Council follows recommendations on how to spend surplus

The Bemidji City Council approved recommendations from staff on how to spend a surplus of over $1 million.

The $1.1 million surplus is from budgeted staff time money not needing to be spent thanks to $1.2 million in CARES Act funding.

City Finance Director Ron Eischens said $115,000 of the funding was spent on PPE and technology to allow staff to work remotely, and the rest was used on staff hours directed to COVID-related activities.

The surplus will be divided into two “pots,” one for the general fund to restore a 50 percent fund balance, and the rest will be put towards paying down the South Shore bonds.

The City Fund Balance Policy states that the city should strive to maintain a 50 percent fund balance of the next year’s budget.

The fund balance can be used for cash flow purposes, such as internal financing and emergencies, as well as to pay bills.

The South Shore land, according to Eischens, was purchased just before the recession of 2008, which resulted in the land “not selling at the price or pace that was originally predicted.”

The bonds should be paid off in 2023 but the tax levy for them could have extended beyond that, as the South Shore land bonds have a negative cash balance of almost $300,000.

The council directed staff to use $450,585 of the surplus toward the fund balance, and the other $642,424 toward the land bonds.

View the full city council packet here.

Larissa Donovan is the News Director for the stations of Paul Bunyan Broadcasting and has been, almost without interruption, since Election Day 2016. She covers all the beats in north-central Minnesota, such as local government, crime, education, environment and social issues. She studied communications at Bemidji State University. You can follow along with Larissa's live tweets of meetings and events on Twitter!

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