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Menahga Council sets 1 percent levy increase, discusses liquor store remodel

After whittling down its 2019 budget, the Menahga City Council on Monday adopted a final 2019 tax levy of $450,392 -- a mere $4,410 or .99 percent increase over last year. Last year's final levy was $445,981.

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Matt Malone of BHH Partners discussed preliminary construction options for Menahga's municipal liquor store with the city council on Monday. (Shannon Geisen/Enterprise)

After whittling down its 2019 budget, the Menahga City Council on Monday adopted a final 2019 tax levy of $450,392 - a mere $4,410 or .99 percent increase over last year. Last year's final levy was $445,981.

In September, the council initially proposed a $558,113 tax levy, which would have been a 25 percent tax hike. The city council and department heads spent the next few months trimming the budget.

The 2019 budget anticipates $978,418 in general fund expenses and $636,696 in revenue (not including levy dollars). The general fund tax levy, payable in 2019, will add another $341,722 to the city's coffers for a balanced budget. Last year's general fund levy was $332,429.

Debt fund levies total $108,669 for payable 2019. The general obligation improvement bond payments break down as follows: $71,687 for 2013A, $6,048 for 2013B and $30,934 for 2015B. Last year's debt fund levy was $113,551.

On-sale liquor store revenues are projected to be $272,900 in 2019, with expenditures of $245,140. Net profit would be $27,759. Off-sale revenues are calculated at $682,500 and expenses $663,790 for a net profit of $18,709. Transfers of $31,250 each out of the on- and off-sale funds and into the city's general fund are built into the 2019 budget, noted Mayor Patrick Foss.

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The 2019 water fund budget is $220,077 in revenue and $173,532 in expenses.

"There's a sizable profit there; however, you're looking at putting that money back into the system for repairs, maintenance or bond payments," Foss said.

Sewer fund revenues are estimated at $278,629 in revenue and $298,266 in expenses, including a $42,040 bond payment for the new main lift station.

Liquor store improvements

Matt Malone, a project manager at BHH Partners, reviewed preliminary construction ideas for Northbound Liquors.

"There's some deferred maintenance items that have been on the table," Malone said, noting that "a good portion of the bar equipment has seen its useable life cycle."

The mechanical system is dated, with several items needing to be replaced, he continued. "The bathrooms don't currently comply with building code for accessibility." There are issues with settlement, ice and dripping in the vestibule, and the roofing is 10 years old. Exterior signing is also "showing its age."

Malone pointed out the city owns two lots. Where the existing store sits, it is zoned commercial, and the other is residential R2. In his proposals, Malone said he kept to R2 requirements if a new building were built, or the city could rezone that lot as commercial.

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Off-sale is currently about 600 square feet. A 2017 market study for Menahga suggested

1,200 to 1,800 square feet as ideal, Malone said.

The first option involves razing the off-sale retail portion of the store ($50,000) and rebuilding a 2,722-square-foot addition ($585,230). Remodeling of the on-sale area would cost $447,625. Soft construction costs - signage, furniture, fixtures, equipment, etc. - are estimated at $497,200, for a grand total of $1,688,341.

"Based on our experience, it's typically less expensive to tear it down and rebuild it versus trying augment what's there," Malone said.

One of the challenges with this plan is that off-sale would be closed for roughly four of the 18 months of construction, he said. "There is a lot of interruption. One is open, one is closed, all of the time."

The second option is to demolish the entire building ($150,000), build a new 6,425-square-foot store ($1,060,125) and move the parking lot so it borders U.S. Hwy. 71 for easier access.

"We'd be able to put in truck and trailer space on this side, too, so boats and RVs have a little bit easier way to get in, get out, plus off-street parking on three sides," Malone said.

Soft construction costs are estimated at $469,350, for a grand total of $1,739,981.

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Foss said, "As you can see, the numbers are staggering," but he advised choosing to build new. Incoming Mayor Joan Liimatta asked the council to table a decision until the new council took office in January. Foss agreed, and the council took no action.

In other business, the council did as follows:

• In what was likely his last meeting as mayor, Foss thanked the community "for supporting me and allowing me to serve them."

• Learned that American Tower Corporation is contesting the city's issuance of a conditional use permit to Uniti Towers in court. City Administrator Gina Ellingson said legal representation is provided through the city's property/liability insurance through the League of Minnesota Cities Insurance Trust.

• Approved a 2019 pay plan for city employees, which includes a 50 cent per hour increase. Foss noted there was no pay raise last year.

• Certified deferred assessments for seniors, disabled or military persons. Mary Montoya and Michael Ress, Leslie Mattson, Delores Charmoli and Marcell Grangruth qualified for deferment in 2019.

• Adopted assessments for unpaid utility bills. A certified copy of the assessment roll will be transmitted to the county auditor for collection with property taxes, including 18 percent interest per year.

• Authorized an Arts-Based Community Development Grant application to Five Wings Arts Council. The grant request will be no greater than $7,500. A 50 percent matching funds requirement will be meet by a private party, so no city funds are required.

• Amended the city code in order to hold regular council meetings on the second Tuesday of each month at 6 p.m. The next regular meeting is at 6 p.m. Tuesday, Jan. 8 at city hall.

Shannon Geisen is editor of the Park Rapids Enterprise.
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