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RELEVANT LINKS: League of Minnesota Cities Information Memo: 7/18/2016 Public Purpose Expenditures Page 2 • The activity will benefit the community as a body. • The activity directly relates to functions of government. • The activity does not have, as its primary objective, the benefit of a private interest. R.E. Short Co. v. City of The Minnesota Supreme Court has recognized that an incidental benefit of Minneapolis, 269 N.W.2d the activity to a private interest does not, per se, deprive the activity of its 331 (Minn. 1978). public nature, if the primary purpose of the act is public. City of Pipestone v. Madsen, 287 Minn. 357,178 N.W.2d The Minnesota Supreme Court further clarified that activities that promote 594 (1970). the following objectives for the benefit of all the city's residents further a public purpose: • Public health • Safety • General welfare • Security • Prosperity • Contentment By no coincidence, these interests also represent the foundation of all legitimate council actions. Councilmembers are elected or appointed to govern by and for these interests, acting as specialists on what best serves the local population. Therefore, a council's written determination of a valid public purpose based on reasonable findings of fact, along with the advice of the city attorney, should not be underestimated. Abrahamson v. St. Louis Sch Dist., 802 N.W.2d 393 Attorney general (AG) opinions provide guidance in analyzing the validity (Minn. App. 2011), affirmed of a public expenditure. However, the AG opinions are not legally in part and reversed in part in Abrahamson v. St. Louis binding, and courts make the final decision. Judicial review focuses on (1) Cnty Sch. Dist. 2142, 819 whether the expenditure benefits the community as a whole; and (2) N.W.2d 129 (Minn. 2012). whether the expenditure relates to the functions of government. A city could face the following problems when the validity of a city expenditure gets challenged: Walser .4uto Sales r. cin- of Richfield, 635 N.W.2d. 91 • Taxpayer lawsuits. Depending on the outcome, a council may have to (Minn. App. 2001) (taxpayer cover the expense of defending itself in a taxpayer lawsuit and, if the lawsuit). taxpayer wins, dealing with a court finding the expenditure in question illegal. Personal liability for the expenditure might also fall upon the individual councilmembers in some situations since they have a fiduciary responsibility to spend the public's money for a public See generally, State purpose. Auditor's Statements of • Non-compliance finding by the state auditor. The state auditor has the Position. authority to find that the city made an unauthorized expenditure of public funds. This could result in future special audits and embarrassment for the city. League of Minnesota Cities Information Memo: 7/18/2016 Public Purpose Expenditures Page 2