County chastised ;br; for surplus

Published 12:00 am Thursday, September 9, 1999

If it is wise to save money for a rainy day, the Mower County Board of Commissioners are among the wisest.

Thursday, September 09, 1999

If it is wise to save money for a rainy day, the Mower County Board of Commissioners are among the wisest.

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They accumulated $31.7 million by the end of 1997 and the amount could grow to $37 million by 2000.

That would take care of several rainy days.

Malcolm McDonald says it’s "too much" and wants the county commissioners to do something about it, for instance, a rebate or buy-down of property taxes.

He’s very serious.

"As you know, this has become my favorite topic," McDonald said at the outset of a presentation before the county board Tuesday.

"The county’s fund balance sends a very strong message to all. It’s excessive."

McDonald, a retired Austin Independent School District administrator, compiled a 22-page report comparing Freeborn County and Mower County finances. On Tuesday he turned over another 4-page analysis.

Ironically, he made his presentation on the day the Minnesota State Auditor announced it was beginning its annual audit of Mower County finances. However, the audit is of fiscal year 1998, meaning the most recent information is from 1997.

McDonald said that handicapped county officials and staff and said, "That certainly wouldn’t happen in the real world."

The highlights of his presentation included the assertion, "It would appear that this increase in the county surplus has been created by design on the part of those who are in charge."

"During the seven years, the surplus has about doubled in value to a total of $31.7 million," he said. "What would be the value if we added calendar 1998 and calendar 1999 budget surpluses to this figure? If recent history is any indication, the fund surplus would exceed $35 million."

When State Auditor Judy Dutcher visited with Mower County officials and staff in 1996, she chastised the county for accumulating reserves that amounted to 143 percent of the county’s expenditure budget. Mower County ranked first in the state for accumulated reserves, according to Dutcher.

"I don’t really think that is a positive," McDonald said. "That’s doesn’t happen at the state level or the federal level yet it is happening in Mower County."

"Accumulating surpluses that could soon range from $35-million to $37-million with a $27-million expenditure budget is excessive," he said.

"Mower County is over-taxed," he continued. "You could pay all the taxes over the next four years at $8.5 million per year with the surplus."

"Our agriculture community is in a very deep, deep depression at this time and the question you have to ask yourselves is ‘Why has this surplus been allowed to grow to such a large amount?’ "

The county board has appointed a long-range planning committee with several sub-committees to advise the commissioners on what to do with the huge surpluses.

"Now, we say we’re going to figure out a way to spend it," he said. "I sense this whole system leads to abuses."

The example used by McDonald was the government center renovation project, which was announced as a $3.2 million project, but which now exceeds $4.2 million by county officials’ and staff’s own admission.

During the 1998 elections, the county’s surpluses became a publicly-debated issue by county board and other candidates, when the government center renovation cost-overruns were revealed.

Observing McDonald’s presentation Tuesday without comment was one of the candidates, Greta Kraushaar, who unsuccessfully ran for a seat on the county board.

McDonald wants the commissioners to report, in writing, the "rationale for generating the $35-million-plus fund balance that will exist in our county at the end of calendar 1999."

Again he repeated his assertion, "At current rates this amount would pay the taxes of every citizen in Mower County for four years into the future with money left over."

His investigation also revealed during the period, 1992-1997, taxes have increased in Mower County for county purposes only at a net rate of 20.63 percent over the six years.

"During the same six-year period, Freeborn County had a net tax increase of 1.52 percent," McDonald said.

McDonald charged last year the county commissioners were "ready to raise the tax levy another $400,000 until several citizens complained."

"What was the rationale for this increase when we already have a large surplus? Can we obtain a report regarding this topic?" he wanted to know.

McDonald also said the argument that accumulate a large surplus lowers taxes isn’t true.

"The income from the surplus has always been net since expenditures during the period did not exceed revenues," he said. "At no time during the period, 1991 through 1997, was the principal of the fund balance invaded."

So, what does McDonald want the county board to do?

First and foremost, he said, the surplus should be reduced to under the $10 million level with the rest rebated to taxpayers on an equable basis. "This should result in a rebate to taxpayers of Mower County of $25 million and leave a fund balance of $10 million plus," he said. "The rebate is requested since the funds were raised with no purpose or plan for their use."

Also, McDonald wants the county’s property tax levy reduced so that "citizens of Mower County are no longer over-taxed by the county."

The commissioners listened without comment and when McDonald finished his presentation, Ray Tucker, 2nd District, said to him, "Thanks for your concern."

During a break in the meeting, the commissioners, Tucker, Dave Hillier, District No. 3, Len Miller, District No. 4, and Gary Nemitz, District No. 5, each said conversationally they were satisfied the long-range planning committee was satisfactorily addressing the issue of the surplus.

When the meeting reconvened, the next order of business was the monthly investment report from Mower County Treasurer Ruth Harris, showing how much the county’s fund balance has grown since the last report.

The only large capital expenditure being considered by the county board is the multi-purpose ice rink at the fairgrounds. The county’s share of the project has grown from $500,000 to $1.8 million.