Davison County Commission confronts franchise tax confusionState regulators raise issues with process of revenue distribution.
By: Ross Dolan, The Daily Republic
The county commissioners acted Tuesday to correct the way bank franchise taxes are allocated in Davison County.
Franchise taxes are levied on a percentage of bank profits in each county statewide and are apportioned to schools, cities and townships within those counties.
In 2012, nearly $130,000 was shared among the various taxing entities in Davison County.
Auditor Susan Kiepke said her office received notice from the state Department of Legislative Audit that Davison County must correct the way it has been apportioning the franchise tax.
Kiepke said her office was following a precedent set by previous auditors and no discrepancies were noted in past county audits. The commissioners on Tuesday approved an updated way of apportioning franchise tax proceeds based on a 13-year average of how the funds have been distributed.
During that time the county collected nearly $1.8 million in franchise taxes.
“It might mean a few dollars difference here and there,” Kiepke said, “but it’s not going to make a huge dollar difference to recipients.”
Under the updated distribution plan, Davison County will get 25 percent of tax proceeds; Mitchell schools, 44 percent; the city of Mitchell, 14.2 percent; the city of Mount Vernon, 0.85 percent; the city of Ethan, 0.49 percent; Mount Vernon School District will get 7.5 percent; Ethan schools, 4.80 percent; Stickney schools, 0.34 percent; Parkston schools, 1.19 percent; and Sanborn Central schools, 0.09 percent. Smaller percentages go to townships in the county.
“Davison County was distributing the money (from the franchise tax),” said Russell Olson, local government audit manager with the Department of Legislative Audit said, “but the formula was not the most correct.”
Olson said counties are supposed to distribute the franchise money based on the “average personal property tax distributed to the entities between 1972 and 1976.”
The personal property tax was discontinued after that date, but the franchise tax formula has remained in state law. Many counties, including Davison, have legally discarded that information, he said, even though state law still requires the use of information from 40-year-old records.
“(Davison County) looked and looked but couldn’t find that information,” he said.
The new average allocation method approved by the commissioners is a reasonable estimate alternative, Olson said.
Kiepke predicted other counties will face similar problems with apportionment. He said auditors are lobbying to update the state law.
Sudrla to retire
After weeks of warning that his retirement was imminent, Zoning, Drainage and 911 Administrator Dan Sudrla pulled the trigger Tuesday and announced his retirement, effective April 19.
Sudrla’s note to the commissioners gave those details and added, “Thank you for 15 years and nine months of employment with the county.”
The commissioners reluctantly accepted the resignation.
“I’m sure going to miss him,” Commissioner Gerald Weiss said.
Commission Chairman John Claggett said he and Commissioner Denny Kiner have screened about 15 applications for Sudrla’s multifaceted job and will recommend two applicants for interview next week. “I’m pleased with how the application process has gone,” Claggett said. “We’ve got some qualified people to consider.”
Weight limits set
At the recommendation of Highway Superintendent Rusty Weinberg, commissioners approved the setting of spring weight limits on all county roads, effective next Tuesday.
The limit sets a 6-tons-per axle, or 80,000 gross vehicle weight (GVW), limit and a 40 mph speed limit for all trucks on all paved county roads except:
• 254th Street from the Aurora County line to Mitchell;
• 397th Avenue, from Interstate 90 to Mount Vernon;
• 403rd Avenue (Betts Road) from 254th Street to the unincorporated town of Betts;
• 403rd Avenue (Betts Road) from 255th Street to Interstate 90;
• 247th Street, from 405th Avenue to state Highway 37, which serves trucks delivering grain to Poet Ethanol in Loomis, will be posted as 8 tons per axle and 40 mph.
In a related matter, the commissioners discussed reports from area residents of overweight trucks on 254th Avenue. Weinberg said lanes on the highway are beginning to “dish,” or show evidence of excessive wear.
“It’s starting to wear and that’s one of the heaviest roads we’ve got,” he said.
Commissioner Denny Kiner directed Weinberg to call Highway Patrol Carrier Enforcement and request spot checks for overweight trucks.
In other matters, the commissioners:
• Approved placing a bridge located two miles southwest of Mount Vernon on a yearly inspection schedule with the engineering firm of Civil Design, of Brookings. Weinberg said bridge supports are starting to “rotate” and show wear. The state has not yet lowered the 40-ton limit on the bridge, but that might occur if deterioration progresses, he said. The 37-foot bridge is on 396th Avenue between 258th and 259th streets. It will cost about $80,000 to $100,000 to replace the bridge with a box culvert, Weinberg estimated.
• Decided, at the suggestion of Claggett, to add to next week’s agenda a discussion of the status of county-owned land south of the county jail. Claggett said the county should either have a plan for the property or sell it to get it back on the tax rolls.
• Approved a $30,000 road striping agreement with the state Department of Transportation for painting stripes on 41 miles of county road. The county’s share of that agreement will be $17,000.
• Discussed 4-H adviser Alice Nickelson’s request for a new copy machine. Nickelson presented the commissioners with three, five-year leasing options, all of which were more expensive than an outright copier purchase. The commissioners will consider purchase options next week.
• Noted the absence of Commissioner Kim Weitala. She was attending a management meeting for her day job, Kiepke said.