PEQUOT LAKES — Pequot Lakes City Council members are determined to increase the transparency of the Pequot Lakes Housing and Redevelopment Authority after they found themselves approving the HRA levy with very little information where that money has been going.
The council called a special meeting Monday, Sept. 26, after receiving a levy request from the HRA. Had the council not approved the levy before the end of the month, it would have been too late.
The council approved a preliminary general revenue tax levy of $2,251,135 on Tuesday, Sept. 6, but the HRA had not submitted a levy request at that time.
The HRA apparently created its levy request July 14 for its annual submission to the city, but never sent it to the city. The HRA was seeking a levy of $49,752, approximately $2,000 more than in 2021.
While Mayor Tyler Gardner and council members Dan Ronning and Scott Pederson were not pleased with the levy amount, and especially the lack of budget information, they approved the levy because the city is on the hook for that money either way.
In 2003, the city signed documents for a bond for the West Grove Townhomes, making the city the party responsible for covering any shortfalls in the Westgrove budget for debt service and operations. That means the city can choose not to approve the levy for the facility, but that would likely lead to litigation with the city paying for the debt service, operations and legal fees.
That doesn’t mean council members were happy about the prospect, especially not knowing why the levy keeps growing.
“I don’t understand how we keep getting deeper in the hole,” said Ronning.
Council members reviewed the scant documentation provided to them, a cash flow projection lacking the details of a formal budget, and had many questions that were left unanswered at this point.
One question raised were two items on the projection, one for lawn care and one for landscaping. The council could not say why these were separate items.
“If I get questions on this I have to throw my hands up and say I don’t know,” said Pederson. “That’s where we are at.”
The council as a whole was not entirely satisfied to approve a levy without clear documentation.
The Pequot Lakes HRA, however, is an independent entity not beholden to the city council, even though the council is responsible for the HRA’s levy. Getting budget information from the HRA has proven difficult so far, as Gardner said he has been told by the HRA director that those documents are private.
City Administrator Rich Spiczka said budget documents are supposed to be public information. According to past conversations with Minnesota Newspaper Association Attorney Mark Anfinson, that is correct.
“We are being told public data is not public to us,” Spiczka said. “We are not allowed to have it, which I think is completely not factual.”
Because the HRA is a government entity publicly formed and funded through a tax levy, their documents are public under the same Minnesota statutes as cities, school boards and other entities. Private documents would be limited then to those that reveal employee data and resident data, neither of which would traditionally be included in a budget.
Spiczka said it might not just be an issue of not understanding the public nature of those documents, but a lack of resources wielded by the HRA, being significantly smaller and with fewer resources than most cities.
The HRA board also seems to lack certain experience. At meetings, Gardner and Spiczka have noticed that almost all questions the five-member board receives are deferred to the director, an employee of the board. This director is the individual who told Gardner that the HRA budget documents were private.
The council still would like more information so they know how to answer questions from their constituents.
“We should know every dollar received and every dollar spent,” Gardner said, specifying that it doesn’t need to name the person who that money went to.
Gardner specified that they are not looking to hold sway over the HRA, but as the entity responsible for the HRA levy, they need to know where that money is going and why that tax burden for Pequot Lakes residents keeps growing so they can answer questions from Pequot Lakes constituents.
The council agreed it would be best to open a line of dialogue with the HRA board through a joint work session. Spiczka said they will work to find a date that works. Spiczka also asked board members to write down questions they wish to have answered to ensure they bring those up at the joint meeting.
The HRA board meets the second Friday of each month. The city council appoints the board, each member to a five-year term. Those terms are staggered so that only one term expires each year.
Travis Grimler is a staff writer for the Pineandlakes Echo Journal weekly newspaper in Pequot Lakes/Pine River. He may be reached at 218-855-5853 or travis.grimler@pineandlakes.com.
