Local governments grow over 10 years

There are a lot of explanations why, but local governments in and around Grand Forks have grown.

The 2012 budgets of the city, the county and the park and school districts, adjusted for inflation, are bigger than they were 10 years ago. Yet the populations they serve have not grown nearly as much, nor, in some cases, has the area's economy.

Grand Forks' population grew 7.1 percent between the two decennial censuses, but the budgets of the city grew 9.4 percent and the park district grew 30.3 percent. Grand Forks County's population grew 1.1 percent, but the county budget has grown 36.3 percent.

Enrollment between fall 2001 and fall 2011 shrunk 15.3 percent, but the School District budget grew 4 percent.

If the metro area's economy continues at the same pace it's kept the past several years, its gross domestic product will have grown 26.3 percent to $4.3 billion and the average personal income of its residents 25.7 percent to $40,500, based on a Herald analysis of federal data.

Why has local government grown?

We asked representatives from all four local governments for their explanation.

They named several factors, including the level of service they must provide, the cost of that service, the broader area they must serve and, in some cases, they said, it's really out of their control.

The county

Grand Forks County, where government grew the most, has a problem with the latter, according to County Commission Chairman Gary Malm.

Because the county doesn't have a home rule charter, he said, the state can tell it what services it must provide though it isn't always given enough money to provide those services. When that happens, the county has to spend more than the state requires, he said, which is especially true of social services.

"We're a pass through agency," he said. "The feds pass it to the state. The state passes it to us."

Voters also impose their own mandates.

When they vote to levy a certain number of mills of property taxes to certain uses, Malm said, the commission can't countermand them.

An example of this is the ambulance fund that voters doubled from 3 mills to 6 mills in 2002.

Finance Director Debbie Nelson occasionally compiles a report on this phenomenon. In the last report from 2010, 12.5 percent of the mills were voter approved, 31.3 percent were state mandated, 33.8 percent were needed to continue core county services and 22.4 percent were decided by commissioners, she said.

In 2004, 16.7 percent were voter approved, 24.4 percent state mandated, 37.6 percent for core services and 21.4 percent decided by commissioners, she said.

The schools

While the Grand Forks School District has increased spending only slightly, the population it serves has plummeted, in part because of slow population growth overall and in part because Grand Forks Air Force Base has fewer personnel after the loss of the tanker wing.

In theory, this would've been an opportunity for the district to reduce spending.

Superintendent Larry Nybladh, who started his job here in 2008, said the district has "right-sized" over the years, meaning reducing its staff, but that's been offset by other cost increases and by the fact that the district simply doesn't enjoy the economy of scale it used to.

Various types of inefficiencies emerge because of this. For example, there are fewer students but the same number of schools, which means roughly the same maintenance and operation costs. But closing schools is not popular with parents, who like having schools within walking distance.

Asked if it isn't time to consider such a move, Nybladh spoke in theoretical terms. As the community looks at diminishing inefficiency, he said, it will have to ask itself: "Do you subsidize that inefficiency for quality and opportunity?"

Which is another way of saying would you sacrifice those things to lower spending?

In other areas, the district is serving more and providing more services. For example, federal laws require schools to integrate special needs students into regular classrooms, which require more paraprofessionals to assist teachers. At the same time, the number of students, especially those with autism-spectrum disorders, has grown. The federal share of those costs has diminished over time, so the state and local share has had to go up, he said.

Finally, the state has given schools more money, but requiring them to dedicate some of the money toward increasing teacher pay to catch up with other states, Nybladh said. That's not a bad thing, but it does mean spending more on each teacher, he said.

The parks

At the Park District, one of the factors behind the growth in spending is the fact that it has more parks and other facilities and they're better than before, according to Executive Director John Staley.

Some of those facilities are supported mostly by fees rather than property taxes, for example, King's Walk Golf Course, which opened in 2002, and the new Choice Health and Fitness center, opening next fall.

The Park Board has maxed out the mills it can levied by state law so it's relying more on fees, Staley said. Fees have gone up, too, he said. When the district's main golf course was at Lincoln Park, the fee for 18 holes was $18, he said. At King's Walk, it is $45 for 18 holes, he said.

But other facilities are supported by property taxes, for example, Lincoln Drive Park, one of several parks on the Greenway that were upgraded in the early to mid 2000s.

Much of the Park District's spending appears to be driven by property taxes, but that's deceptive, Staley said. Some of the money goes toward special assessments levied by the city, the dike assessments are especially challenging because they're based on land area, and there's 900 acres of park. In 2012, nearly a quarter of property taxes will pay for specials.

But the fact is property values in Grand Forks have increased and there are more properties to pay taxes. Adjusted for inflation, every mill the district collects is worth 39 percent more in 2012 than in 2002.

Staley said the district must add new parks to serve new neighborhoods, even though those neighborhoods have not completely filled out, which means the cost of parkland per person is higher. Forty percent of increased spending is from new properties, he said.

The district can reduce spending, he said, but that means reduced services.

The city

Among the four local governments, the city came out looking the best. Spending went up only slightly faster than the number of people the city serves.

It's something that pleased Council President Hal Gershman, who said he was going home and telling his wife about it. That the city will only spend slightly more per resident next year than in 2002, he said, shows that the city has kept its promise to keep moderate property taxes while providing the same services.

"I know most businesses, adjusted for inflation, probably spend more today," he said. "Just look at health care."

After the council voted to increase property taxes by a mill, and committed to raising one more mill each year for the next three years to build a new south-end fire station, Gershman said he didn't hear one complaint from constituents.

Reach Tran at (701) 780-1248; (800) 477-6572, ext. 248; or send email to ttran@gfherald.com .