Two years ago this present Brainerd City Council, with the exception of Alderman Scheeler, decided to demolish the present fire station and build a Public Safety Building and also remodel and build additional space at city hall. The cost of this project was $8 million. The citizens were told the city would have $1 million that would come from the city's share of the LEC building and money from a police fund.
The council asked the citizens to support a $7 million bond referendum to pay the balance of the construction costs. You citizens wisely voted to defeat this referendum. Evidently certain members of the council didn't get the message that you citizens were not in favor of a bond referendum to finance the new space needs. At the Aug. 5 council meeting four of these council members voted in favor of sending this issue back to the Economic Development Authority to issue $1.3 million in bonds to help finance the space needs. These bonds will cost the citizens over $2 million in 20 years. Even though on July 25 the Economic Development Authority voted 4 to 1 not to issue $1.3 million in bonds and sent it back to council. Commissioners Tom Johnson, Rick Kummet, Alderman Olander and myself voted no on issuing bonds. Commissioner Ed Menk voted in favor of the bond. At the Aug. 5 council meeting Alderman Olander changed her vote and is now in favor of the EDA issuing the bonds.
It appears that certain council members want to bypass the citizens voting on this bond issue and are asking the EDA to approve issuing these bonds. These bonds, costing the taxpayers over $2 million, should not be issued.
If this council would use the money received from the police fund and sale of LEC building, which is close to $1 million, for the construction cost, as this council planned to do two years ago no bonding is needed. But instead the city administrator and certain members of this council want to now put this money in the general fund to help pay the salaries and other operating costs of the city. Why does the council want to do this? Because the city administrator and certain council members have not used sound financial judgment in the handling of the taxpayers' money.
Example: On December 31, 2001, the fund balance in the general fund had decreased by $600,000 in a two-year period. When the council approved paying the bills at the July 15 council meeting this general fund had a temporary deficit of close to $1 million in this fund.
The city administrator recommended and the council approved salary increases of over $200,000 this year in spite of the financial condition of the city. Council member Scheeler and myself voted no on the 2002 budget.
Even though this council promised you citizens that the ice rinks would be self-supporting, the deficit is between $70,000 to $100,000 each year. The youth park programs are operating at a deficit of $60,000 each year. The expense budgets for the departments are not monitored and expenses exceed budget revenue in some of the departments.
It is my firm belief that the EDA must once again refuse to issue these bonds for $1.3 million and not give this financial management team, consisting of the city administrator and the Personnel and Finance Committee members, O'Day, Asplund and Olander, the opportunity to once again mismanage the $1 million the city council wants to put in the general fund. It would not be in the best financial interest of the citizens.
The city has the funding source to construct these buildings without bonding. The construction cost, including land and furniture, is $4,195,550. The funding sources are PUC $2,870,000 and $980,000 from the police fund and sale of LEC building totaling $3,850,000. The city needs an extra $299,550 to complete this project.
At the council meeting on Aug. 5, I recommended three different options on how this $299,550 could be raised without bonding for the space needs. Option 1 -- The fire districts that the city is now serving are paying 45 percent for the operations of the fire department. Assess these districts 45 percent of the cost of new space needs for the fire department which is $832,570 x 45 percent = $374,656. Option 2 -- The city has surplus monies in different funds that are not used for the general fund. The fund balance in these funds is $868,297. I recommend using $29,000 out of the parking fund, $112,299 out of the downtown grant fund and $158,251 out of capital project funds. Using these funds would cover the $299,550 still needed for construction costs. Option 3 -- Of the $868,297 that is available the council could use a percentage of each of these funds to finance the $299,550. Also, in the year 2003 these funds will have over $1 million. A substantial portion of the construction costs won't be payable until 2003.
The council voted "no" on all three of these options and voted to ask the EDA to issue bonds for $1.3 million. At the April 1, 2002, council meeting Gary Otterstad of CAM and myself presented a space needs plan to the city council which was approved unanimously by the council for building a new Street Department building in the Industrial Park, remodeling the present fire station, building a substation in NE Brainerd, and remodeling the former Water & Light Building on Laurel Street for a police station and we'd didn't have to remodel or add on to city hall because there was enough room in city hall and the former Senior Citizens Building for the needed space for our staff. Mr. Otterstad and myself had worked very closely with our department heads on this plan. The total cost of this plan was estimated at $4 million. We planned to fund this project from the $1 million the city had and asked the PUC for $3 million to be paid out of their surplus funds but today certain members of the city council don't want to approve this plan. My question is, why do these elected officials feel they do not have to be held accountable to you, the taxpayer?
If you are interested in receiving more information about this bonding issue and the financial condition of the city tune in Channel 8 at 7 p.m. on Aug. 14 and watch my program "What's Bob About?" Any concerns or questions, please call me at 829-3842.
(Olson is an at-large member of the Brainerd City Council.)
Brainerd Dispatch ©2013. All Rights Reserved.