At the September 25 meeting, the Rushford, Minn., council learned from the Coalition of Greater Minnesota Cities (CGMC) legislative attorney and lobbyist Elizabeth Wefel that more funding will be in the cities’ coffers. While not quite to the extent hoped, Wefel said state legislators approved a Local Government Aid (LGA) increase.
“We were pushing for a lot this time,” she said, describing the last session. “I’ve got to be honest. It was a little crazy.” The new increase will mean an additional $65,000 impact for Rushford.
With the state’s historic surplus, a predicted $17 million, the session pushed through 6,800 bills, according to Wefel. However, much of it was one-time funding instead of permanently ongoing funds. The funds include LGA, where the CGMC was lobbying for a permanent inflationary increase. Wefel noted that the Democratic-Farmer-Labor (DFL) majority in the state puts legislative focus on the metro areas, and getting funding for more rural Minnesota is a challenge.
Pushing for $100 million with that inflationary increase, the CGMC was happy to get $80 million with no permanent increase formula. Should state finances flip the other way, cities could see LGA funding return to delayed allotments again, something all are keen to avoid.
Rushford will also see funding through the new Small Cities Street Fund, established with a permanent funding mechanism. While the 2024 amount is going to be minor, the amount will increase in 2025.
“There was a lot of stalemates and pushing back and forth,” added Wefel. “Without rural democrats, you don’t get much money for rural areas.” She later noted that this could translate to a lack of rural water, roads and bridge funding. “This is why what we’re doing is so important. The public pressure all came together and pushed for that bonding bill and increased the willingness to get it.”
Despite the increases coming via the state, the council approved a preliminary budget and levy with a 5.2% increase over 2023. The not-to-exceed $1,138,6319 provides some cushion for unseen expenses and revenues. The council can reduce the amount when it sets the final levy in December.
Fund details noted included additional funding for the fire department and capital projects. No new funding was going into the city’s Levee Fund. The Economic Development Authority will see increased expenses, but the city can use the fund balance if needed. Expenses are up in the General Fund, but it has a healthy fund balance. The city anticipates spending down $153,000 of the reserve.
“You might not want to lower it too much more, but we could get it below 5%,” said City Clerk/Treasurer Kathy Zacher.
The council also considered and approved an EDA loan for Semcac. However, multiple councilors noted dissatisfaction regarding how the entity brought forth the loan request. Executive Director Doug Grout has since resigned from his post with the charitable organization.
Semcac requested $149,900 for a term of 15 years at .5% interest with an option of a one-year deferment. The purpose of the loan is building rehabilitation. The loan is predicated on Semcac receiving funds from an Arlin Falck and Bremer grant, making the total sought $316,000, of which just under half is funded via the EDA loan.
“The thing we’ve been working on the EDA is making good decisions going forward. He made bad decisions in that meeting and circumvented the EDA,” explained Councilor and EDA member Leigh Volkman.
“In the past, we’ve made some tough decisions on lending out. I don’t see this organization as high risk, so I would like to support them,” said Mayor Terri Benson. “I think this whole loan thing could have been handled better.”
The council approved the loan in a 3:2 vote, with Councilors O’Donnell and Andrew Linder opposed.
The council also approved the tentative labor contract following negotiations with the labor unions. The only significant change was the wage-step approach for the police department. The first two steps need to be more competitive in the market.
“It’s really hard to find employees. Some towns are losing their whole department,” said Zacher. “We’re doing this for retention and recruitment. That low pay doesn’t bring in people.” She also noted the changes don’t affect any employees now.
The city will conduct a new wage study next year. The last study was 10 years ago.
“It’s time to see where we stand,” noted City Administrator Tony Chladek.
The next regularly scheduled council meeting is Monday, October 9, at 6:30 p.m. at city hall. The public is encouraged to attend.
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