Despite the challenges posed by COVID-19 and a somewhat disappointing result at the legislature, townships across the region are expressing relative confidence in their financial situation.
The 2019 Minnesota Town Finances report, released earlier this month by State Auditor Julie Blaha, shows increases in township revenues, expenses and debt. In total, expenditures increased by 13.4% while revenues did so by just 5.4%. Blaha’s report provides basic financial information for each individual township, of which there are more than 1,700 in Minnesota and 14 in Rice County. According to the report, townships across the county spent slightly more than they took last year.
By far the largest expenditure, about 60% of the total, came in the area of road maintenance and construction. Other expenses were related to public safety, including contracts with local fire departments and for equipment purchases.
Bridgewater Township has by far the largest budget of any township in Rice County. Township Supervisor Glen Castore noted that Bridgewater’s budget is boosted by the presence of the county landfill, for which the county pays a hosting fee. Still, Bridgewater’s budget overall is stable enough that despite several road projects this year that have resulted in an increase in expenditures, Castore anticipates that the township won’t have to use reserves in 2020.
The township remains in the black despite its larger budget because its Board of Supervisors takes a cautious approach to budgeting. Castore said that the Board traditionally takes a conservative estimate of revenues that typically underestimates them slightly.
While Bridgewater ended 2019 nearly $300,000 in the black, other townships had a rougher time financially speaking. Morristown Township, for example, spent $284,000 while bringing in revenues of less than $200,000.
Township Supervisor Dan Morris attributed that deficit to a wet spring that caused issues on many town roads. By contrast, 2020’s expenditures have been more in line with what was anticipated, though elections were more costly than most years due to COVID.
A few townships are also working to pay down debt. In Wheatland Township, for example, the need to replace a road grader several years ago has left the township with a substantial amount of debt, noted Township Clerk Jim Duban.
Aside from that, Duban said that the Township’s Board of Supervisors have been careful to keep tabs on spending and avoid dipping into reserves. The township ran a narrow surplus last year, according to Blaha’s report.
“We watch our money pretty closely and don’t spend beyond our means,” he said.
For townships struggling to maintain their roads, local Sen. John Jasinski had a proposed solution. Working with the Minnesota Association of Townships, the Faribault Republican introduced a bill to create a Township Road Improvement Grant program. Jasinski proposed starting the program with $8 million in seed money, with an advisory committee composed of township officials and engineers responsible for considering proposed projects and distributing funds to those of greatest need.
In Woodville Township just outside Waseca, for example, the township is still dealing with the aftershocks of flooding several years ago that damaged much of its 45 mile road network. Supervisor Bernard Frederick said that despite the extreme need, funding has been hard to get.
“We have a long way to go,” he said. “There’s roads that are still very much in need of repair and we have to take it one step at a time.”
In the end, the bonding bill passed by the legislature didn’t establish that new program but did provide $75 million for Local Road Improvement Fund Grants and earmarked at least $5 million of that for Township roads.
Jasinski promised to continue working on the program in the coming years, as did his DFL colleague Sen. Nick Frentz, of North Mankato. Frentz said that he, too, believes that township roads are underfunded but that with $5 billion in requests, the proposal unfortunately fell through the cracks.
“Many of us felt it was a good idea, but it had to compete with a lot of other good ideas,” he said.
Minnesota Association of Townships Executive Director David Hann said that townships should still apply for that grant money, but said the association was disappointed to not see its original proposal make its way into the final bonding bill.
“We think there is a need for a specific program to help township roads,” he said. “It’s an unfair burden for our townships to have to bear the cost of fixing township roads.”
Hann noted that the presence of extremely heavy vehicles has resulted in a dramatic increase in wear and tear on township roads not engineered to handle those levels of stress. Yet even as needs have continued to increase, he said the $5 million earmarked specifically for township roads is smaller than in previous years.
Townships traditionally operate on small budgets funded primarily by local taxpayers and written by fiscally conservative township officials. Nonetheless, Hann noted that the 55,000 miles of roads they operate are crucial to Minnesota’s economy.
“They don’t get a lot of traffic, so vehicles per mile is very low,” he acknowledged. “But if you think about it, the first mile that every natural resource takes in our economy is on a township road so it’s a vital link.”