Townships: to give or not to give?

Brian Larsen

Can they or can’t they?

The question seemed simple enough: Can the three West End townships of Lutsen, Tofte and Schroeder each give financial donations to help the financially strapped Birch Grove Community School located in Tofte?

Over the course of the last year attempts to get the matter straightened out have led to a confusing tangle of information as different attorneys and government officials have weighed in with a myriad of conflicting opinions, none of which led to a straight answer.

Last March at the township’s annual meetings, residents of each of the townships voted to give the charter school $20,000—a total of $60,000—for the 2015 school year.

This led some township residents to feel that they were being taxed twice for the school, and they sent letters to Jeff Reed, an attorney for the Minnesota Office of the State Auditor (OSA), asking if this was legal.

The matter came to a head on May 31, when all three townships received a letter signed by Reed asking for details about their policy about donations.

In an attempt to get final clarification, the township of Tofte hired Chris Virta, a Duluth-based attorney with Fryberger, Buchanan, Smith & Fredrick, P.A. On June 9, Tofte supervisors along with members of Schroeder and Lutsen town boards met with Virta.

It wasn’t just the letter from the Auditor’s Office that had them seeking a definitive answer; the townships had held back $35,000 of the $60,000 to the school due to concerns about the legality of the contributions—which if granted could have legal implications for each of the supervisors.

The supervisors also wanted an answer for Birch Grove Community School Executive Director Caroline Wood at the special meeting, who said the charter school would shut its doors for good if those funds were not available by June 30, so time was of the essence.

Virta told the supervisors that no matter what the final determination would be from the state about previous donations to the school and other nonprofits like Cross River Heritage Center or W.E. Connect, a program run by the Birch Grove Foundation at Birch Grove Community Center, individual supervisors wouldn’t be in trouble because of all of the efforts they had made to get straight answers to their questions.

But Virta also said it would take time to unravel the different statutes that seemed to say yes—and then no— to townships giving money to a charter school, and he advised Tofte to not release its donation to Birch Grove until a final determination could be made.

The special meeting ended with Virta headed back to Duluth to dig into solutions for the townships and Wood left to wonder if the money would ever come to the school.

Schroeder agrees to give $10,000 to Birch Grove

Following that meeting, just hours before the Schroeder town meeting on Tuesday, June 14, Schroeder Supervisor and Board Chair Tina McKeever received word from District 10 Minnesota Association of Townships (MAT) township representative Jim Fisher who said it was okay for Schroeder to release the last $10,000 of its $20,000 donation to Birch Grove.

McKeever said Fisher has been working with Senator Tom Bakk’s office, and in an email to McKeever he stated, “Just got a letter from Senator Bakk’s office from the Department of Education—giving us the Minnesota Statute that we can gift the money to the school.”

Senator Bakk had been contacted by Dr. Tom Melcher, Minnesota Director, Division of School Finance who made a determination about Minnesota Statute 124E.24, paragraph (b) which states, “Notwithstanding paragraph (a), a charter school may not receive aid, a grant, or revenue if a levy is required to obtain the money, or the aid, grant, or revenue replaces levy revenue that is not general education revenue, except as otherwise provided in this chapter.”

Paragraph (b) had been a sticking point for the townships and caused them to hold up on releasing their final gifts to Birch Grove.

Melcher’s reply to Bakk was as follows, “Paragraph (b) does not prohibit a charter school from accepting a gift from a local government if the local government made a levy which provides a resource to make the gift.

“Paragraph (b) was written as an exception to paragraph (a) which makes a charter school ‘eligible to receive other aids, grants, and revenue according to chapters 120A to 129C, as though it were a district.’

“Under the language of paragraph (b), charter schools do not qualify for revenues that school districts receive from local levies, other than general education levies. Examples include safe schools levies, reemployment insurance levies, and various community education levies.”

Before the vote taken by Schroeder supervisors to release the money, McKeever told them that the specific language wouldn’t legally be changed in the statute until next year when the legislators met in session again.

This led to a response from community member Edna Granlund who said that she had talked with both Governor Mark Dayton and former Vice President Walter Mondale who advised her that until the statute was changed the township shouldn’t give the money to the school.

“I talked to the governor and he said you have no right to give the money. You can’t go on ‘Bakk talk.’ I’m telling you what the governor said. You can’t give the money. I think the governor is above all of this. I also talked to Walter (Fritz) Mondale. Fritz agreed, until the statute is changed, you can’t give the money to the school,” Granlund said.

McKeever, who had talked to Granlund earlier, said she had passed that information on to Senator Bakk and the various people connected to the issue. The board took a vote then on a resolution to give the $10,000 to Birch Grove charter school with Roger “Bill” McKeever and Tina McKeever voting for the donation and Bruce Martinson abstaining from the vote because his wife works at the school.

The board also voted to retain attorney Chris Virta at a sum not to exceed $500. Virta will work with Senator Bakk’s staff on behalf of the West End townships concerning policies for contributing to non-profits.

Tina McKeever said the township had asked for and received an extension from the State Auditor’s Office June 17 deadline and has until June 30 to answer the questions posed about its donations.

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