Legislation Would Charge Cities For Using City And Town Accounting System (CTAS)

The State Auditor has introduced a bill that would require cities using CTAS to pay a user fee.
(Published Feb 5, 2013)

Small cities and townships file audit reports with the State Auditor using the City and Township Accounting System (CTAS). Cities are currently not charged for using the software, but that would change if SF 255 (Sen. Saxhaug, DFL-Grand Rapids) becomes law. The bipartisan bill is being introduced on behalf of the State Auditor, who requested authority to charge a user fee to entities that use the software. The revenue from the fee would be used to pay for a necessary upgrade of the software. The bill requests a one-time appropriation of $250,000 to pay for the upgrade, and the user fees would be deposited in a special revenue fund to repay the state for the upgrade costs. After the upgrade is completed, the fees would go into the fund to pay for the “development, maintenance, and distribution” of the software.

Currently, approximately 320 cities and 1050 towns use the software. The bill does not establish an annual fee, but the State Auditor has indicated it would be approximately $300 per year.

The software has not been upgraded in many years, and updates to operating systems may make the software unusable. There are no cost-effective alternatives on the market for cities. The League has not taken a position on the bill, although it is concerned about forcing cities to bear additional costs to meet state-mandated audits. It is clear that the software must be upgraded, and that the funds to do so must come from somewhere. The League will work with the State Auditor and interested legislators on this legislation.

Questions? Contact Patrick Hynes at phynes@lmc.org or at 651-281-1260 or Gary Carlson at gcarlson@lmc.org or at 651-281-1255.

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