Iron County board approves placement loan

By RICHARD JENKINS

[email protected]

Hurley — It may be little consolation to the fact Iron County has to borrow close to $1 million, but the loan the Iron County Board of Supervisors approved Tuesday is for less money than what was borrowed last year.

The board voted to borrow $947,583 from Chippewa Valley Bank to cover placement costs the county incurred in 2018.

“That’s about $300,000 less than last year,” Clerk Michael Saari said.

Placement costs relate to a variety of services, but generally cover residents being sent to facilities around the state for various types of treatment, and they are often court-ordered.

At a recent human services meeting, county officials said drugs and alcohol are usually an underlying factor in the placements.

The board voted to borrow $1,271,602 in 2018 to cover the previous year’s placement costs. In 2017, the board approved spending $844,741 for 2016’s costs.

The county had $420,704 in adult placement costs and $548,268 in youth costs in 2018 — with $21,389 in youth costs refunded from Social Security, according to information given to the board.

Although the county traditionally covered these placements with its general fund and money generated from its two annual timber sales, rising costs in recent years made that option untenable.

Starting in 2017, the board began borrowing the money based on the previous year’s costs, allowing the county to pass on at least some of the burden to taxpayers by applying the loan over the state-imposed levy cap.

Saari previously told the Daily Globe state law limits how much tax money the county can use each year, but loans are allowed to be applied over the levy cap provided more than a simple majority of the county board approves it.

During Tuesday’s meeting, Saari said the vote was something of a formality, as the money has already been spent and the county can’t absorb the cost without taking the loan.

“This is kind of a unique situation — borrowing money for placements — but it’s what we have to do,” Saari said.

The county will pay the same 3.25% interest rate on the loan as last year. The current prime interest rate is over 5%, according to information given to the board.

“I was happy to see it’s the same interest rate, I think that was a nice gesture on their part,” Saari said.

Last year, the county spent over $41,000 on interest payments for the $1.27 million loan.

Although taxpayers will be paying for the loan, Saari said the recent payment of a bond and the lower amount of this year’s loan means the county should be looking for less than last year.

“We also got rid of the retirement bonds — that’s a $70,000 principal payment. … so it’s over $350,000 less,” he said. He conceded some of that is cancelled out by the loan the county has to cover costs of rebuilding Saxon Harbor while the county waits for reimbursement from the federal and state governments. Interest on that loan is up to $13,000 a month, Saari said.

In a separate motion later in the meeting, the board approved sending a resolution to Madison seeking the elimination of the 0% levy cap.

The resolution targets a 2012 law that limits how much a local municipality can levy in taxes each year, according to the text of the resolution.

According to the resolution, the state law limits the tax year to, “No more than the greater of 0% of last year’s actual levy or a percentage equal to the percentage change in equalized value due to new construction less improvements removed.”

The hope is that all 72 counties will pass a resolution opposing the cap.

In other action, the board:

—Approved a vehicle-use policy for using county vehicles.

—Authorized county officials to negotiate a contract with the Saxon Harbor Boating Club for use of the club’s boat lift once the marina reopens.

—Approved amending the contract with the sheriff’s department deputies, changing shifts from 8 hours to 12 hours on a trial basis.

—Approved a proclamation designating Sept. 8-14 as Suicide Prevention Week in the county.