FAIRMONT– The Fairmont City Council had a lengthy conversation about the proposed 2024 budget and levy during its meeting Monday night before ultimately approving both, though the first on a 3-2 vote.

Last week the council held a workshop regarding the matter and on Monday Finance Director Paul Hoye again provided an overview of the proposed budget and levy, which he said needed to be adopted by the end of the month.

On the revenue side, Hoye said the city will see a large increase of $450,000 in Local Government Aid (LGA) in 2024.

“Overall our revenues are up $690,000 or about 7 percent for 2024,” Hoye said.

As for general fund expenses, which includes general government, public safety (police and fire), public works, parks and recreation, lake restoration, economic development, etc., Hoye said the expenses are up about $693,000 and that the large majority of what drove the increase is wage and benefits, as well as overall inflation in regards to things like fuel and materials.

“Also we have money in the budget this year (2024) to deal with Emerald Ash Borer (EAB),” Hoye said.

He also said the Community Development Coordinator position, which has been discussed for the past few years, is included in the 2024 budget. While the city had been talking about sharing the position with the HRA, an additional $45,000 is included in the 2024 budget so that the city can cover the whole cost of the position as the HRA decided to hire its own.

Hoye also touched on the debt service levy, which will see an increase of $55,000, which will help fund extra street improvement projects. At last week’s budget workshop, the council heard from Public Works Director, Matthew York, who detailed plans to work on some major roads over the next few years.

In regards to capital projects, Hoye said there was one change from the workshop. While there was $50,000 in the budget for the ice arena, after further conversations with the county and hockey association, which both said they didn’t have funds to help, the city decided to remove the money until there’s matching funds in place.

“Other than that, what we have listed in here was included in the Capital Improvement Projects (CIP) that the council heard at the budget workshop… and includes $250,000 to finish the Sylvania Park Bandshell… and $500,000 for phase two of the Gomsrud Park project… we’re also budgeting $12.5 million for the community center,” Hoye said.

The liquor store funds were also briefly touched on. After the projects, there will be a net income of $635,000, and about $650,000 in reserves will be spent though Hoye said there’s currently a little over $2 million in reserves.

“We’re still very comfortable in what we have in reserves at the liquor store so I don’t see any problem funding these projects. It’s obviously not something we can do every year continuously,” he said.

As it stands, the city is looking at a 6.2 percent levy increase, or $400,000, in 2024.

In closing, Hoye said that the budget and tax levy that the council was tasked with approving would set the maximum levy but that a budget hearing would be held in early December to finalize the budget, at which point the council could lower the levy from 6.2 percent, but not increase it.

Council Member Michele Miller thanked Hoye and York for both their work on and explanation of the budget.

“I looked through this and went back five years and I don’t think we’ve had anything inappropriate in the budget. We still have a city to maintain… looking though here and at the equipment and the vehicles, our streets are plowed, our garbage picked up, if we need the fire or police, they’re here… I just want to say thank you to you… I think it’s a good budget,” Miller said.

Council Member Britney Kawecki asked where the money saved from six months of not having a city administrator is going. Hoye said that what is not spent in 2023 will go into the general fund reserves.

Kawecki also raised some concerns with the city attorney funds for Flaherty and Hood, which are already over budget. She said she thinks the council needs to discuss that moving forward.

She also brought up the Human Rights Commission and asked whether the council wanted to reinstate it. Mayor Lee Baarts said it was up for discussion.

“They’ve been extremely involved in the community, they have a meeting every month with an agenda… it’s in our city ordinance, they’ve had events throughout the year… I definitely think Human Rights Commission should be looked at,” Kawecki said.

Miller made a motion to approve the budget, which Council Member Wayne Hasek seconded.

Kawecki asked whether Human Rights Commission was being considered. Council Member Jay Maynard said a motion could be made to amend the budget to include Human Rights Commission.

Council Member Randy Lubenow made a motion to amend the budget by adding Human Rights Commission, which Kawecki seconded. Baarts asked Hoye how the commission could be added. Hoye said he hadn’t heard the monetary amount that was desired to be added to the budget.

Miller said that since the city was currently without either an interim or full-time city administrator, she didn’t think they should add anything to the budget without a clear path forward.

Baarts said that while he was in favor of adding a Human Rights Commission, not knowing a monetary amount was troublesome for him.

Kawecki suggested the council table the budget and levy until it had solid numbers that can be added to the budget.

When discussing the most recent motion, York asked if the council knew how much money it wanted in the budget for the Human Rights Commission. Lubenow said he was thinking $2,500 and made a motion to add that amount to the 2024 budget.

The motion failed 3-2 with Miller, Hasek and Maynard voting no.

The council went back to an earlier motion made by Miller to approve the 2024 budget. The motion passed 3-2 with Miller, Hasek and Maynard voting yes.

A motion to approve the 2024 levy passed 5-0.

On Monday the council also heard a brief update regarding the search for a city administrator and/or interim city administrator.

Baarts said that last Thursday a candidate came down to tour the city and meet with some councilors and staff and that they are still waiting to hear back from them.

“Hopefully we can move ahead and we can agree to terms,” Baarts said.

He said that he has spoken to Charlene Stevens with GovHR USA, the firm the city is using to help in its search, and that if the interim does not work out, the city will start over its search for both an interim city administrator and full-time city administrator.

While it wasn’t discussed during the city council meeting, following adjournment, a member of the hiring committee shared that all three of the city administrator candidates that the council was previously considering have recently pulled their applications. All three candidates had applied for the position, been interviewed by GovHR and invited to come to Fairmont to meet the council and city staff. The reasons for which they withdrew varied.

Moving to other matters, the council heard from Airport Manager, Lee Steinkamp, who spoke about some airport upgrades.

Steinkamp said a few upcoming improvement projects triggered an airport layout study.

“What the plan and study will do, is we’ll get a lot of survey data, aerial survey, traffic counts, and collectively put together a future plan for the next 10 years,” Steinkamp said.

While it will be about a $430,000 project, Steinkamp said about 90 percent will be funded by the

FAA (Federal Aviation Administration) and 5 percent by Minnesota Department of Transportation Aero. The local share for the project will be about $22,000.

The council approved to sign an agreement with KLJ Engineering Services for the airport layout plan/master plan update project.

The council also heard from Economic Development Coordinator, Ned Koppen, who presented the development agreement with Midwest Shop Condos LLC, which intends to extend the south end of Armstrong Drive, by about 125 feet, and build 12 industrial buildings that will be divided into business condo units that will be sold to individual businesses.

“The development agreement is a collaborative effort between city staff, the developers and our city attorney. It’s been vetted by everyone involved and is acceptable to everyone,” Koppen said.

He said that the document sets some parameters of the development and spells out some securities for the city as the developments proceeds.

“I think it’s a good deal for the city and it’s exciting to have some new development,” Koppen said.

The council approved the development agreement with Midwest Shops Condos.

In other action, the council:

— Approved the 2024 Joint Powers agreement with Minnesota River Valley Drug Task Force.