---

   BACKUS — Cass County department heads, Commissioners and Citizen Budget Committee members met for the county’s annual planning meeting Thursday, June 12 and shared the market trends of 2025, a legislative update and foreseeable issues for 2026. Most departments mentioned with the shortfall of funding from state and federal agencies there will be impacts to their departments. Another concern for departments was the implementation of the Paid Family Medical Leave (PFML) and the impact it will have on the staffing of their department. Commissioner Neal Gaalswky informed those in attendance, at the close of the meeting, he and his neighbors saw property tax increases from 50-71% this year. Therefore, he cautioned the county really needs to have a tight budget this year as they cannot endure another similar tax hike.

Budget Update

   County Administrator Josh Stevenson shared an update on the 2025 budget by sharing the county will be spending approximately $88,912,253, which is almost $11 million more than 2024. The majority of this increase was spent on updates to roads and bridges. It was also mentioned the property tax levy has increased 9.98 percent over the previous year, which was down over the 13.25 percent increase citizens saw in 2023.  Stevenson also informed those in attendance the capital plan was updated with a facility strategy of extending the useful life of the buildings evaluated, new construction of highway shops to include partners, co-locate HHVS and Courts with the Leech Lake Band at Cass Lake and continue contracting jail beds with Itasca County. This was the plan the commissioner’s choose in order to continue with a capital levy of $900,000 in 2026. 

   The following are departmental updates:

Administrator

   Selected Market Trends:

   • Unfunded mandates from the State and Federal Governments increase.

   • Stevenson mentioned an increase in public data requests are consuming more County resources, currently staff is spending an additional one to two hours per week.

   • Aging County buildings and need for more storage will impact Capital Funds.

   Legislative Updates:

   • Changes to the Open Meeting Law will relax remote attendance requirements.

   • Ambulance Services -new Operating Deficit Grant Program and uncompensated cost care pool for EMS

   • No relief for Paid Family Medical Leave (PFML) that will be beginning January 1, 2026 or Earned Sick and Safe Time (ESST).

   2026 Issues:

   • More pressure on ambulance services expected.

   • Two County Commissioners seats on ballot.

   • Potential increases in FTEs due to unfunded mandates.

Assessor

   Selected Market Trends:

   • 2025 Cass County estimated market value is up 5.16%, excluding new construction & state assessed property values, for a total of $12,470,979,900.

   • New construction value is down 1%, for total of $149,867,700.

   • Total County estimated market value, including new construction, is $12,620,847,600.

   • New home starts were down 15%. There was a total of 144 new home starts.

   • Real estate sales are down 4% for the first quarter of 2025 with 131 sales. The second quarter of 2025 is showing a possible increase.

   • First quarter foreclosures are down 20%, with a total of four foreclosures.

   • Local Board of Appeal and Equalization appeals were down 6.8%, with a total of 146 appeals.

   Legislative Updates:

   • There were no legislature updates that affected Cass County this year.

   2026 Issues:

   • Education/Licensing, two staff members needing to finish or they won’t be able to continue being employed by Cass County. 

   • Staffing/cross-training, continuing to train all staff for every position within the department.

   • Updating technology is going to continue to be placed on hold until there is a program on the market that will do everything staff needs. 

Attorney

   Selected Market Trends:

   • Currently there is one Attorney on FMLA, but will be back in July.

   • Implementation of new Department of Correction policies with those being the earned incentive release through the Minnesota Rehabilitation and Reinvestment Act (50% discount on sentence) and early discharge from probation requests.

   Legislative Updates:

   • Minnesota African American Family Preservation and Child Welfare Disproportionality Act (MAAFPCWDA) is a form of child protection act that will apply to more that just one race. It is anticipated more staff will need to be hired to accommodate the extra work load.

   • Minnesota Digital Exhibit System will shift data entry to the attorney’s office and require staff to label and upload exhibits. Unfortunately if a change is needed, it will make cases take longer, but it will be better for jury deliberations as they have more access to videos and photos. 

   • A Minnestoa Statute redefined its definition of delinquent child to be 13 years or older.

   2026 Issues:

   • Probation Delivery Model – Unified Model: 

More efficient delivery of services and who uses the services, better risk management of felony offenders and offers additional opportunities for collaboration with Leech Lake.

   • Cass County Detention: deciding if the department proceeds with contracting services, in-housing services or outsourcing services after a 72 hour hold. 

Auditor-Treasurer-Recorder

   Selected Market Trends:

   • Showing an increase in tax payments received electronically, either by ACH or Credit/Debit Card usage, since switching to Autoagent. Delinquent tax payments have increased by five percent also.

   • County Auditor - Treasurer, Lisa Schadick feels there has been an increase in direct balloting due to the change in number of days allowed to vote from seven to eighteen.

    • Increase in electronic documents recorded and passports processed. Shadick also feels the increase in passport processing is due to the Real Id deadline. 

   Legislative Updates:

   • Election Law changes – Changes to election forms for 2025-2026.

   • Limited funds available for elections with the State only funding $200,000 state-wide to the Help America Vote Act (HAVA) Grant and the Voting Operations, Technology and Election Resources (VOTER) account.

   • Judicial Security Bill effective January 1, 2026, this Bill protects the personal information of Judicial Officials. Shadick mentioned this is requiring extra staff time to make sure information in all databases is hidden for this group of people. It was also mentioned other citizens are now wanting to be included in this Bill. Lt. Chris Thompson, mentioned he testified on behalf of all sheriff’s to be included in this Bill due to safety concerns.

   2026 Issues:

   • Increased interest from cities and townships to go from mail ballot to in-person polling locations, which Schadick mentioned the county would pay for the equipment and training needed with the cost of the equipment alone being $9,500.

   • With the combining of the Auditor-Treasurer and Recorder Offices they are reconfiguring the offices and workstations to create efficiencies and maximize space.

   • Continue cross-training efforts while providing excellent customer service and succession planning.

Central Services

   Selected Market Trends:

   • Cybersecurity remains a high priority.

   • Change in technology and the use of Artificial Intelligence (AI) is transforming software development, content creation, and enhancing automation.

   • Increased use of cloud solutions for software, data, and computer resources.

   Legislative Updates:

   • Data Practices Act Changes were left out of Judiciary Bill. This would require counties to maintain an audit trail on all government records. If this were to be included it would require a 3-year retention on all correspondence, which would require an increase for storage.

   • Association of Minnesoa Counties and Minnesota County Information Technology Leadership Association’s local government Cybersecurity Grant Program bill was not included in the omnibus bill. This had good bipartisan support and support from Minnesota IT Services, but the State’s economic forecast was a likely factor.

   2026 Issues:

   • Unfunded Mandates

   • IT hardware costs are expected to continue to rise because of proposed tariffs and component supply issues.

   • Take advantage of opportunities with Generative AI while protecting our data. The department is hoping to have AI policies in place by the end of the year.

Chief Financial 

Officer

   Selected Market Trends:

   • Just over a year into the CFO position, Becky Toso has now experienced all regular items that occur on an annual or more frequent basis.

   • ARPA is still wrapping up, with interagency agreements for use of remaining funds by 2026. Annual compliance reporting has been completed with the US Treasury for the period ending 04/30/25.

   • Reporting compliance has started for Opioid Settlement Funds, and annual reporting was completed in March 2025.

   • Facility Conditions Assessments (FCAs) were completed on the Courthouse, Annex, Law Enforcement

Center, Walker Highway, and Backus Land Department to determine what capital improvements will be needed and when they will be needed.

   • Self-Insurance Fund balance has decreased as anticipated. Continue to monitor how changes made in 2024 and 2025 impact. MCIT Insurance deductibles and coverage amounts were adjusted for 2025 for cost savings and proper coverage. Deductibles will be reviewed again for 2026 when renewal pricing is available in Fall of 2025.

   Legislative Updates:

   • Items addressed in the special session will impact the 2026 levy, especially in the Health, Human, and

Veteran Services (HHVS) Fund.

   • The existing fund balance in HHVS, due to Cass County being well fiscally managed, may provide options.

   • Tariff and inflationary assessment fees from vendors.

   2026 Issues:

   • County hired USI to complete request for proposal for 2026 medical insurance provider to determine whether

BCBS is providing the best pricing and value.

   • Facility Conditions Assessments (FCAs) results – figuring out what to do and when based upon fund

balance and capital projects levy, with no help anticipated from the State.

Court 

Administration

   Selected Market Trends:

   • 9th District Referee, which took on non-crimial cases to assist with the backlog the department aquired during COVID ends June 30, 2025.

   • AI Chatbot for Public Website.

   Legislative Updates:

   • Individuals who committed a felony, and are out on parol, will be allowed to serve on juries before discharged from sentence.

   • The governor signed the Judiciary Bill to include funding for a new justice partner access system

   2026 Issues:

   • Projected deficit, suggest forming a committee to help with preventing layoff’s.

Environmental 

Services

   Selected Market Trends:

   • Minnesota Counties Intergovernmental Trust (MCIT) Case – Currently the county is involved in two pending lawsuits.

   • With more people moving to the area and purchasing or remodeling cabins built in the 70’s the department is finding septic location issues on undersized historic lots. Therefore, as a solution there may be a need for two lots to share a septic system.

   • The COVID permit boom has plateaued & dropped slightly

   • The department is seeing increased permit violations.

   Legislative Updates:

   • Proposed unlined C&D Landfill rule changes - Anticipated decision late 2026

   • Capital Assistance Funding for Cass Transfer Station – Unfunded this session

   • Draft state budget shows a 50 percent reduction to AIS Funding beginning for Fiscal Year 2028. Therefore, beginning with July 2027 inspector hours will be cut in half at boat ramps.

   • Slight decrease in SWCD funding from the past two years, but an increase from proposed tax allotment – Reduction from 15M to 12M in FY 2026.

   2026 Issues:

   • Consider a raise to the Cass County Solid Waste Tax Assessment. There has been no increase over the last twenty-five or more years.

   • Added pressure for more regulation from new residents as they would like to see ordinances regarding: light, dog, golf cart, noise, public nuisance, properties, etc.

   • Continue to update and amend our existing Ordinances.

   • Two long-time staff members anticipated retirements.

County Facilities

   Selected Market Trends:

   • Increased need for maintenance on all county buildings as more systems come to the end of their life cycle.

   • Trying to better manage cleaning to enhance our efforts where it’s needed (i.e., responding to more visitors by more frequent cleaning/resupply efforts or not cleaning unused or lightly used spaces as often.)

   • Continued reduction in oil prices and natural gas prices has the potential to help our heating budget in 2025-2026.

   Legislative Updates:

   • Cuts and cost shifting in the state budget hurt infrastructure as needs do not slow; wear, tear, and weathering never stop.

   • Due to relatively small quantities used in day-to-day operations, little tariff effect is noted, however, there is potential to see additional costs in any project utilizing steel, iron, copper, aluminum, and cement due to tariffs or environmental initiatives.

   • No news is good news; the Minnesota legislature made NO major changes in energy policy this session, hopefully, electric rates will stay flat.

   2026 Issues:

   • Climbing insurance premiums for general liability and workman’s compensation, along with County policy matching MCIT recommended limits, hinder the ability to hire smaller contractors and handymen for minor work on facilities.

   • HVAC supply chain issues, ANOTHER switch of refrigerants has caused a backlog in some parts. Repair of existing systems is getting more expensive.

   • State cuts and mandates for service make predicting space needs next to impossible.

Health, Human, 

Veterans Services

   Selected Market Trends:

   • Significant concerns for property tax increases and service pressures due to: anticipated Federal changes in Supplemental Nutritional Assistance Program (SNAP) and Medicaid; anticipated State cost shifts to Health and Human Services and anticipated increased cost of administrative costs to monitor new changes.

   Legislative Updates:

   • Does not meet medical criteria – Mental Health clients placed in Community Behavioral Health Hospitals (CBHH) or Anoka Regional Treatment Center (ARMTC), looking at a $13.5 million per year cost shift to counties starting July 1, 2025. We are budgeting

$150,000 for Cass County.

   • Competency Restoration – a cost shift of $8.3 million to counties annually. The certified program consists of twelve sessions of 1-3 hours a session at $150/hr. per inmate/client. Twenty-five clients/year would cost approximately $135,000. HHVS is looking into creating their own program in order to save money.

   • State replacing County reimbursement for staff completing MN Choices assessments from time study reimbursement to counties with a flat reimbursement. This rate is yet to be set.

   2026 Issues:

   • Achieving staffing levels and the training needs to meet the MAAFPCWDA requirements by January 1, 2027. With the PFML going into effect Jan. 1, 2026, the department is looking as having to add between four to six new social workers.

   • Navigating through future unknown federal and state changes that will have a local impact on our citizens who are involved in all aspects of our services, such as public health, healthcare, and mental health.

   • Resources to handle the influx of client calls concerned about the instability of their ongoing eligibility for public assistance programs.

Highway

   Selected Market Trends:

   • 2025 County State Highway Funding Program saw an additional $490,000 for construction and additional $327,000 for maintenance.

   • Local Option Sales Tax increased slightly in 2024 to $ 3.1 million. The start of 2025 shows a small decrease to date.

   Legislative Updates:

   • Current budget proposals have limited funding for bridge replacements of $20 million, and road improvement grants of $42 million.

   • Special Projects and Earmark funding increases at the State and Federal Level. The current House has $105 million proposed as “Priority Projects”.

• Infrastructure Investment and Jobs Act funding ends in 2026, with an uncertain future on the federal transportation bill.

   2026 Issues:

   • MnDOT is revamping their Corridor Planning Guidebook and their Cost Participation Policy Manual  with completion dates in 2026.

Human Resources

   Selected Market Trends:

   • Culture and Strategy must move into alignment

   • Retention strategy moves from response to prevention. With long term staff nearing retirement, the County needs to determine how to entice and retain new staff.

   • Personalized employee development accelerates growth.

   Legislative Updates:

   • Paid Family and Medical Leave (PFML) - new tax deduction that will be a 50/50 split with the employees. The County is having a meeting on July 10 to look at the options between utilizing the State PFML plan or a private company plan. When asked what the additional cost to employees may be, Stevenson stated the estimated total annual cost is $200,000 which would then split 50/50 with roughly 300 employees.

   2026 Issues:

   • Labor Negotiations

   • Health Insurance and Fund Balance

   • Leadership Development

Land

   Selected Market Trends:

   • Timber markets remain stable amongst all sales sold, there is two remaining.

   • Transitioning from ARC Map to Arc using ProWest

   • Increase for GIA ATV trails while funding is down.

   Legislative Updates:

   • Provisions related to cutting Payments in Lieu of Taxes removed.

   • Cuts to the UMN for Forest Health, Outreach and Seed collection.

   • Efforts continue to secure funding for Blighted Properties.

   • Biomass considerations as “carbon free”- Aviation fuels.

   2026 Issues:

   • Emerald Ash Borer Quarantine now includes Aitkin County, which makes it a lot easier for transporting  timber as there is no longer a need for special permits.

   • Demand for Carbon Project continues.

   • Legislation to increase ATV weight to 3000 lbs+ 

Probation

   Selected Market Trends:

   • Continued slight downward trend of adults and juveniles entering the justice system.

   • Decrease number of juveniles being placed out of their homes,which is resulting in a  cost savings.

   • Several counties across Minnesota are changing the probation model to the Community Corrections Act Counties.

   Legislative Updates:

   • Continued planning for the delinquency age change on August 1, 2026. (Age change from 10-17 to 13-17 years old)

   • Probation fees sunsetting extended to August 1, 2029. This will now give counties two additional years to acquire additional state funding to make up the fee deficits to the county budgets.

   2026 Issues:

   • Consider changing Cass County’s probation delivery system.

   • New model provides local control over all fiscal, operational, and personnel functions.

   • Continue to promote coordinated county and tribal-wide planning, communication, and integrated services to include newly established tribal probation.

   • Larger legislative funding influence on the State of Minnesota Legislators.

Sheriff

   Selected Market Trends:

   • Current Jail and In-Custody Numbers are maintaining lower-than-average trends.

Opportunity for new jail operations, contract options, and deferred maintenance of the Law Enforcement Center.

   • Continued increase of costs in goods and supplies, including vehicles, equipment, and consumable supplies.

   • Currently, only two open Deputy positions; hope to fill them by EOY.

   Legislative Updates:

   • New PFML Legislation for 2026 – Impacts on operations are unknown but could be significant for 24/7 operations.

   • Continues Training Requirements (Mental Health, SRO, etc.)

   • Proposed changes to mandates on Body Camera data, including collection, storage, and drone use.

   • Proposed changes to 2911 Jail Statutes from MN DOC.

   2026 Issues:

   • Prioritizing LEC/Jail deferred maintenance needs from the 2025 Capital Needs

Assessment.

   • Address heated storage for vehicles, equipment, and records. No Sheriff space created with the new Hackensack Highway Garage.

   • Attracting/Retaining quality applicants for Deputy and Dispatch positions.  

2026 Budget 

Schedules

   Cass County’s five citizen appointees and two county commissioners (budget committee) will receive departmental requests and prepare a proposed 2026 county budget and levy this summer.

   The county board then sets a preliminary levy in September before the budget committee makes additional budget changes in October. The board will hold a public hearing before adopting a final budget and levy in December.

   That schedule is as follows:

   • July 7 — Preparation packets released

   • July 25 — Departmental requests due

   • Aug. 15 and 29 — Budget committee reviews requests and prepares the preliminary budget and levy,

   • Sept. 2 — County Board sets preliminary levy,

   • Oct. 3 and 10 — Budget committee makes additional budget changes,

   • November — Truth in taxation notices mailed to taxpayers,

   • Dec. 2 (6 p.m.) — Public hearing on proposed budget,

   • Dec. 16 — County board sets final levy and budget.

---