Serving Northern St. Louis County, Minnesota

Tower dodges major financial bullet

LCCMR accepts amendment to harbor grant that went awry

Marshall Helmberger
Posted 1/21/20

TOWER— City officials here have managed to avoid a potential financial calamity. This past Thursday, members of the Legislative-Citizens Commission on Minnesota Resources, or LCCMR, voted …

This item is available in full to subscribers.

Please log in to continue

Log in

Tower dodges major financial bullet

LCCMR accepts amendment to harbor grant that went awry

Posted

TOWER— City officials here have managed to avoid a potential financial calamity. This past Thursday, members of the Legislative-Citizens Commission on Minnesota Resources, or LCCMR, voted unanimously to accept an unprecedented retroactive amendment to a 2016 trails grant to the city of Tower, which will allow the city to receive $324,236 in grant funds that would have otherwise been forfeited.
An additional $19,467 from a 2017 grant proposal may be forthcoming depending on legislative action later this year. The city still has to submit a final grant report that aligns with the language in the amendment, but that should be done shortly.
The city already expended the funds for work for a walkway, lighting and a floating dock installed at the harbor in the spring of 2019. But because that work was not done according to the work plan that the LCCMR had originally approved, state officials had blocked reimbursement of the funds. Former clerk-treasurer Linda Keith had failed to submit the required amendment for the significant changes that she and the city’s engineer had made in the project. She also failed to submit timely or accurate progress reports as required. Her actions had put the grant funds at risk of cancellation, and that prospect could well have left the city short of funds to pay for operations and payroll later this winter.
“This was essential for the city for the LCCMR to approve these amendments,” said Tower Clerk-Treasurer Victoria Ranua, who predicted the city would have faced a “pretty dire situation” by March or April of this year. The city was forced to undertake emergency borrowing last fall to make good on financial commitments, including completing payment for the harbor work. The city has since repaid nearly $500,000 of those borrowed funds, but still owes $250,000 to the League of Minnesota Cities Insurance Trust.
The decision by the LCCMR took months of work by city grant manager Nancy Larson to achieve. In addition, Ranua, who has managed major LCCMR grants for a nonprofit organization in the recent past, made the case for the city in person at last week’s hearing in St. Paul.
While members of the commission expressed concern about setting a precedent for such allowances on future projects, Larson had built a strong case that the city could still achieve the goals of the project assuming that a $600,000 grant for the second phase of the project is approved by the Legislature this session. The LCCMR had already approved the second phase funding but the mismanagement of the first phase prompted state officials to put those funds on hold, at least temporarily.
In making the city’s case, Ranua told LCCMR board members that the financial implications would be severe for the city if they rejected the amendment, which would have cost the city nearly $350,000. “I told them the [grant funding] was nearly as much as the city’s entire property tax levy, most of which ended up being spent on a floating dock in the harbor,” said Ranua. The floating dock was never part of the original LCCMR proposal.
“I’m glad we could pull this together,” said state Rep. Rob Ecklund,  DFL, International Falls, a member of the LCCMR board who advocated for allowing the amendment. “The city kind of got itself in a jackpot,” said Ecklund. “The new mayor and city staff, and volunteers like Nancy Larson, have been working hard to get things turned around.”
Approval of the amendment also means the city should now be able to finish the project, including adding a trail connection to Hoodoo Point, a trail kiosk, and installation of signage for a kayak route. Work on that second phase of the project will be reimbursable up to $600,000 assuming that the Legislature approves the adjustment, as is expected. The city won’t be expending any additional funds for the project, however, until the legislative language is approved.
The amendment also extends the date for completion of that second phase of the work from June 30 of this year to Sept. 30, 2021.

Comments

2 comments on this story | Please log in to comment by clicking here
Please log in or register to add your comment
A onymouse

So Tower screwed up badly, on a boondoggle project, and the state fund has to bail them out? Did it really say $350k for a floating dock?

Sunday, January 26
Lee Peterson

I am assuming that when the City paid the contractor and the city engineer for this Harbor Project work even though the grant was being held up due to unapproved changes to the Project, the money somehow came out of the Tower Area Ambulance fund. That Ambulance Fund is the only place in the City where $324,236 was lying around, apparently unprotected. The City Council has stated that it doesn't see a need to track the missing Ambulance Fund money. I guess I'm kind of tracking it for them. It's great that the City got the grant approved with the changes to the project. Now it would be nice if the City would show a little good faith to the TAAS member townships and restore a few hundred thousand dollars in missing money to the Ambulance Fund. Will this be done? It needs to be, and the City needs to begin living with what it can afford.

Monday, January 27