As the schemes and chance of being victim to fraud continues to rise, the city of Rushford is the most recent hit. At the August 24 meeting, City Administrator Hayden Stensgard broke the news publicly, providing details of the type of fraud and what’s been done to recover the funds totaling $252,716.
On August 16, city hall was made aware of the wire fraud on one of its Public Facilities Authority loan payments. According to Stensgard, it was an email breach where the perpetrators caught a legitimate email from the state and created a mimic email. He added the email has since been changed and the city will be migrating towards contracted IT support to further help avoid this type of incident in the future. Staff filed a report with the State of Minnesota IT Department, required to be submitted three days after acknowledgment of the incident.
As for steps following the incident, city staff immediately took appropriate measures in attempt to regain the funds. According to Stensgard, city hall contacted Merchant’s Bank first.
“Because we caught it so early, we had the ability to do a reversal. The reversal did not go through because the funds were not there,” explained Stensgard.
The city also contacted The League of Minnesota Cities Insurance Trust to file an insurance claim on the loss. Unfortunately, there is a $50,000 max claim limit, leaving $202,716 yet to be recouped. Stensgard filed reports with the Bureau of Criminal Apprehension, the Rushford Police Department, the Federal Bureau of Investigation (FBI), and as an additional resource, reached out to Fillmore County Sheriff’s Department. Fillmore County put the city in contact with the regional FBI office, located in Rochester.
“I will say that when talking to the Bureau of Criminal Apprehension, they’re not used to working with situations where they’ve been caught so soon. So, I would say we were fortunate in that regard,” said Stensgard. “However, still it is a substantial amount of money. It’s just an unfortunate circumstance that we’re dealing with now and we’re doing everything we can do to get that back.
The loss does not change anything operationally and does not change anything with budget forecasting for 2027 this fall.
At the same meeting, the council welcomed lobbyist Elizabeth Wefel from Coalition of Greater Minnesota Cities who provided an annual recap of the coalitions goals and accomplishments for the year and the overall legislative session recap. The city is a longstanding member of the 100-plus city coalition.
“This was, I would call it, a session of low expectations. As you may recall, we had divided government, which honestly can work well on some issues,” she began. “DFL only had one seat majority in the senate and we had a very unusual 67-67 tie in the house, making everything a four-way negotiation.”
Protecting Local Government Aid (LGA) is always a top priority for the coalition, as was lead line funding related to the Lead and Copper Rule law. Wefel noted there was a significant $20 million threat of LGA cuts in 2025, even though there wasn’t a budget deficit at the time. Thankfully, it didn’t happen, but Wefel noted the coalition will always pay attention to it for those critical funds to cities.
The main focus of the session was the bonding policy, according to Wefel.
“We were really hoping they were going to stay on schedule and get the 2027 bonding bill done during 2026,” she added next. “A lot of us were skeptical about the ability to get that done. The biggest challenge with the bonding bill is it requires a super majority, so you’ve got to have bipartisanship. Not necessarily a bad thing, but it can complicate matters. No one was more surprised than me … but they did do it. They passed a $122 million bonding bill.”
The final package for water was something of a disappointment for the coalition who lobbied for more funding. The federal government is requiring all cities to remove lead and galvanized water lines by 2037, which will take a significant effort and funding. According to Wefel, more than 87,000 of these lines were identified in the state with another 200,000 yet to be identified. Total cost for that is over $1.5 million. Wefels added there is enough funding to cover the replacements in 2026, but the state will run out next year.
In conclusion, Wefel noted all eyes are now on the 2026 election with more 201 seats up for grabs on Minnesota ballots, including a new governor and senator for Rushford representation.
In other news, the city briefly touched on continued work by Public Works at the former Farmers Win Cooperative site downtown. Residents and businesses interested in what’s happenings and the city’s plans for the site should head to the Economic Development Authority page on the city’s website for more information: rushford.govoffice.com
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