State Auditor Issues Report on Townships

COMPILED BY REBECCA KOMPPA

     The Office of State Auditor released its annual report on the revenues, expenditures and debt of Minnesota’s towns recently. The report covers the fiscal year ending December 31, 2006. The towns of Nevis, North Germany and Spruce Grove failed to comply with statutory reporting requirements in time to be included in the auditor’s report.
     Towns – more commonly referred to as townships – are the most common, grassroots form of municipal government in Minnesota. In 2006, there were 1,789 towns (compared to 853 cities) with an estimated 952,686 individuals or about 18.2 percent of the state’s estimated population residing in them. Township size in 2006 ranged from 11,752 residents in the Town of White Bear to just seven in the Town of Hangaard, with 50 percent of the towns having a population of 300 or less. Locally, Huntersville with a population of 133 was the smallest town in 2006; Wadena Township with an estimated population of 962 was the largest.
     Minnesota has 13 economic development regions, and the towns in our vicinity fall into three different regions. Wadena County, along with Todd, Cass, Morrison and Crow Wing counties, is in the North Central region. Otter Tail and Becker counties are in the West Central region with Clay, Wilkin, Traverse, Grant, Douglas, Stevens and Pope counties. Hubbard County is in the Headwaters economic development region, along with Beltrami, Clearwater and Mahnomen.
Fiscal Year 2006 Revenues
     In 2006, Minnesota towns reported total revenues of $236.8 million, which represents a 3.0 percent increase over 2005 revenues. The three major components of revenue for towns are local taxes, intergovernmental revenues (such as LGA) and charges for services.
     Towns reported tax revenues of $159.1 million in 2006, a 5.6 increase from 2005. Revenue from taxes has increased every year over the past five years. Between 2001 and 2006, the increase in the share of total revenue from taxes mirrors the decrease in the share from intergovernment revenues.
     In 2006, intergovernmental revenues remained unchanged over the previous year, a reversal in the trend observed in recent years. Intergovernmental revenues decreased every year from 2001 to 2005 before becoming flat in 2006. The reversal in the trend is partly attributable to an 87.2 percent increase in federal grants and a 62.4 percent increase in county highway grants.
     Revenues earned from charges for services also decreased in 2006. Charges for services totaled $9.0 million, representing a 1.3 percent decrease from the charges for services reported in 2005.
     Breaking the statistics down further, the North Central economic development region, which includes Wadena County, had town revenues of $19.9 million, a 9.2 percent increase over 2005. West Central, which includes Otter Tail and Becker counties, had revenue increase 4.7 percent to $25.3 million. The Head­waters region, which includes Hubbard County, saw town revenue increase 36.3 percent to $10.1 million. For the statistics on individual towns, see accompanying charts.
Fiscal Year 2006 Expenditures
     Expenditures for towns include current expenditures and capital outlays for roads and bridges, general government, fire, all other public safety and all other expenditures. Debt service principal and interest payments are also included in total expenditures for towns.
     Minnesota towns reported total expenditures of $244.5 million in 2006. This represents an increase of 5.5 percent over 2005. Of total expenditures, $193.9 million was for current expenditures, $38.2 million for capital outlay, and $12.3 million for debt service payments.
     Expenditures for roads and bridges totaled $133.4 million in 2006. Of this total, $107.1 million was for current expenditures and $26.3 million was for capital outlays. Expenditures for roads and bridges increased each year between 2002 and 2006, whereas expenditures for general government and fire have remained relatively constant during the same five-year period.
     Capital outlays are expenditures used for the acquisition or construction of cap­i­tal assets, such as buildings and roads. Town capital outlays total $38.2 million in 2006, a 1.8 percent decrease from 2005. The largest category of capital outlays for towns was roads and bridges.
     Debt service expenditures are the principal and interest payments on outstanding indebtedness. Towns had debt service expenditures of $12.3 million in 2006, a 15.6 percent decrease from 2005.
     Total outstanding indebtedness decreased by 4.9 percent from 2005 to 2006 and totaled $76.9 million. Out­standing bonded indebtedness total $44.9 million in 2006, a decrease of 7.8 percent from the $48.7 million outstanding in 2005. Other long-term debt increased by 2.0 percent from 2005 to 2006 to total $31.2 million. In addition, towns reported $771,146 in short-term indebtedness in 2006, an increase from the $290,943 reported in 2005.
     In the North Central region, total expenditures increased by 8.0 percent and totaled $19.7 million. Debt service also increased by 14 percent to $1.1 million. In West Central, total expenditures decreased by 0.4 percent to $26.6 million, and debt service also decreased 16.9 percent to $2 million. The Headwaters region had expenditures increase 29.1 percent to $9.3 million, while debt service decreased 70.6 percent to $134,381. See accompanying charts for individual town statistics.