Despite the best efforts of commissioners, elected officials and county staff, Wadena County’s financial condition continued to worsen during the past five years.

At the Dec. 17 county board meeting, Bob Johnson from the Moorhead district office of the Minnesota State Auditor presented his findings after a thorough audit of the county’s 2008 financial statements and reports and a comparison of finances over the past five years.

“Wadena County is in the worst shape of the ten I do out of the Moorhead office,” said Johnson, in response to a question from Commissioner Lane Waldahl. Waldahl asked whether other counties’ financial conditions were also declining.

“Mahnomen County is in pretty bad shape as well,” Johnson said.

There is nothing illegal going on and no money is missing. The county is doing its best with a small staff of people to manage the accounts that are kept. Johnson said that the audit revealed no problems that needed to be reported to the state. He said that his audit resulted in “unqualified opinions”, which means that the county auditor is doing a good job.

But, he said, the county does not have enough money on hand, according to state guidelines for the keeping of reserves and healthy fund balances.

The first reason for Johnson’s grim assessment of Wadena County is found in the county’s fund balances. Each county has three major funds that it uses to separate and hold different types of revenues it receives.

These funds are the General Fund, the Road and Bridge Fund and the Social Services Fund.

Five cate gories of money are tracked for each fund: revenue, expenditures, cash balance, fund balance and unreserved fund balance. In Wadena County’s case, revenues and expenses have steadily increased since 2004, while cash balance, fund balance and unreserved fund balance have steadily fallen.

The second reason for Johnson’s concern is that the Minnesota State Auditor recommends that counties keep on hand 35 percent to 50 percent of the money needed for six months of operating revenues.

Wadena County has reserves of 3 percent, 12 percent and 2 percent for its three funds. This is a dire situation for the county, because it means that there is not enough money set aside to allow the county to keep its financial commitments for six months during any kind of emergency when taxes or state funds do not come in.

“You don’t have the tax base that other counties do,” Johnson explained. The county lacks significant numbers of expensive homes, a strong tradition of tourism and large commercial businesses.

Wadena County is not bringing in enough property tax revenues to support the services it must provide. It can’t raise taxes significantly because the Minnesota Legislature passed a law limiting the amount that a county can levy. That amount is not enough to pay for the county’s expenses, now that Governor Pawlenty has reduced county program aid.

There seems to be no clear way out of the current situation.

“We’re used to being poor,” commented Board Chair Dave Schermerhorn.

Comm. Waldahl wrapped up the discussion with his summary: “We don’t have any money and we’ve got to make it up.”

In other business, the board –

o APPROVED the hiring of three permanent employees for the Solid Waste Department.

o APPROVED Parks Director Deana Skov’s attendance of meetings at the Greater Minnesota Regional Parks and Trails organization.

o APPROVED the low bid of Duininck Construction at $363,686 for a federal bridge replacement project (Bridge 269) over the Partridge River.

o TABLED again the issue of Interim Highway Department Head Jeff Adolphson’s compensation for temporarily filling the position of department head.

o AGREED to make a doorway in the wall between the Jury Assembly Room and Court Administration, so that Court Administration personnel can use the Jury Assembly Room space for offices. Judge Sally Ireland Robertson said that the Jury Assembly Room is too small for its stated purpose and that the courtroom could be used for jury assembly during the four or five jury trials held each year.

o AGREED to hold a public hearing on Jan. 21, on the Revised Solid Waste Ordinance.

o APPROVED the Otter Tail-Wadena Solid Waste Agreement

o AUTHORIZED the sending of second notices to garbage dumping violators, before turning their cases over to the sheriff’s department for charges to be brought.

o LEARNED that the changes made in the Solid Waste Department procedures by consultant Mike Gibson will save the county over $100,000 per year every year.

o AGREED to advertise for a full-time County Engineer beginning Jan. 5, 2010.