The city’s ambulance fund has become a focal point of concern due to its increasing deficit, projected to reach $2.5 million by the end of 2026. This deficit has not been fully reflected in the city’s financial statements, raising alarms about fiscal transparency and sustainability. A council member highlighted the lack of external support, particularly from neighboring municipalities, in establishing a joint powers taxing district to fund the ambulance service. This absence of collaboration has left the city reliant on municipal levy tax dollars to cover the shortfall, a solution that, while necessary, has proven unpopular.

One council member emphasized the reliance on Local Government Aid (LGA) to balance the financial disparities faced by the city. They warned that without this aid, local taxpayers would bear a heavier burden, stating, “if we didn’t have it, we would have to levy that born on our own citizens.” Despite increases in LGA appropriations in recent years, there has been no allocation towards the ambulance service, exacerbating the financial strain.

Public comments reflected community concerns about the city’s financial management. Resident Alan Cruz expressed interest in relocating his business to the area but criticized the city’s reliance on LGA. He urged the council to use these funds to address underlying financial issues and promote growth rather than maintaining the status quo. Cruz also questioned the sustainability of local services, such as the ambulance service, without adequate funding.

Another financial matter discussed was the mill and overlay project, including the Steenberg edition and improvements to the library and city hall parking lot. City engineer Jason Fiser presented a single bid for the project, which surpassed the engineer’s estimate, primarily due to additional work such as stair replacements. Despite the higher cost, Fiser recommended proceeding with the project, citing the urgency of completing it within the summer timeline. The council approved the project unanimously after discussing funding reallocations to cover the shortfall.

The Ninth Street project was also a topic of interest. Funded partially by a $1.5 million state grant, this project involves reconstructing Ninth Street and adding a bike trail. The bid for this project came in lower than the estimate, allowing for the inclusion of lead service line replacements. Discussions highlighted the potential for additional funding in the future.

Ryan Schmidt from Schlenner Wenner and Co. presented the 2024 audit, confirming that the city’s financial practices were in compliance with Minnesota statutes and revealing no unusual activities. However, Schmidt flagged the ambulance fund for its growing deficit and reliance on borrowing from the general fund. This reliance could impact the city’s overall financial health if the fund cannot repay its debts.

The audit presentation included an analysis of the general fund, which showed revenues exceeding budgeted amounts but expenditures surpassing them by $1.3 million. This discrepancy was partly due to a new accounting standard requiring upfront recording of lease expenses. While investment income and insurance proceeds from a fire incident helped offset some costs, public works expenditures exceeded budgets due to landfill closeout costs and road repairs. The unrestricted portion of the fund balance was at just over 50% of annual expenditures, raising concerns about the city’s fiscal health.

Public comments continued, with resident Sharon Ball questioning the necessity of a $11.7 million loan to cover a bond. Ball expressed frustration over perceived accountability issues within the council and a lack of transparency. Joe Caner, another resident, raised concerns about the sourcing of materials for the water treatment plant, questioning whether they were funded through FEMA. The council clarified that the materials were locally sourced for landfill capping, not flood protection, and future flood protection measures could take years to implement.