Auditor: State, not the historical society, should control preservation office

March 1, 2018 GMT

It was appropriate to move the State Historic Preservation Office (SHPO) from the independent Minnesota Historical Society to the state’s executive branch because it has regulatory authority that can affect development projects, the legislative auditor has concluded.

However, in a report issued Wednesday, Legislative Auditor James Nobles didn’t evaluate the overall performance of SHPO nor take sides in the controversial move last year that was preceded by the governor’s staff criticizing the historical society’s work in overseeing the preservation office.

The Legislature voted to move SHPO to the Department of Administration at the request of Gov. Mark Dayton, whose staff said the move would reduce “inefficiency and improve accountability.”

The auditor’s report backs that analysis, saying that SHPO should be directly accountable to officials in the executive branch rather than nestled within the historical society, a nonprofit that’s aligned with the state but independent of its reach.

“SHPO has assumed de facto decisionmaking authority in a federal regulatory process that can add costs to certain development projects,” according to the report.

Stephen Elliott, the historical society’s CEO, had objected to the move and disagreed with accusations of inefficiency in SHPO’s operations. The preservation office had been under the auspices of the historical society since it was formed in 1969.

SHPO works with federal agencies to enforce the 1966 National Historic Preservation Act and administers federal grant programs.

The preservation office, in conjunction with federal authorities, reviewed more than 3,000 development and infrastructure projects in 2016 to ensure that historic and cultural sites were identified and protected. It found issues requiring mitigation or additional planning in fewer than 1 percent of the cases, Elliott said.

Dayton and some lawmakers had cited two recent instances, including the PolyMet mine project in northern Minnesota, where they believed SHPO — then under the historical society’s control — had delayed the work.

“While we gathered information and opinions from both sides — PolyMet and SHPO — we are not able to render a definitive judgment on which side is ‘right.’ Moreover, we think the conflict between PolyMet and SHPO ... reflects the organizations’ conflicting objectives and responsibilities,” the report says.

But the auditor noted that in both public testimony and interviews, people “often expressed frustration with SHPO’s lack of transparency and slowness in responding to information requests.”

In a letter to Nobles dated Wednesday, Elliott wrote: “Since there have been very few complaints or issues about the work of [SHPO] in the nearly 50 years that it has been housed at [the historical society], we are disappointed that a detailed and thorough policy analysis was not completed before the legislation was passed to transfer” SHPO.

The dust-up occurred just months after the historical society had taken a stand against Dayton over the return of Civil War paintings to the newly renovated State Capitol. Dayton’s staffers said that did not play a role in the decision.

The Minnesota Historical Society is a nonprofit that, while independent of the state, relies on it for nearly 60 percent of its $60 million-plus annual budget. About $2 million of that went to run the preservation office.

Shannon Prather • 612-673-4804