No county rail authority tax levy increase proposed

Contributing Writer

No increase in its property tax levy for 2018 is proposed by the Anoka County Regional Rail Authority.

Aug. 22, the rail authority, which comprises the seven members of the Anoka County Board, approved a 2018 preliminary levy of $2.74 million the same as this year.

But the proposed budget for 2018 jumps to $9.59 million compared with the 2017 budget of $2.96 million.

That’s because the rail authority is now responsible for the county’s $6.7 million share of the Northstar Commuter Rail’s operating expense next year following the dissolution of the Counties Transit Improvement Board, which previously paid the Northstar’s operating cost.

However, the Anoka County Board June 13 implemented a county transportation tax, which is a continuation of the CTIB tax, and $6.7 million of that tax will be used to pay the Northstar operating expenses, according to Dee Guthman, rail authority executive director.

Through a joint powers agreement, representatives from the Anoka, Dakota, Hennepin, Ramsey and Washington county boards comprised CTIB following passage of state legislation in 2008 authorizing a 1/4 percent sales tax in those counties, plus an excise tax of $20 per motor vehicle purchased or acquired, to fund transit projects, but with CTIB’s decision to disband the county board in June replaced the same percentage sales and excise taxes with a transportation tax.

Hennepin County has also assumed a portion Northstar operating costs for the portion of the line that runs through the county, while the Metropolitan Council is required to pay 50 percent of the operating costs of all transit lines in the Twin Cites, including Northstar, with funds appropriated by the Minnesota Legislature, according to County Commissioner Scott Schulte.

Regional rail authority expenses outside of the Northstar cost will decrease from $2.96 million in 2017 to $2.89 million in the proposed 2018 budget, even though the bulk of that budget, $2.1 million, covers the rail authority’s share of Northstar construction bonding costs, is a bit more because of higher interest payments, Guthman said.

Administration costs will decrease $20,000, professional services expenses will decline $25,000, the county will no longer have to pay a CTIB membership fee of $11,000 and the county’s share of the Northstar bus service to and from Big Lake and St. Cloud has been shaved from $30,000 to $6,000 following a negotiated agreement earlier this year, she said.

The difference between the proposed levy and the expenses will come from use of the authority’s reserve fund to the tune of $153,600, which is less than the $226,060 that was taken from the account for the 2017 budget.

According to Commissioner Matt Look, who chairs the Rail Authority, the transportation tax is expected total $10.3 million for 2018 and the amount not pledged to Northstar will go into a separate county fund to help pay for other highway, bridge and transit projects, for example, grade separation construction.

But while the amount of the transportation tax received by the county might fluctuate from year to year, Look said he was also concerned that the county’s share of Northstar operating costs could increase.

“We need to find a way to control Northstar expenses,” Schulte said.

According to Mary Richardson, rail authority attorney, an agreement is being negotiated with the Metropolitan Council, which operates Metro Transit, to place a cap on potential increases in Northstar operating costs that would be borne by the counties.

No agreement has yet been signed, but Schulte said the annual cap is likely to follow the construction cost index for the Twin Cities area, which is about a 3 percent increase, not the 10 percent the Metropolitan Council was originally proposing.

Commissioner Jim Kordiak said the county also needed “to keep an eye” on the cost impact of Northstar rolling stock equipment needs.

Capital costs are part of Metro Transit’s annual budget for the Northstar line that will now be reviewed by the county as it was by CTIB before, according to Guthman.

“It’s no different than the county budget in that it requires close scrutiny each year,” Look said.