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Budget deficits alarm Menahga mayor

Menahga City Council will discuss further at an May work session.

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Menahga Mayor Liz Olson called for a special budget meeting after seeing a negative checking balance and deficit spending in the 2021 budget.

She voiced her concerns at the Monday, April 12 city council meeting.

“How can these checkbook balances be in a deficit?” Olson asked, referring to the check reconciliation report for March 2021. Eight funds showed a negative balance, ranging from -$373 to -$347,775.

City Administrator Curt Kreklau said it was a coding issue in the accounting software. The 2021A fire truck fund, for example, shows a -$108,910 balance. It’s a bond payment that the city made, he said.

“Well, can’t you change it in the description?” Olson asked.

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Kreklau said the investment accounts are correct, but the debt service funds still need work. He said he will be working with Ehlers Investments to study the issue.

“So you spent $108,910 out of that checking account and we don’t have money there, so where did it come from?” Olson asked. “Are all of these incorrectly labeled?”

A lot of them are, Kreklau replied, adding they aren’t all checkbooks, either, such as the water and sewer funds. “This is the coding issue that we’ve been bringing to the council’s attention since the last council.”

Olson asked why the coding wasn’t corrected in the past two years. “You can’t have a minus bank balance.”

Council member Durwin Tomperi asked if the city has received overdraft notices from the bank.

No, Kreklau replied, blaming the Banyon accounting software. He added that’s why the council approved new accounting software and creating a new chart of accounts.

“There’s no way you can merge bad data with a new system. It’s going to be bad to bad,” Olson said.

Kreklau said he would be “ill-advised” to change accounting descriptions on his own.

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“If somebody put the wrong description there, you just simply change the description. You can do that in any system,” Olson said.

Council member Art Huebner argued that Kreklau inherited the problem and Banyon is “corrupt.”

“Then, by this time, it should be corrected,” Olson said, adding it is the city administrator’s responsibility. She pointed out the city auditor told her that, as of May 2019, the city accounts were “up to date and correct.”

Olson said budget cuts appear necessary. The 2021 water fund budget indicates revenues will be $260,350, but expenses are $435,615, she pointed out. The liquor store budget has $1,140,150 in revenues and `$1,175,890 in expenditures. The city can’t afford to deficit spend, she concluded. “That isn’t what budgeting is.”

In other business, the council did as follows:

  • Dismissed Pemberton Law as the city’s civil legal counsel, effective April 12, and instead hired Ramstad, Skoyles & Winters PA, Attorneys at Law, effective April 13. The motion passed 3-1-1, with council member Art Huebner opposed and council member Robyn Keranen abstaining. Council member Durwin Tomperi explained that he made the motion because the city will be better served by different counsel.

  • Directed Kreklau to share all prior and future forensic auditor correspondence with the mayor and vice mayor. Tomperi said the purpose of the motion was for better oversight. It passed 4-1, with Huebner opposed.

  • Directed city staff to follow Minnesota Historical Society’s instructions for storing city records and not destroy any records until a new record retention policy is created. The motion passed 4-1, with Huebner opposed.

  • Sought salary information for all city staff for information-gathering purposes. It

  • Approved the purchase of an electronic clock software system called PayClock Online at $40 per month. Kreklau recommended trying the system for a couple months, then determining whether accompanying hardware should be purchased. The motion passed 4-1, with Huebner opposed.

  • Denied a two-month extension of the temporary accounting technician position at city hall. Tomperi said the intent of the position was to assist with the installation of new accounting software, which has been delayed, so he did not see a need to continue the position. The motion passed 3-2, with Huebner and Keranen opposed.

  • Learned that Lyn Pinnick resigned from the Greenwood Connections Board after serving since 2013. A replacement is being sought.

  • Tabled a proposed wage increase for Greenwood Connections staff that would have been effective May 1. Olson asked Greenwood Connections Administrator Laura Ahlf to provide a report of overall employee benefits and the financial impact of wage increases.

  • Learned that Greenwood Connections has not had a COVID case in the facility in more than 90 days. Resident vaccination rate is 90 percent.

  • Approved a street sweeper services contract, at $3,500, for the spring with Pro Sweep Inc. of West Fargo. The council also asked Public Works Director Ron Yliniemi to get a quote for repairing the city’s sweeper so it is MnDOT-ready. The motion passed 4-1, with Huebner opposed.

  • Approved spending $2,500 on city beach path repairs, including filling holes with Class 5 and removing vegetation.

  • Approved a design by Brett Lakanen, a Minneapolis creative designer with ties to Menahga, for the new water tower, with the addition that one side will say “Home of St. Urho” and the other side “Gateway to the Pines.”

  • Approved hiring Kaleb Anderson and Dave Skaro to the Menahga Fire Department.

  • Received a maintenance of status quo order and stipulation letter from the Minnesota Bureau of Mediation Services during collective bargaining with supervisory employees, such as the police chief, public works director and liquor store manager.

  • Formed a contract negotiations subcommittee, including the city administrator, for future negotiations. After the motion passed 3-2, with Huebner and Keranen opposed, Olson appointed the mayor and vice mayor to the committee.

  • Appointed Jensine Kurtti as ex-officio member of the city’s planning and zoning commission. The motion passed 3-2, with Huebner and Keranen opposed.

  • Approved a $1,580 funding request from the Community Concern for Youth.

  • Heard a proposal from Tim Ellingson about constructing a one-mile biking/walking trail northwest of the city’s compost pile. A small citizens group has begun performing labor to clear a path. Ellingson asked the city to help by providing a skid steer, brush cutter and signage. “We estimated we have two days’ worth of skid steer work to get it done,” he said. The council will take up the matter at a work session.

Related Topics: GOVERNMENT AND POLITICS
Shannon Geisen is editor of the Park Rapids Enterprise.
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