EDC board turns down staff request to increase levy
RAYMOND -- A request to increase the 2014 levy for the Kandiyohi County and City of Willmar Economic Development Commission was rejected Thursday by the operations board.
The EDC has not increased its levy since 2009 and has been "quite frugal" with its budget, said Director Steve Renquist, who asked the board to approve a $25,000 levy increase next year.
The increase would have brought the total tax revenue to $480,000 as part of the EDC's proposed budget of nearly $532,000.
Renquist proposed using $10,000 of the new revenue to give a "one-time" $5,000 pay bump to the EDC's assistant director Jean Spaulding and its ag specialist Leroy Petersen.
Board members had negative responses to both proposals.
Milan Schmiesing said he did not want to increase the levy when the EDC currently has $420,000 in unreserved funds.
Putting taxpayers' money "in the bank" doesn't make sense, said Schmiesing.
He said he would rather fund a budget increase by using reserves.
"I just don't see the need to increase the levy," said Schmiesing, who reiterated his dislike of public entities having large undedicated reserve funds.
Renquist cautioned the board that eventually the reserve fund will be gone or "greatly diminished" if it's used to fund an operating budget that has gradually increased over the years.
The board disagreed with Renquist and unanimously approved keeping the 2014 levy at the same rate it's been for the last five years.
That recommendation now goes to the Joint Powers Board next month for its action. Levies must be certified by Sept. 15. Levies can be reduced after that time but cannot be increased.
After a quick vote on the levy, the board spent considerable time discussing the merits of Renquist's proposal to increase the salary of two key employees, including the full-time ag specialist who has been on the job five months.
Renquist did not seek a salary increase for himself but cited a salary survey that he said shows the other EDC employees are underpaid.
Spaulding's current salary is $60,984 and Petersen's is $45,000.
Board member Gary Gilman said he is not opposed to pay increases but said paying people more "at the expense of taxpayers" should have a positive result, like improved economic development.
Renquist said he was concerned about losing current employees because someone else could pay them more.
Robert Enos said basing a pay raise on a study of what other entities pay their employees could be viewed as an effort to "keep up with the Joneses."
Enos said if the EDC was able to hire good talent for less money, "hooray for us." He said a raise should be linked to bringing new businesses to the county.
Renquist said he agrees that it's good to reward performance and both employees have displayed "exemplary" performance.
He said Spaulding is well-regarded for her work and has many career options, and although Petersen is new, he's "come out of the gate with good programs."
Board member Rollie Boll said he was concerned with how much it would cost to replace the existing staff if they did leave.
Several board members had high compliments for the EDC staff and did not want discussion about salary to have a negative effect.
"You guys do great work," said Schmiesing, who said the MinnWest Technology Campus would not have happened without the EDC.
"That wouldn't have happened without top quality staff, and you have to pay top quality staff," said Board Chairwoman Bev Dougherty.
The board did not take any action on the proposed 2014 budget and proposed salary increases and agreed to continue that discussion at a later date.