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Unfunded federal mandates leave townships in financial crunch as legislature cuts local aid

Townships must replace all their warning signs with new reflective materials by 2012. The estimated cost could reach more than $70 million statewide. (Sarah Smith/Enterprise)1 / 2
Minnesota Auditor Rebecca Otto chats with township officers about fiscal responsibility and accurate record keeping. (Sarah Smith/Enterprise)2 / 2

The smallest units of government will be the last to come out of the recession.

Those were the prognostications of David Fricke, executive director of the Minnesota Association of Townships, preaching to the choir last week.

He addressed a regional assembly of township officers, saying he was reporting "the sad notes of the (last) Legislative session."

Local Government Aid cuts, a terrible economy and unfunded federal mandates are making it nearly impossible for townships to keep a positive fund balance, Fricke maintained in a gloom-and-doom address that came as no surprise to the 80 officers attending.

"Our levy come January 15th, they will take double what they took last year," he reminded the officers. "It's a major issue facing us all."

"Us all" includes 3,000 units of local government staffed by 9,000 township officers statewide. Fricke said townships are the unit of government "closest to the people," yet a trial balloon floated last Legislative session would have done away with townships as too expensive to continue funding.

"It's more efficient government than we'd have by getting rid of it," he said in lobbying against the proposal.

But Fricke worries that rural government is getting left behind: only one township in the state received federal stimulus funding and that was 300 feet of paving near a rural intersection outside of Moorhead.

"Local government did not fare well," Fricke said.

But it's the federal mandates that will be the killer, he said.

Townships throughout Minnesota are responsible for more than 54,600 miles of roadways and 6,000 bridges. Many are not eligible for federal highway user funds, Fricke said. The township association is lobbying for a greater share of Minnesota fuel tax revenues to repair deteriorating roads, even though it just got a boost in those revenues.

But what rankles Fricke is a federal mandate to replace all hazard signs by 2012 with new reflective models, at an estimated cost of $55 million to $74 million, with the average cost per township estimated at $32,600 to $43,700.

"Whoever has a road authority has to do this," he said.

Sharon Koskela is a supervisor for Henrietta Township in Hubbard County who was stunned to see the cost estimates on replacing all stop signs, yield signs, directional signs and others.

"We'll have to come up with the money to do this, but I hope to God it doesn't cost that much," she said.

"This is a property tax increase the federal government had laid on our backs as a real bad time," Fricke said.

Koskela said all of Hubbard's townships struggle to juggle scarce funds to fix up roads.

"Everybody wants their roads fixed but we can't unless you bond to do it," she said. "With the way the economy is, you hate to do it."

Long-term indebtedness doesn't appeal to any small governments, she said. And townships have been struggling for years with declining funds and rising demands for services.

Effective July 1 and lasting for six years, townships will get about a bit less than 2. 5 percent of three motor vehicle registration, sales and fuel tax "set-asides" under a constitutional formula that distributes the funds to state and local governments for road maintenance.

Aside from road maintenance, Henrietta Township, which borders the city of Park Rapids, made some especially tough decisions two years ago when it agreed to a gradual annexation into the city of some of its subdivisions in four incremental steps.

"A lot of people still think we shouldn't have done it but we didn't have the money to provide sewer and water services" to the areas affected; some of the subdivisions were too concentrated to adhere to septic system guidelines. City sewer was the only solution, she said.

The meeting last week in Walker was informational and motivational.

State Auditor Rebecca Otto gave the officers tips on how to avoid common accounting pitfalls. Among them were:

n Using a township-owned computer to store meeting and business records on, rather than an officer's home computer.

n Taking accurate meeting records to document official business, but striking a medium between recording too much and too little.

n Keeping township offices segregated. Combining a clerk position with a township treasurer position will trigger a state audit, she warned, because there's too much potential for misuse of taxpayer funds.

n Using state software and fund balance guidelines to "keep your finances in good order." Otto acknowledged the financial software has been revamped because it had many problems. Statewide Web seminars will be held to train township officers in the use of the revamped software.

n Properly accounting for donations to fire departments and acknowledging contributions to volunteer firefighter relief associations as prescribed by Minnesota law.

Dep. Secretary of State Jim Gilman instructed the officers on election reforms in the wake of the Minnesota Senate race's lengthy recount. Precinct election judges will no longer have to inspect absentee ballot for validity. That will be a county function, he said.

"All the election judges will have to do is verify the person came in and voted," he said.

Other changes include financial help to accommodate disabled voters and moving the primary back to August so that overseas ballots can be counted in time to accurately reflect the winning candidates in the general election.

"We've got to get some money down to rural America," Fricke implored.