Harris tax hike sky high

By Barbara Brown
Harris residents filled the garage area of the City Hall last Thursday night to complain about taxes.
But, unlike many other towns in Minnesota who may be facing small tax increases, Harris residents have legitimate cause to complain.
Property taxes are going up an average of 90 percent per household with some individual tax bills jumping 140 percent over last yearís.
The city council worked out a budget that City Attorney Kevin Shoeberg said was ìbare bones,î but still came up with a $317,000 difference between income and expenditures in the general fund.
Shoeberg presented the councilís position during the meeting, which lasted more than three hours.
ìItís been one of those difficult years,î Shoeberg began. ìNot just for the state, but for all of us.î
Shoeberg told residents the city had suffered considerably in the repercussions of embezzlement by former city clerk Bonnie Swanson.
Swanson was found guilty of stealing city money over a period of several years.
The fall-out to the city was nearly $40,000 in IRS fines, the direct loss of about $60,000 and $47,000 in accounting fees to sort out the mess she and previous councils left behind.
During the past three years at least, Shoeberg told attendants, the city has over-spent its budget by about $120,000 each year.
Most of the over-spending has come in the form of subsidizing the cityís water and sewer budgets through the general fund, which is not legal.
Shoeberg said the council knows that previous method of account is not legal and it will not happen again.
He said issues like the removal of the subsidy from the sewer and water fund and the fact that the city has not imposed a water and sewer rate increase in years have caused part of the need for higher taxes.
Shoeberg said the city will be instituting those changes soon, but that it was not enough to pay for the expenses the system has for maintenance.
Shoeberg told residents one of the greatest drawbacks for the council this year was the discovery that the city had no accounting records for the past seven years and that the city did not have a clear picture of its financial situation.
He said at one time the city had $700,000 in savings funds, but that amount has dropped to about $250,000 for general fund and $200,000 for the sewer and water fund.
He said the city had been borrowing from its reserve funds for years to subsidize the general budget.
Another compounding factor, Shoeberg said, is the lack of collection efforts on the part of the city for services to other townships for fire protection.
The city recently discovered that Sunrise Township had been receiving fire protection services, but it was not paying for the service as originally stipulated.
The city is working out a contract that would require about $22,000 per year for fire protection from Sunrise Township and a similar contract may be drawn up with Fish Lake Township.
Most residents understood that the city had faced some serious financial problems during the past year, and most understood that taxes would have to go up in some amount.
However, they also told the council that the demand for 100 percent tax increases was ridiculous and asked that the council consider raising taxes in increments to regain money it lost over the past several years.
ìYou guys had a real problem in the past and youíre trying to make us pay for it,î said one Harris resident. ìIf the taxes had increased incrementally over the years, we wouldnít have to do this.
ìYouíre going to push us out of here.î
Resident Sharon Payne asked why the council could not take $100,000 from the savings and move it to the general fund to help stave off a severe tax increase.
Payne said she was worried about seniors on fixed incomes who may not be able to afford the tax hike.
Shoeberg told residents the city council would have to make that decision, but that the cityís auditor did not recommend moving money from savings in case of an emergency.
One woman, a senior citizen, asked what the council would do if she or other residents refused to pay their taxes.
Shoeberg said the issue would be taken up by the mortgage company and the Chisago County Sheriffís Office and that a forced auction and repossession could be possible.
After a motion was made ñ and failed ñ to cut the budget further to try reducing the tax increase, the council passed a resolution approving the $429,300 budget for fiscal year 2003.

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