Lake County Board of Commissioners are both optimistic and pessimistic about the future of the U.S. Forest Service appraisal of the Boundary Waters Canoe Area Wilderness following a meeting with the Forest Service appraisers last week.
At the Committee of the Whole meeting at the Little Marais Community Center, commissioners Rick Goutermont and Rich Sve shared their views of the meeting and what it would mean for the future.
In June, the Forest Service told the county it would receive a 53% reduction in Thye-Blatnik Act-authorized payments in-lieu-of-taxes due to a reappraisal of the BWCAW, which will mean $1.3 million in PILT revenue annually. The estimated difference could cause the county to have to raise the levy by 12.6% to make up the lost revenue.
On Sept. 11, Sve, Goutermont, County Administrator Matt Huddleston and county appraisers met with the Forest Service and made arguments to supplement the official complaint the county made regarding the appraisal.
"It was a good meeting. Everybody was professional," Goutermont said. "Our appraisers did a good job of presenting our case and arguing that the comparisons that they used were poor and showed them the problems that we had with it. Then, of course, they presented their side of the story."
According to Goutermont, the crux of the Forest Service appraiser's argument was that they were looking at the BWCAW property as a whole. Since it would be highly unlikely, if not impossible, to find a buyer for the total 156,000 acres, the land would have to be parceled off.
"If we sectioned it off and sold it in 40 acres, then they’d use an absorption rate as to how many we could sell," Goutermont said. "And they figure it would take us 100 years to sell it all. So we’d be able at best to sell 10 parcels a year, according to them. We all know that’s not true. But it’s all data driven.
"They looked at Lake County and said, 'You’ve only sold five to six lake shore properties in the past year, so that’s all your capable of selling.' They didn’t take into consideration the fact that people who own lake shore properties aren’t selling them."
Regardless, Goutermont said the appraisers seemed overall receptive and willing to look at the county's appraisals and data to do some comparisons.
"I’m not highly optimistic, I think we’ll see some adjustment on it, but not to the degree that we want just based on where they’re at," Goutermont said.
The county plans on submitting more data to the Forest Service, including more information from the land commissioner. According to Sve, when you take the reduction shown in the appraisal and apply it to the area, it values an acre of land at roughly $500.
"That's what they're saying the Boundary Waters is worth. That just doesn't jive with anything we're selling," Sve said. "Our assessors say, at worst, our swamp land is going for $500 an acre."
Playing chess with the levy
Considering the 1.3 million possible loss in revenue does make it difficult for the commissioners to decide where to set the county's preliminary levy. Commissioners will set the levy limit at the next board meeting Monday, Sept. 23. Currently, commissioners can't decide whether to pursue a levy increase between zero and 11%.
"When we've had budget discussions so far, one of our commissioners said, 'Well, if we're discussing a 12% reduction, we'd better set our preliminary levy at 11%,'" Sve said. "And Rick looked at me and said, 'Where are you at?' And I said zero. We have to find a place in the middle where we can agree."
Goutermont said the commissioners are "playing chess instead of checkers" with the budget and levy level this year.
"We’re trying to show the U.S. Forest Service how serious this is to our constituents in our county," Goutermont said. "If we scrunch it down to 1-2%, our cries to them that it's hurting us might fall on deaf ears. In all reality, it's a political move."
Goutermont argued for a 6% preliminary levy increase, with the caveat that if the Forest Service comes back with a more favorable appraisal, that number could be decreased by the December meeting where the levy is certified.
No action was taken.