Auditor Blaha Releases 2021 Special District Finances Report - August 3, 2023

Saint Paul, MN – “Special district finances are returning to historic levels,” said Auditor Blaha.

In Minnesota, special districts represent the types of ways in which local governments can work together to provide services in an efficient manner.

“Special district enterprises relying on user fees and charges for services showed a significant improvement in their bottom line,” added Auditor Blaha. “Specifically, hospital districts were able to reduce operating costs."

Minnesota has over 600 special districts that provide clean water, transportation, public safety, health, housing, and other services to residents. Special districts are local government units created or authorized by state law to perform specific duties or to provide specific services in a limited scope.

The Report was compiled from 2021 special district reporting forms, financial statements, and audits. Special districts in Minnesota end their fiscal years at different times. This report covers the special districts with fiscal years that ended between July 1, 2021 and June 30, 2022 (FY 2021).

The primary sources of revenues for special district governmental funds were state grants, taxes, federal grants, and charges for services. In addition to governmental funds, many special districts establish enterprise funds to account for services that are financed and operated in a manner like private business enterprises.

Executive Summary

• Special districts reported total governmental fund revenues of $1.3 billion in 2021. The primary sources of revenues for special district governmental funds were state grants (33 percent), taxes (19 percent), and charges for services (17 percent).
• Special districts reported total governmental expenditures of $1.3 billion in 2021. Of this amount, $1.1 billion were current expenditures, $107.6 million were capital outlays, and $102.8 million were debt service payments.
• In 2021, special district enterprise operations reported operating revenues of $2.2 billion, operating expenses of $2.8 billion, and operating losses of $665.2 million (operating revenues minus operating expenses). In addition, special district enterprises had nonoperating revenues of $986.6 million, nonoperating expenses of $223.3 million, and a net profit of $80.1 million. Nonoperating revenues include sources such as taxes and intergovernmental grants.
• Special districts reported $5.6 billion in governmental and enterprise fund outstanding long term debt (bonds and other long-term debt) in 2021.
• Of the 158 special districts that held long-term debt in 2021, four special districts accounted for $4.5 billion, or 81 percent, of the total outstanding long-term debt of special districts. The four special districts, in order of outstanding long-term debt, were the Metropolitan Council, the Metropolitan Airports Commission, the Western Minnesota Municipal Power Agency, and the Southern Minnesota Municipal Power Agency.

The full report is available on the OSA website.

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