Scott County posts favorable year-end variance but repays $300,000 to state for prior grant overpayment

Scott County's finance director told the board May 19 that the county ended 2025 with a $4.9 million favorable variance, largely attributable to investment earnings, but that a reconciliation requiring a just-over-$300,000 repayment to the state reduced that position.

Steve Jones, the county finance director, said the repayment stemmed from an excess payment the county received in 2022 for a developmental health initiative after state allocations were adjusted. He said several counties experienced similar reconciliations and that new state systems should reduce such errors moving forward.

Why it matters: The repayment and continuing tax-petition activity affect near-term revenue projections. Finance staff recommended monitoring petition trends as they can create multi-year liabilities — a pattern that in 2025 resulted in roughly a half-million-dollar impact related to previous property-value increases.

Other financial highlights from the presentation

- Investment earnings have remained a favorable variance with short-term maturities and notable holdings in money-market accounts; Q1 yields were reported in the 3.5%–3.7% neighborhood.

- Rising fuel prices have created an estimated $225,000 unfavorable variance for 2026 so far (every quarter fuel increase costs Scott County roughly $75,000).

- The county plans restricted fund use for construction of a regional household hazardous-waste facility in Lakeville in partnership with Dakota County; that commitment will reduce the county’s fund balance but is a planned, restricted expenditure.

Board response and next steps

Commissioners asked for continued monitoring of tax-petition trends and clearer budget assumptions for 2027. Finance said staff will include petition projections and the final results of the recent legislative session in the upcoming budget-preparation materials. No formal fiscal votes were taken at the meeting.