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Wright County Board, state auditor react to lawsuit ruling
Sept. 9, 2016

BY GABE LICHT
Editor

BUFFALO, MN – Following passage of a law that allows counties to hire a private audit firm, State Auditor Rebecca Otto filed suit against the counties of Wright, Becker, and Ramsey for opting not to sign a three-year contract with her office for auditing services.

Wright County Chief Deputy Attorney Brian Asleson shared the Ramsey County District Court’s decision with the Wright County Board Tuesday.

“Our attorney, Scott Anderson, characterized it as an almost complete victory for the counties,” Asleson said.

While Anderson had argued auditing counties was not a core function of the state auditor’s office, according to the Constitution, the court disagreed.

However, “the court decided that they can still exercise their core function under the new statute because they do have the ability to supervise the audit of counties even if we have our audit done by a private auditor,” Asleson said.

The court ruled in favor of the counties on other points, as well.

“The new statute does not violate the separation of powers clause in the Constitution, which means the state legislature is not taking away the power of the state auditor, but simply modifying it, which is allowed,” Asleson said. “The court found that the new law did not violate the single subject clause in the Constitution, where legislative bills are supposed to be a single subject. Even though it was a wide-ranging bill, it was a state operations bill. The activities of the auditor’s office and how it affects counties is an appropriate subject for state regulations.”

Asleson estimated Wright and Becker counties split more than $50,000 in legal fees defending the state statute, while “Ramsey County showed up in hearings, but took no position.” Asleson surmised that Ramsey County had been named in the lawsuit so the case could be tried there.

Assistant County Attorney Greg Kryzer said the auditor’s legal expenses for the case were reported to be more than $200,000, and Chair Pat Sawatzke estimated them at closer to $300,000.

Commissioner Charlie Borrell asked if Wright County’s legal expenses could be reimbursed.

“That’s not likely,” Asleson said. “Usually, that’s in cases of bad faith or that type of thing. I would say in any case where there’s legal questions of ‘What does this law mean and how does the Constitution affect the law?’ generally, those things aren’t bad faith lawsuits.”

Borrell also asked why individual counties were sued, rather than the legislature that passed the law. Asleson said he was not too familiar with lawsuits challenging state legislation, but noted that individual legislators have intervened when counties have been sued in the past, though that was not the case in this instance.

Regardless, Borrell said the outcome of the case will save Wright County taxpayers money because “having the state auditor do our audit this year and next year will probably cost $20,000-plus more than it would have for an outside auditor like CliftonLarsonAllen.”

“In a couple years, we’ll have our money back,” Sawatzke added.

He also invited Otto to meet with the board.

“If Miss Otto would like to come out and apologize, we’d be happy to have her,” Sawatzke said.

That is unlikely.

In an issued statement, Otto said her office disagrees with the court’s decision to permit counties to hire private CPA firms to conduct initial audits.

“It will result in an unacceptable diminishment of the protection this constitutional office provides on behalf of the taxpayers of this state,” Otto said. “As a result, to fulfill my oath of office and duty to both current and future taxpayers, I will appeal the court’s decision.”

Odds and ends
In other business, the board:

• tabled a five-year agreement with OpenGov so the technology committee can review it again. Commissioners questioned paying for the ongoing program, at a cost of about $22,000 annually, through the capital improvement project fund. Commissioner Mark Daleiden also said he would like the initial commitment to be shorter, though Auditor/Treasurer Bob Hiivala said the county would receive a discount in return for the five-year commitment.

• approved the MN.IT Cyber Security Monitoring Grant Memorandum. It is a three-year agreement, with the first two years fully funded by the state and the county taking over responsibility for maintenance of firewalls in the third year.

• approved changing the county’s benefit carrier for short- and long-term disability insurance from Assurant to Madison National. For short-term disability insurance, the county will see a 17 percent decrease in core coverage and no increase in premiums for the voluntary buy-out coverage, and for long-term disability insurance, the county will see a 15 percent decrease in premiums for core coverage and a 14 percent decrease in premiums for voluntary buy-out coverage.

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