FAIRMONT– The Fairmont City Council on Monday was tasked with designating leftover funds from 2023 for specific purposes.

The unrestricted fund balance for 2023 ended at 78 percent of the general fund operating expenditures for 2024, which is over the 55 to 65 percent range established by the city’s fund balance policy.

Finance Director, Paul Hoye, said, “In 2023, we did increase our fund balance just over $600,000, which put us at $1.8 million for our general fund balance… we’re a good amount above our targeted balance, at least for the policy.”

He went on to say that a number of things lead to the increase, one being the $475,000 the council had budgeted in 2023 for city hall improvement, which were put on hold. The city also received $455,851 in public safety aid from the state which was not anticipated.

In looking at how to designate the funds, Hoye said staff considered what would be a good use for the public safety funds. He said that a new ladder truck for the fire department is slated to be budgeted for in 2025 and that the $455,000 could go toward the truck, along with the money in the fire truck fund.

“Also we have our housing demolition designation that we put $80,000 each year out of our general fund into the program. In 2023 we put in $80,000 but only spent $24,000… we do have some money there to take care of some blighted housing in the community,” Hoye said.

Finally, he suggested that the balance of the additional general fund reserves could be lumped into general government buildings to help plan for future building maintenance.

“Whether or not we build new or keep these same buildings, we’re going to have maintenance one way or another and that’s why we’ve been planning for future improvements,” Hoye said.

Council Member Britney Kawecki said that she has for several years been questioning both the policy and the reserves.

“I feel that these numbers in December would have been known and they are concerning to me, that we’re at 78 percent,” Kawecki said.

She said that the action should be tabled until the council can further discuss how it would like to spend the reserves. Council Member Randy Lubenow seconded the motion.

“We have so many things that we sit here and talk about that we need. We need roads, we need daycares, we need to clean up our lakes… as we discussed during the budget… once they go into those funds, we can’t just pull it out,” Kawecki said.

She said she would like to have a work session to discuss a Capital Improvement Plan and decide what projects are the city’s priority.

“As soon as we designate this money to go into general government buildings, we can’t pull it out and say we want to use it for something else,” Kawecki said.

Council Member Jay Maynard asked what would happen if the council didn’t pass the resolution. Hoye said that the council did not need to pass the resolution, but that it was a past practice of the council to do so. He also clarified that the assigned fund balances were not restricted and thus not binding.

“The council can change its mind and reallocate those funds to whatever project at any time… the money in general government buildings does not need to stay under general government buildings,” Hoye said.

“So we budgeted to spend half a million on city hall improvements and didn’t for various reasons, we got some “free” money from the state that we’ll be putting toward a fire truck… we spent less than our budgeted amount… all of those I see are good things and I don’t know that we could have forseen any of them,” Maynard said.

Kawecki again questioned how some of the aforementioned items weren’t known ahead of time before the budget was approved.

“I did not know those things before we approved the budget… we’re talking about 2023 operations,” Hoye said.

Interim City Administrator, Jeff O’Neill, said that he didn’t know the timing of when decisions were made relative to the levy but that sometimes more money is leftover than expected.

“We had staffing we didn’t hire and we have these fluctuations that create extra revenue for the following year,” O’Neill said.

In a roll call vote, Kawecki’s motion failed 3-2 with Council Members Michele Miller, Wayne Hasek and Jay Maynard voting no.

Maynard then voted to approve the original resolution designating the funds. It passed 3-2 with Kawecki and Lubenow opposed.

Moving to other matters, the council heard from Fairmont Economic Development Coordinator, Ned Koppen, who provided a quarterly update for the Economic Development Authority.

From a marketing standpoint, Koppen said that FEDA has identified three main efforts. One is an engagement with a group called The Golden Shovel Agency, which administers FEDA’s website and produces monthly articles and social media posts. Another partnership is with the Retail Coach, a national retail recruiting company.

“We’ve been engaged with them for about three months now and have what I think are positive results in the form of about eight corporations that are willing to look at Fairmont,” Koppen said.

Finally, he said another effort FEDA has approved is engaging with Camoin Associates, which tracks statistics and viewers of FEDA’s website.

Koppen also touched on FEDA’s revolving loan programs, which includes micro loans and the newer facade loan program.

“Over the last year, we’ve been able to lend out $275,000 from our revolving loan fund and we have helped businesses out through our facade program with $21,750. We’re really happy with the activity on both of those fronts,” Koppen said.

He also touched on White Tail Ridge, a housing development FEDA is working on with another company to produce more housing in the community.

“Fairly recently, the developer we’ve been working with to build those twin homes has indicated that they’re going to build the first one this spring so we’re really excited for that,” Koppen said.

In other action, the council:

— Approved the joint powers agreement with the Minnesota Department of Public Safety/Bureau of Criminal Apprehension and the Fairmont Police Department.

— Approved a taproom license with Sunday sales and a brewer off-sale license with

Sunday sales for FBC Operations, Fairmont Brewing Company, pending a satisfactory background investigation.

— Approved an intoxicating liquor license and Sunday liquor license for Interlake Golf Club, Inc. pending a satisfactory background investigation.

— Approved an event permit for the Fairmont Lions Club Fly in Breakfast on June 23.