TOWER— City officials are considering hiring a part-time city treasurer as part of its ongoing effort to address the dozen management findings by the city’s auditor during the 2019 financial review.
Last year’s audit was an improvement over 2018, when the auditor highlighted 18 separate concerns, but the city council is now taking the city’s remaining financial shortcomings to heart, as council member Dave Setterberg highlighted in a lengthy update on the progress to date.
“I want everyone to be aware of what we’re working on and the potential direction we’re going in,” Setterberg told the council. “I’ve gained a lot of sympathy for all the city clerks, past and present,” said Setterberg. “There is a lot of work involved in that position.” Clerk-treasurer Victoria Ranua, who took over the position last October, said a lack of adequate capacity to complete all of the tasks of the job meant that the city failed to maintain good order in recent years. “If you don’t have capacity, the management points tend to escalate,” she said. “There are so many things going on.”
Setterberg noted that the hiring of a part-time treasurer, to work 1-2 days a week, would allow the city to finally address some of the auditor’s long-standing concerns about the lack of segregation of duties and lack of control over financial reporting.
Setterberg noted substantial progress already on a number of the management points raised by the auditors, including:
• Establishing a conflict of interest policy to prevent councilors from benefitting financially from decisions they make, such as obtaining discounts from the city’s propane supplier.
• Addressing inadequate funding to cover city costs for water and sewer as well as getting overdue water and sewer loans repaid.
• Considering a resolution on Monday to assess overdue water and sewer fees to the property taxes of the property owners. The resolution cited $19,110 in delinquent water and sewer accounts as follows: Ron Abrahamson, 615 Main St. ($3,371), Jay Aldrich, 609 S. 2nd St. ($2,174), Melanie Aldrich, 509 S. 2nd St. ($4,010), Raymond Earley, 5627 Pine St. ($682), Ralph Friesner, 114 N. 3rd St. ($1,096), Jesse Gornick, 613 N. 3rd St. ($3,598), Johnathan Lehti, 515 S. 3rd St. ($1,383), Karel Winkelaar, 511 Main St. ($2,795). The council expects to act on the resolution in October.
• Beginning to properly track lease payments to the city, something that city hall had not done for several years.
• Submitting airport maintenance grant requests on a timely basis and clearing up the backlog of unsubmitted reports from prior years.
• Ensuring that grant documents and related materials are now maintained at city hall as required.
• Bringing account reconciliations up to date.
• Assessing Hoodoo Point for the cost of wastewater treatment.
• Ensuring that fund transfers are authorized by the council and are made with an adequate paper trail.
• Addressing a longstanding deficit in the city’s Tax Increment Financing account for the assisted living facility.
Mayor Orlyn Kringstad thanked Setterberg for the in-depth progress report. “I don’t recall in the four years that I’ve been attending council meetings when the audit report findings have been gone through so thoroughly,” he said.
The council took no action on the suggestion to hire a part-time treasurer, although that is something the council may add to the budget for 2021. Setterberg noted that former clerk-treasurer Ann Lamppa has been working part-time to bring account reconciliations up to date, which was another management point addressed by the auditors.
In related action, the council set a special meeting for Monday, Sept. 28, to set the levy for next year. Ranua explained that the city must adopt its preliminary levy by Sept. 30. That levy can be reduced when the final levy is set in December, but it can’t be increased above the preliminary amount. The council will also hold a working session ahead of the special meeting to go over next year’s budget in detail.
In other financial matters, the council reluctantly approved claims for the month totaling a whopping $487,000, which includes the final payment of $155,586 for the city’s new ambulance. The city also made a $50,000 loan repayment to the League of Minnesota Cities from the emergency cash flow loan the city received last year and made a partial payment of $67,142 for work on the airport garage.
Ambulance update
Ambulance director Dena Suihkonen offered an update on the situation with the city’s three ambulances, just ahead of the expected arrival of the city’s first new ambulance since 2013. The city ordered the ambulance in late 2018 and it has taken nearly two years for the company to deliver the vehicle. Suihkonen said the new ambulance will replace Unit 2, a 2011 GMC which has been in repair status for some time. “Then, we have two remaining vehicles that are in poor condition,” she said. For now, she said the city has been relying on a loaner provided by the company supplying the new ambulance as its primary rig for emergency calls.
Suihkonen noted that the federal CARES Act, passed earlier this year to address the COVID-19 pandemic, includes funding for emergency vehicles in some cases and that the city will explore the possibility of tapping those funds to replace either Unit 1 or Unit 3.
Ranua said the city would struggle to replace either of those two ambulances, despite their poor condition. “Our ambulance replacement fund is now depleted and it will be several years before we could purchase another,” she told the council.
The city council approved a motion to declare Unit 2 as surplus equipment and left it to city staff to explore the options for disposing of the vehicle.
In other action, the council:
• Adopted a data practices policy for handling public information requests to the city. The city has been inundated with dozens of public records requests from former ambulance director and fire chief Steve Altenburg since his dismissal in March. Ranua described some of the requests she’s received as “big bites,” which can consume considerable staff time to prepare. Ranua said the new policy clarifies how the city will respond to such requests, provides a more detailed request form, and authorizes the city to begin charging for staff time consumed in responding to requests.
Council member Dave Setterberg called the policy a “good first step,” but said the city will now need to undertake a review of its data to better understand how some of its records should be classified.
• On the recommendation of the ad hoc blight committee, appointed Mayor Kringstad to serve as the city’s blight officer. The committee reported it has sent pre-compliance letters to four property owners, with only limited response. The committee can now follow up with compliance orders.
• Heard from city attorney Mitch Brunfelt on the American Tower lease. For now, Brunfelt said the lease is favorable to the city and should probably be left in place, as is. American Tower and a second company, Tower Point, both have made sizable cash offers for perpetual easements to the hill on the north side of town. But Brunfelt noted that such agreements appear to be in conflict with the city’s charter and that the current lease is probably a better deal for the city.
• Accepted the low bid of CC Winger for sidewalk repairs at the civic center and around city hall. The city is likely to get reimbursement for much of the work from a $50,000 streetscape grant from the Department of Iron Range Resources and Rehabilitation.
• Approved a grant-writing proposal from Nancy Larson to assist the city in applying for Aid to Firefighter Grant funds to assist with the purchase of a new ambulance and other equipment. Larson said the grant program could provide up to 95 percent of the cost of a new ambulance.
The council also approved a resolution authorizing Larson to submit a grant-writing request to IRRR to cover a portion of the cost of her work.
• Heard but did not act on an airport noise abatement plan developed by the city’s airport commission to address complaints from residents near the airport, particularly about seaplane noise. Airport manager John Burgess said commission members and other city officials have been working with Adventures Seaplanes, the primary user of the city’s seaplane base, to develop flight paths and other mitigation measures to reduce the noise impact to nearby residents. Burgess said the city can really only make recommendations to pilots, since the airways are subject to the jurisdiction of the Federal Aviation Administration, or FAA.
He said the new flight recommendations will be made into a map, which will be posted at the seaplane base, the arrival and departure building, and in a state-issued directory with airport information.
• Approved the posting of two fire department positions, including assistant chief and captain. Fire Chief Paige Olson recently completed revisions to job descriptions for the positions.
• Tabled a decision on a request by Ken Schweiber to renew the long-term dock lease he has maintained at Hoodoo Point since 1986. Schweiber made an impassioned plea for renewal, noting that he spends lots of money at Tower businesses when he’s in the area. “I’m a strong believer in the town,” he said, “and I know how important it is to help the local businesses.”
Council member Sheldon Majerle questioned the validity of Schweiber’s lease, noting that it was never approved by the council. He said Hoodoo Point Campground manager Randy Pratt suggested he could make several times the $500 a year that the city receives for Schweiber’s dock lease if it were converted to a campsite. In addition, Majerle noted that the city had gotten rid of the docks and boathouses at Hoodoo Point after a young man dove off one of the docks and broke his neck, leaving the city liable for a sizable insurance settlement.
• Tabled a decision on propane bids. The city received two bids, one for 99.5 cents per gallon from Superior Fuel and another from Como Oil and Propane for $1.049 per gallon.