Fund balance jumps

Published 12:00 am Thursday, October 24, 2002

Contrary to indications by Mower County commissioners to deficit spend in 2001, the latest Minnesota State Auditor's report shows the county's fund balance reserves have actually increased.

The balance, for both reserved and unreserved funds, now stands at $36,320,369. That number is up from last year's figure of $34,242,465.

The report further shows that just $1,399,350 has been designated for reserved funds, meaning this year's total unreserved balance is $34,921,019.

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The report has again raised questions among local officials, particularly those in Austin's business community, if county commissioners are addressing concerns to draw the balances down. Mower County has the second-highest fund reserve balances in the state at 134 percent.

"That's just huge," said Sandy Forstner, the executive director of the Austin Area Chamber of Commerce. "They say they're deficit spending, but they're continuing to hoard taxpayers' money. I don't care if it's business owners' taxes or property taxes, it's still our money.

"I think it's time taxpayers got some straight answers."

The county had budgeted to spend down $4,157,497 in general and special revenue funds this past year. Instead, it gained $1,696,642 in income, which makes up most of the total increase in the fund balance from last year. County coordinator Craig Oscarson said commissioners have planned to spend down the reserves. In fact, he said, the county would not have gained income had it not been for a $2.5 million "donation" from Great River Energy.

Oscarson said the company gave the county the money in lieu of a personal property tax assessment. However, the company still pays the county real estate taxes.

"When we did our budget, we did not budget that money," Oscarson said.

"If we wouldn't have got the donation, we would have deficit spent $123,669 in the general fund. We won't get this donation every year, it's just one time."

Oscarson also disputed the auditor's report on budgeted interest income.

The report states the county budgeted for $1.7 million in interest income, yet instead received $2.87 million.

Oscarson read a county financial report that said the county actually received about $2.05 million in interest income. When asked about the differential, Oscarson said that "we never got that difference because there's a lot of multi-year investments and we've never cashed them in."

Mower County Treasurer Ruth Harris said the county invests in various certificates of deposits, government bonds, notes, bills and mortgages and general obligations with a "AA" rating or higher.

However, Forstner said the auditor's report speaks for itself.

"The county has been telling us they've been deficit spending for the past two years, but the audits don't bear that out," he said.

Greg Hierlinger, the deputy state auditor for audit practice, said many options exist for counties to spend down their reserves. However, he said nothing can be accomplished unless specific goals are spelled out.

"There's a lot that goes into it," Hierlinger said. "It would be bad if the county doesn't have a plan on how they're going to spend it down over a number of years. The management of the fund balances is a local decision.

"It's up the county board and administration to how they're going to use a fund balance for future capital projects or spending it down for using it for current expenditures.

"It is a local decision and obviously the county is aware of it." Geoff Baker, the president of McFarland Truck Lines and a member of the

chamber's governmental affairs committee, said more decisions need to be

made on behalf of commissioners that would benefit local taxpayers.

"I don't buy this 'Woe is me, we're running out of money' from the


Baker said. "I don't see it. I struggle with that.

"I really don't know what the right answer is and don't understand the

spending priorities that exist. But I can't get past that they're taxing


excess of their needs and they're sitting on a lot of money."

Commissioners froze the property tax levy last year, but Forstner said

there's talk of upping the levy more than 3 percent later this year.

"For them to come around with a proposal to increase the taxes further


next year is unconciable," he said. "That levy should be frozen until


balances are brought down to an appropriate level and commissioners need


decide what that level is."

Baker said commissioners might want to consider another option.

"If you want to create jobs, lower the tax burden," he said. "What could


better for the county to do than to lower the reserves and put money

back in

people's pockets?"

Dan Fields can be reached at 434-2230 or by e-mail at