City of Menahga faces financial dilemma
By Shannon Geisen
Menahga Mayor Patrick Foss recalled when the city council set a high levy several years ago.
“This year’s levy won’t be any sweeter,” he said.
The council set its preliminary payable 2016 levy at $489,035. The 2015 final levy was $414,306.
The proposed general fund levy remains the same as last year at $304,514.
But a $69,898 hike in additional debt levies is due to a shortfall in the city’s debt service fund.
By the end of December, the debt service fund balance is projected to be $286,346. But bond payments of $275,897 are due on Feb. 1, 2016.
The impending negative balance is the result of a large number of uncollected special assessments on tax-forfeited and tax-deferred properties.
In addition, 2009 general obligations weren’t levied for in 2009, 2010, 2011 and 2012.
A debt study, commissioned by the city and prepared by Ehlers & Associates, revealed the errors.
“Isn’t this something that’s picked up in audits?” asked councilmember Roger Henstorf. “There should’ve been red flags. We shouldn’t be learning about it now.”
Assessments weren’t paid on property, said City Administrator Char West.
Ehlers recommends transferring money from other available funds to reduce the proposed debt levy, lightening the load on taxpayers.
“We’ll be working on bringing these numbers down,” said Foss.
A public meeting to discuss the 2016 budget and final tax levy will be 6:30 p.m. Monday, Dec. 14 at city hall.
The council tabled a proposal for a financial management plan from Ehlers & Associates, which recently completed the debt study for the city.
For $7,500, Ehlers offered to complete a “10-year budget and capital improvement plan with a funding strategy.”
“It’s a spendy thing, but this isn’t just for us,” said Mayor Patrick Foss. “It’s for future councils.”
Henstorf balked at both the fee and the seeming loss of control over the city’s checkbook.
“I’m no financial wizard, but I hate to lose too much control over our finances,” he said.
Foss pointed out that the current council likely won’t be the same in the next five years.
In other business, the council:
n Passed a resolution issuing $905,000 general obligation bonds to finance the city’s main lift station replacement project and to refund the city’s outstanding 2007 general obligation sewer revenue bonds at a lower interest rate for a $22,109 savings. The bonds are a for a 7-year term and will be paid from sewer revenues.
n Passed a resolution asking the Minnesota Department of Transportation to reduce speeds on Hwy. 71 within Menahga city limits for public safety reasons.
The council is requesting that MnDOT establish a 45-miles-per-hour zone on Hwy. 71 from south of the Blueberry River bridge to 129th Avenue. Likewise, a 45 mph speed limit would be instituted for drivers traveling south on that same stretch of highway, starting at 6th Street North to the south side of the bridge, near Sunnybrook Auto.
n Gave approval for Sounds of Spirit Lake organizers to apply for grant funds for the construction of a permanent concert stage.
Throughout the summer, Sounds of Spirit Lake presents free outdoor concerts. Several bands said they wouldn’t perform again until a more stable stage was available.
Organizers requested council permission to erect a concert deck by the Spirit Lake boat landing. Decking constructed of man-made, maintenance-free materials would cost approximately $9,200. It would be about a foot or two high, Foss reported.
At an approximate cost of $100,000, purchasing a portable stage is cost-prohibitive, Foss said.
Preliminary approval from the council was necessary for possible grant applications. The final design won’t be approved until grant funds are secured. The city would own the stage.
“If we want to continue a quality program, we need to do something,” said Henstorf.
n Approved Pro Contractors’ $5,340 bid to replace two doors on Northbound Spirits, the municipal liquor store.
They also accepted a $1,200 quote from Black Diamond Concrete to replace pavers and rocks on the east side of the store with poured concrete for easier cleaning.
Utilities and Parks Superintendent Frank Thelin told the council the city beach will likely close next week. He anticipates Memorial Forest Campground will close by the end of September.
n Briefly discussed the ongoing “rag” issue in the lift stations. So-called “flushable” wipes don’t break down after flushing. Instead, they clog sewer pipes and pumps.
To help prevent sewer backups, Thelin is urging city residents to dispose of wipes, diapers, sanitary napkins, rags or shop towels in the garbage.
“We need to continue to educate,” agreed Foss.
At its special meeting on Aug. 20, the council awarded a main sewer lift station replacement project to the low bidder, Feldt Plumbing, for $202,000.
n Scheduled a joint meeting with the Greenwood Connections board solely devoted to reviewing its complex budget.
Foss told Greenwood Connections Administrator Clair Erickson that the council needed an opportunity to ask questions and get clarification.
Councilmember Craig Lawrey agreed this would be helpful since he was “new to this.”
The special meeting will be held 5 p.m. Tuesday, Sept. 29 at the nursing home’s conference room.
n Learned that Greenwood Connections awarded three $1,500 scholarships and four $500 scholarships to help nurses advance their careers through education. Scholarship money may be used for tuition, mileage or day care.
n Approved a lease agreement between Green Pine Acres Nursing Home and the Menahga School District for use of classroom space. High school nursing students are bused to the nursing home for a 50-minute class. At the end of the course, they qualify to become nursing assistants.
n Heard from Jensine Kurtti who was upset that her zoning variance hadn’t been filed with Wadena County. In October 2014, the council approved the construction of a three-story, 40’ by 60’ building and rain garden on Kurtti’s property at 217 Aspen Ave SW.
Kurtti maintains that a 2010 council granted a variance that increased the impervious surface from 52 percent to 72 percent of the lot within the shoreland district.
The matter was added to the Oct. 13 agenda.
n Approved a $71,269 payment to DI-MAR Construction Inc. for rehabilitation work on the city’s water treatment plant.
n Agreed to contribute $1,386 to Todd-Wadena Community Corrections’ 2016 “Community Concern For Youth Program.” The funding request is an increase of $41 over the previous year. Menahga School is asked to fund $2,945.
The council noted that Menahga’s 2014-15 student population exceeded Wadena’s by 10 students.
n Rescheduled the next council meeting to 7 p.m. Tuesday, Oct. 13. The original meeting date fell on Columbus Day, a federal holiday.