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“Continued, slow and steady improvement” for Rushford funds

By Kirsten Zoellner

Mon, May 19th, 2014
Posted in Rushford Government

The city received their annual audit report at the Monday, May 12 meeting from Smith Schafer & Associates and it appears the city is moving in the right direction.

There has been no increase in the tax levy in the last three years and the city has been operating with actual expenditures under budget. Local Government Aid from the state has remained steady the last four years and is expected to rise slightly in 2014. Local property tax now makes up 57 percent of revenues.

Also receiving commendation was the city’s Flood Loan Recovery Fund. “City staff is doing a great job handling these loans,” said Wente. The Economic Development Authority Revolving Loan Fund was likewise noted as seeing significant increases over the last five years.

Previously, there had been some caution regarding the level of the General Fund Reserves, following a sharp drop in 2010 after a transfer to the sewer fund. Reserves dipped further in 2011, following a transfer to the liquor fund, to just 11 percent. The city has gradually built back the reserves to 28 percent, closer to the recommended state level of 30-50 percent. “We’re slowly working our way back,” noted auditor Tom Wente.

Currently, there are three outstanding general obligation bonds for the city, relating to the 2009 and 2011 Capital Improvement Projects and the 2012 Levee Improvement Project. One other note, a contract for deed regarding land purchased in 2007, remains. The audit found no issues related to debts.

Capital Projects and Capital Improvement Funds have seen a drop, from activity due to levee recertification, the Rush Creek Bike Trail project, the Highway 43 project, and the Highway 16 storm sewer project. The city will be reimbursed for work related to the Highway 43 project. Additionally, engineers have estimated that FEMA owes the improvement fund $551,487.

Interfund amounts have been problematic for the city, according to Wente. Sewer Fund advances totaled $807,762 from sources such as the General Fund and Electric Fund. A Liquor Fund advance includes $166,042 from the General Fund, as well as $81,743 already due to the fund. “There really isn’t really any way to pay it back,” stressed Wente. “Making a dent will be very difficult. Wait and see how FEMA gets resolved, but you’re going to have to deal with it.”

“There is a way forward,” responded City Administrator Steve Sarvi.

In other news, the city has received a bit of pleasant news in reference to settlement of arbitration regarding F&L Management & Development, Inc. and Guardian Inn of Rushford MN, LLC. Originally, the city has an agreement with the League of Minnesota Cities Insurance Trust (LMCIT) to pay half of all litigation costs, which totaled $214,959.50. However, LMCIT handled the claim as “land use, development, franchise or enterprise operations litigation.” Coverage agreements for that classification state that LMCIT pay 85 percent of the first $250,000 of litigation, with the city picking up the remaining 15 percent. After deductible of $500, the city is responsible for $32,243.93 of the litigation costs.

Highway 43 Project bid opening is scheduled for May 22, with bids to be formally approved by the state. There have been bids from five primary bidders and several subcontractors for the sizeable project. Modifications will likely be needed due to the delayed timeline, but the project will take place this year. “If I were a betting man, I’d say be prepared for the project to extend or we’ll look at other options,” noted Sarvi.

The next regularly scheduled council meeting is Monday, May 26, at 6:30 p.m., at city hall. The public is encouraged to attend.

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