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Audit shows city status at Rushford City Council meeting

Fri, May 29th, 2009
Posted in Government

The May 26th meeting of the Rushford City Council commenced with a detailed start, courtesy of an audit report from Smith Schaefer & Associates, Ltd. Tom Wente documented the findings.

The information presented further showcased the financial crunch that cities in Minnesota are currently facing. It was noted that the city is in a "real rare situation" as it's managed to withstand the state-wide budget cuts in Local Government Aid. This comes even after the city received a "surprise hit in December" when nearly $48,000 of funds were dropped due to cutbacks.

Wente continued noting that the city has "quite a few" bonds outstanding," although further noting that the debts were "fairly modest for a city of this size." Regardless of the size, the city has had an increase in debt during the year due the purchase of an ambulance and a fire rescue rig.

Another area which took a hit was the electric, water, and sewer funds. According to audit data, "every utility operated in a net deficit this year." Continued financial troubles seem imminent as the city has recorded a loss in water revenue, despite an increased tax rate and a still struggling sewer fund is generating enough to cover costs only until the rapid depreciation is added into the calculations.

Mayor Les Ladewig chimed in, seeking a professional opinion. Wente responded vaguely saying it would be "hard to analyze." The city does have "solid general and capital improvement numbers," but the "utility funds are in a state of flux and it's hard to see where we'll come out of it."

One interesting aspect of the audit was in regard to the Municipal Liquor Store, which was noted as an asset to the city during the May 11th meeting. During 2007 and 2008, the store posted revenue losses. As a result, the liquor store will be under review by the state. Ladewig plans to talk to legislators asking for an exemption from the law requirement citing the flood as a precursor to problems.

In reference to the May 11th meeting, there is no debt associated with the liquor store building, but quite obviously, it's not generating the expected revenue. It reported an operating income loss of $81,233, a loss in net assets, and a 13% drop in gross profit percentage (the only decrease recorded since 1996) for the fiscal year. Larry Johnson concluded the discussion by commenting, "There isn't money in liquor like there used to be," with heads of some council members nodding in the affirmative.

Community Education

City clerk, Kathy Zacher, who was present at a May 19th meeting geared towards saving the summer ball program from collapse, said she heard "good things." She wasn't shy in hiding the assumption from parents and community members that the city "was the bad guy, dumping the program." City Administrator Windy Block interjected saying that there was "finger pointing from parents" for the council's decision to halt the programs if alternative measures were not secured.

Providing more details, Zacher went on to say Community Education will "take on all grade levels," there will be no difference in resident and non-resident fees, and that the programs will be funded by fees to participants. These fees will be less than those paid by participants in the past. Praise of Community Education's initiative continued with Zacher noting that "same or better programs" would be offered.

Ladewig acknowledged, "With the flood, it wasn't a huge priority and we let it slide. Community Education represents quality we can get in a program. They will do a better job that we will have." Surely glad that the issue had been resolved, Ladewig concluded, "It will be excellent, the finest ever."

More information is available by calling Community Education at 864-7065 or at

Special Assessments

After considerable time and discussion, the city has developed a "special assessment policy" in the wake of the public hearing on the proposed utility improvements. At the time of the public hearing, the city had no such policy. The draft policy, still subject to review by the city attorney and final approval, includes a provision that would make the community as a whole, 100% responsible for any storm water drainage improvements via implementation of a monthly utility fee. In response, Block referred to the fees as "sneaky way of saying, 'We'll collect it from you somehow.'" Based on a fairness issue, all utility users will be affected.

Council member Larry Johnson spoke bluntly saying, "I don't care what you call it, it's still another tax."

Ladewig acknowledged that he "keeps coming back to the comments" made at the May 11th meeting regarding why the city never set up a fund for improvements such as these. He chalked it up to no one being "willing to bite the bullet." He continued, "Everyone wants to be nice, but sometimes you have to step up to the plate."

The formal policy is to be presented at a public hearing to be held June 8th. The storm sewer assessment policy is tentatively scheduled for the same hearing, but may be taken off the agenda if the needed information is not yet complete.

In an attempt to educate the community, there will be an Open House at city hall, June 3rd for those interested in viewing Engineer Dean Otomo's proposals for the city utility improvements. As Block put it, "Come to city hall and be informed."


There were record highs at the public library with 27,790 visits overall last year and 890 children participating in programs. Head librarian Susan Hart attributed part of these numbers to longer programs during the school year and consistently scheduled programs as requested by parents. Ladewig commented, "The library is an asset to the community and hopefully, the future will smile upon us."

The community continues its support of the restructuring of Creekside Park. $22,717.93 was approved in donations to the park from various fund raising organizations and community businesses.

The posted opening for a city maintenance worker has been filled, after a lengthy narrowing of candidates, by Roger Knutson. He was one of 50 original applicants, 39 who were tested, and only 10 of whom were interviewed. It was noted that any of the top ten would have been an asset to the city.

The annual City of Rushford Spring Cleanup has been rescheduled for Friday June 12th, 5-8 p.m., and Saturday, June 13th, 9 am- 12 p.m.. Prices have changed this year and information is available at city hall or by calling 864-2444.

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