Full scope of city finances given to Bemidji Council

Bemidji City Hall 2020 web art.jpg
Bemidji City Hall.

BEMIDJI -- Relief for coronavirus impacts, next year's budget, and other financial subjects were discussed by the Bemidji City Council during a work session on Monday.

City Finance Director Ron Eischens started off the meeting with a multi-part presentation covering the expectations for 2021. According to the report, Eischens is working on ways to have a budget with a zero tax rate increase.

Eischens said the city's tax rate has stayed the same since 2015 thanks to market value growth. Looking ahead to 2021, Eischens said the city can utilize the property value from recently annexed land that was formerly in Northern Township, along with new construction, to make that goal.

Making the goal of a zero rate increase, though, would also require reducing the Sanford Center's capital maintenance funding by $200,000 and raising fees rather than levying $40,000 for street work. Additionally, Eischens said the budget can accommodate $26,000 in bond interest savings.

The city council is expected to take additional action on the budget and levy next month. During a discussion on options to meet the zero rate tax increase, council members raised some concerns.


Ward 3 Council member Ron Johnson said he was unsure of increasing fees for street maintenance. Ward 5 Council member Nancy Erickson, meanwhile, said she had concerns on reducing the capital maintenance funding for the Sanford Center.

More information shared by Eischens Monday showed the city is expected to have a revenue increase of $396,000 and a rise in expenses of $793,200. When incorporating that data, a levy increase is estimated at $397,200, or a 6.5% increase from 2020.

When incorporating the suggested changes, along with annexation and new construction impacts, the effective increase would be zero.

Another subject covered in Eischens' presentation was expected Local Government Aid in 2021. LGA is funding provided to cities by the state government, especially to those with large amounts of non-taxable property.

Bemidji is made up of nearly 50% non-taxable property, as it's home to several medical facilities, colleges and state offices. Eischens said the city can potentially use LGA for increases to operational budgets in all of the budgets.

The LGA can also be used for staff changes or reducing property taxes.

COVID-19 relief and Sanford Center funding

Eischens also discussed financial relief to the city for the coronavirus, totaling at $1.16 million. According to the report, the funds must be related to the COVID-19 impact.

To date, Eischens said $50,000 has been spent for protective equipment, sneeze guards and cleaning supplies. Additionally, reimbursement for staff time, through Nov. 15, is projected $1 million.


He said the dollars provided should result in a 2020 budget surplus at the end of the year. As a result, such a surplus can be used to deal with future costs.

Eischens also said his office has to report the city’s COVID-19 funding decisions by Sept. 9. The council is expected to revisit the subject on Sept. 8.

Financial operations at the Sanford Center were also covered in Eischens' presentation Monday. According to the report, BSU has requested for ice to be installed in September for upcoming hockey practices.

Last week, city officials spoke with BSU representatives about a potential modified lease. Eischens said a possible modified agreement would include $145,000 for ice utilities and labor costs.

The lease would also set an amount of up to $255,344 for BSU to pay by the end of its fiscal year on June 30, 2021. That amount was chosen as it's the estimated total amount BSU pays for a full 20 game schedule.

Currently, this year's BSU hockey season is still undetermined. BSU's programs play at the city-owned Sanford Center, which is managed by the Ames, Iowa-based company VenuWorks.

Any proposed modified lease will have to come back before the city council for approval.

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