ELY — The Ely City Council voted Monday to transfer $200,000 from the city’s fund balance to cover an expected deficit in the construction of a new fire apparatus storage building, as rising costs have outpaced a federal grant secured years ago for the project.
Councilor Al Forsman, who backed the motion, said the transfer was an unavoidable consequence of how long the project has taken to come together.
“It took a long time to get the USDA Rural Development grant,” Forsman said. “They had a lot of hoops that we had to jump through to get that grant. And over that time, costs have escalated.”
Forsman added that city officials believe a funding shortfall may still remain even after the transfer, and that moving forward now is preferable to waiting while construction costs climb further.
He said the city has requested an extension on its grant contract through the end of July and is pursuing additional funding for both the fire apparatus building and a separate ambulance building that was part of the original grant application.
“I think we have to put some skin in the game on our side,” Forsman said.
Councilor Emily Roose asked about the current state of the city’s fund balance before the vote. Clerk/Treasurer Harold Langowski said the city targets keeping 40 percent of its fund balance in unrestricted reserves, available for capital projects or emergency repairs, and that the city is currently near that threshold.
The planned building is intended to be utilitarian, officials noted during discussion, with no unnecessary amenities.
The structure would replace the old city garage, which officials said will eventually need to be demolished to make way for future housing development.
The council approved the transfer without dissent.

Population
The city received an annual report from the Minnesota State Demographic center, which estimates the city’s population. As of April 1, 2025, Ely’s population was estimated to be 3,304 people from 1,607 households.