Auditor’s lawsuit against county goes to MN Supreme Court

By Nathan Bowe

Becker County taxpayers can expect to pay perhaps another $18,500 to defend the county against a lawsuit filed by State Auditor Rebecca Otto.

The DFL state auditor sued Becker, Wright and Ramsey counties for using private auditors to conduct their annual financial audit. The counties acted under a Republican-written 2015 law that allows counties to hire private firms instead of using the State Auditor’s Office.
More than 40 counties opted to take advantage of the law, and Otto sued Becker, Wright and Ramsey counties. She has declined to give a reason for filing suit against only three counties, saying she can’t discuss her office’s legal strategy. Otto’s office has paid more than $250,000 for the lawsuit so far.

So far, Becker County has spent about $55,000 defending itself against the lawsuit, including what it spent after Otto appealed a district court’s ruling to a state appeals panel.

“Our share of the bill for appeal was around $18,500, I don’t expect the next appeal to the Supreme Court to be any more than that,” said Becker County Administrator Jack Ingstad.

Becker County and Wright County jointly hired attorney Scott Anderson to defend them in the lawsuit. Ramsey County has conducted its defense separately.

The Minnesota Legislature voted this year to reimburse the three counties for their legal expenses, agreeing with the argument made by Rep. Paul Marquart, DFL-Dilworth. “It is basically these three counties defending a state law … for all 87 counties,” Marquart said. “It is fair to spread it statewide.”

Lawmakers provided the counties reimbursement for their costs for litigation, however, it was in a larger bill that was vetoed by the governor.

Now the reimbursement funds are caught up in the larger legal battle between the governor’s office and the Legislature. In a first-ever move in Minnesota, the DFL governor vetoed funding for the Republican-controlled legislature after what he called “last-minute legislative treachery.” The Legislature inserted a provision in a budget bill that would withhold funding for the Department of Revenue unless the governor signed its package of tax cuts.

Gov. Dayton said the move improperly threatened his executive power. Republican Speaker of the House Kurt Daudt called the measure “an insurance policy” to prevent Dayton from vetoing the tax package, as he did last year.

Now the Legislature has sued and the courts will decide.

Meanwhile, Ingstad said, “the original claim that we presented to the special legislative committee for reimbursement has been postponed due to the matter being addressed by the legislature this year. So we will have to wait and see what happens.”

In September, Otto lost in district court, but she appealed to the state Appeals Court, saying that under the state Constitution only the state auditor can decide who audits county books.

The state Court of Appeals upheld the lower court’s ruling that the legislation was constitutional on a 2-1 decision.

Otto’s attorney, Joseph Dixon III, has argued that the law “gutted” the core function of his client’s office.

“This is transferring core executive function outside of executive departments,” Dixon said.

Otto previously told a House finance committee she sued in order to keep auditing local governments, which she sees an essential part of her office.

For Becker County, it’s a matter of money. The county has been authorized to use private auditing firms in the past, and they can cost less than half as much as the $87,000 charged by the state to do the same thing.

-Forum News Service