The City of Rushford’s financial position is looking healthy overall. Auditor Jason Boyton, of Smith Schafer & Associates, dialed in to the virtual meeting May 11 to present the detailed findings. While a bit of a challenge, but all pertinent information between city hall and auditors was done remotely this year.
The city’s tax levy was $936,000 in 2019, up $23,000 from the previous year. The increase was noted because of changes in operating expenses in the library, EDA, Capital Projects, and General Fund, as well as a reduction in debt service to 2009 and 2016 improvement projects. Roughly 56% goes to operations, while the remaining 44% is earmarked capital projects debt service.
The General Fund allotment is just over $350,000 and Boyton noted one reason for the 37.5% increase in it was lack of increases in state aid, which remained flat in 2019. “LGA is not increasing at any level of inflationary rates; not hardly at all,” he said. The good news for 2020 is that Local Government Aid is (LGA) expected to increase more than $23,000 for 2020. In all, the vast majority of city revenue continues to be property tax levy, with LGA, user funds, and Tax Increment Financing districts making up the remainder.
On the expenditure side, Boynton stated there hadn’t been much for changes in the last seven years. General governmental costs were up just 7% due to reallocated employee costs at city hall. The police department was up 11%, but is still well within the averages for comparative police services, sitting at roughly half the costs of Chatfield and Caledonia, and lower than Preston. While fire department expenditures were significantly lower in 2019, Ambulance Fund costs were up $52,697 mainly for Capital Outlay funded equipment upgrades. Both Public Works and Park and Recreation remained relatively unchanged.
Airport expenditures, particularly Capital Outlay, were significantly higher in 2019, largely due to a pavement improvement project and unplanned fire clean-up costs and repairs following the October 26 fire which claimed one hangar and damaged another building. In all the fund expended $218,853 last year, a change of more than roughly $175,000.
The Library Fund was up slightly, accommodating a retirement of a long-time employee. However, it was noted that a returned donation of $68,508 was not included in 2019 expenses. The donation was returned, by donor request, because the new library project didn’t come to fruition.
When comparing the General Fund budget to actual expenditures, the city was on the mark, ending the year under budget by $18,810. The General Fund Reserve balance continues to hover at 100% of General Fund Expenditures. “It’s how much you have on hand relative to operations,” explained Boynton. “From a cash flow perspective, it’s important to remember that you do have to fund general fund expenditures for six months prior to any revenues coming in every year. Also, for bond rating agencies, this is a key metric. You’ve made a concerted effort to build that up.” In 2012, the city’s reserve balance had dipped to just 12% of expenditures, but the amount has grown steadily since.
Debt service for the city is up slightly with the addition of the 2019 Improvement Project. In all, general obligation bonds equal $6.475 million, while revenue bonds, supported by utility rates, total just over $3.3 million. Most importantly, Boynton noted that all bonds are being paid in a timely manner.
In Capital Projects, more than $488,000 was expended in 2019 for a myriad of needs including engineering of streets, the levee, the westerly area development, the canoe launch, bike trail, and the Highway 30 project, as well as street work, public works, police department, and pool needs.
All Enterprise Funds (electric, water, and sewer) are in good shape and supported by rates at this time. “There are quite a few things in sewer and water funds coming up that will need work,” noted City Clerk/Treasurer Kathy Zacher. “It’s in the operating budget. The revenue flow there is better than it used to be.”
So how does Rushford fare overall? “It’s really hard to compare city to city. Every city has their own program, activities, and may or may not address needs. Your fund balance is very good in comparison to other cities struggling to maintain funds and you have a good revolving loan fund able to support itself,” said Boynton. “You’ve come a long ways since the flood and the councils have done a good job building up the strength of that balance sheet.”
“There’s optimal cash balance for funds,” added Mayor Terri Benson. “It was taken care of and we’re headed in the right direction.”
Councilor Sally Ryman noted the fund balance was something that had come up in discussion with the city’s financial consultant, Mike Bubany, during previous visits. “We were saving for in case there was a need,” she noted. “He foresaw we would need them down the road and said to build them up.”
In other news, the city approved acceptance of the Grant-In Aid Snowmobile Trail Permit for five years, effective July 1, 2020. The city serves as the sponsoring fiscal agent for the grant.
An EDA agenda statement, penned by City Administrator Tony Chladek, indicates a business COVID-19 Impact Survey has received varying levels of expected impacts. The city council approved an EDA recommendation last month to provide deferment of flood loan payments for three months to businesses wanting to preserve cash flow during this time. As federal, state, and local options for business continue to develop, no further EDA action was recommended at this time. Of particular interest were options for Minnesota Department of Employment and Economic Development loans, such as the Small Business Emergency Loan through Community & Economic Development Associates or Southern Minnesota Initiative Foundation.
In an update of pressing resident concern, the city pool still hasn’t reached a decision on opening for the 2020 season. A concern, noted by Councilor Sally Ryman is that people from outlying areas are expected to flock to open pools with others already not opening this year.
“That’s one of my concerns,” stated Mayor Terri Benson. “If we’re the only one open, or one of the few, we might get bombarded.” Further discussion and review of other cities protocols will take place at the next meeting.
The upcoming public hearing for a proposed ordinance regulating all-terrain and utility task vehicles within the City of Rushford has been moved to May 26 prior to the council meeting. The previous date could not meet legal publication deadlines. Concerned citizens wanting to attend should contact city hall to clarify if the hearing will be held at city hall or virtually. The next regularly scheduled council meeting is also May 26, beginning at 6:30 p.m., at city hall.