of the Turtle Flambeau Flowage Scenic Waters Area, with the board agreeing the process was still primarily being handled at the state level and they would monitor it and take action if appropriate in the future.

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