Reprinted from

Minnesota counties improve fiscal health
By David Unze dunze@stcloudtimes.com

September 6, 2007

St. Paul — Minnesota counties, in general, are doing a better job of improving their fiscal health by keeping more money on hand for unexpected and unbudgeted expenses, according to a state auditor’s report released Wednesday.

But that same report raises some concern about the increase in the long-term debt counties are carrying.

“Minnesota counties in general have seen some improvement in their fiscal health over the previous year,” State Auditor Rebecca Otto said in a news release. “However, our data shows noteworthy long-term trends in revenue and expenditure levels and in the rise of long-term debt. We will share this data with legislators to inform their decision making.”

Otto’s report is more than 100 pages long and is available on her office’s Web site.

It analyzes 2005 budget data from Minnesota’s 87 counties.

It shows revenues increased more than expenditures from 2004-05, allowing counties to increase their unreserved fund balances by 5.2 percent.

Those unreserved fund balances as a percent of expenditures are at the highest level in more than 10 years, Otto’s report said.

That indicates improving fiscal health, she noted.

The unreserved fund balances totaled more than $1.8 billion at the end of 2005.

More than $1.1 billion of that was designated for services that were to be paid for in the future.

That left $753 million that was at the disposal of counties for unexpected expenses or projects.

The $753 million was a 5.2 percent increase from 2004.

The report identified what Otto called “troubling trends” of revenue and expenditures remaining at 1999 levels when adjusted for inflation. That’s troubling because counties have incurred greater debt, she wrote.

Long-term debt that counties are carrying grew 37 percent from 2001-2005, according to the report, a 32 percent increase from the four-year period 1996-2000.

How local counties are doing fiscally

Stearns, Sherburne and Benton counties saw anywhere from 19 percent to 40 percent increases in their unreserved fund balances from 2004-05, according to a state auditor’s report released Wednesday.

State Auditor Rebecca Otto indicated in her report that those increasing fund balances, when taken as a percentage of county expenditures, show fiscal health improving for many Minnesota counties.

Stearns County’s unreserved undesignated fund balance increased from about $1.5 million to $1.84 million from 2004 to 2005. That measures money that is left over in the county’s checkbook once it finishes paying the bills. Sherburne County’s unreserved undesignated fund balance increased from $1.6 million in 2004 to $4.3 million in 2005. Benton County saw its same fund increase from $9.2 million in 2004 to $12.8 million in 2005.

That measures only part of those counties’ unreserved fund balances. The other part is money that is in county coffers for designated expenses but has yet to be spent. The designated and undesignated balances are added to determine the increases those counties saw, which ranged from 19.6 percent in Stearns to 21 percent in Sherburne and 33.9 percent in Benton.

Otto’s report also measured the long-term debt that counties were carrying at the end of 2005.

Benton County’s bonded indebtedness was $12.2 million; Sherburne’s was $35.3 million and Stearns was at $14.4 million.