News

Finance committee holds meeting

Scott Wagar

06/12/2012

A special meeting was held on June 6 with the city’s finance committee and Bottineau’s EDC director, Diane Olson, to discuss the Gateway fund and the difficulties the fund is having at the moment with its expended budget in loans and grants so early in the year.

The special meeting came to be during the May city council meeting when the EDC office requested $61,800 loan from the Gateway fund to assist the new NAPA store on Hwy 5 for its start up cost. The request brought Penny Nostdahl, Bottineau’s city auditor, to the table stating the Gateway fund for 2012 had little money left in it due to the amount of money that had already been given out since January of 2012. She added that the fund would almost be depleted if they approved NAPA’s request.

With Nostdahl’s warning, the council voted in favor of approving the Gateway loan, leaving the planned budget for the 2012 Gateway loans and grants at $22,500, which started at $150,000 in January of this year.

The special meeting was called by the newest alderman of the council and finance committee, Greg Bernstein, who replaced Andy Freemen on the council after Freeman resigned from the council when he moved out of his ward.

Bernstein stated that as a new person to the council and financial committee he wanted to understand the Gateway fund more clearly and how the budget for the loans and grants became expended so quickly in the year.

Olson informed Bernstein that the requests which come through the EDC office have been increasing over the years, and that it is hard for her to budget ahead of time because she simply does not know what request are going to come to her office on any given day.

She also stated that over the past two years the council has taken money allocated for her loans and grants in the Gateway fund and used for other projects in the city, lowering her budget for Gateway’s requests. She added that even more funding was being taken out of the Gateway fund for another city project in the 2012 budget.

With that statement by Olson, Bernstein asked where the money was being allocated to. Nostdahl explained to Bernstein where the money was being transferred to, which is as follows:

 

  •  2010 - $50,000 was transferred out of the Gateway budget to go the new pool fund.
  •  2011 - $75,000 was transferred out of the Gateway budget with $25,000 to the new pool fund and $50,000 to the sidewalk, curb and gutter fund.
  •  2012 – It has been budgeted to remove $50,000 from the Gateway to go to the new pool fund.

 

At that time, Olson requested that the money be placed back into the Gateway fund because it was budgeted for her office.

The finance committee, (which is made up of Bernstein; Ben Aufforth, who was named to the committee after Brad Gangl resigned from the council and finance committee in early 2012; and Mayor Doug Marsden, who didn’t attend the special meeting) stated that they felt the money should be replaced back into the Gateway fund for Olson to assist her with her future projects.

It was decided by Bernstein and Aufforth that three issues would be recommended at the re-organizational meeting directly after the June election, which will included the following recommendations:

 

  •  The line item number in the 2012 budget for a transfer to the new pool fund be eliminated and placed in the Gateway fund’s loan and grant line item of the budget.
  •  Return, with the end of year transfers, the $50,000 that was transferred from the Gateway fund in 2011 to the sidewalk, curb and gutter fund.
  •  The possible return of some of the money transferred into the new pool fund to the Gateway fund from 2010 and 2011. However, this will need to be held off until it is determined what the cost are for the pool renovations as council already determined those costs were coming out of the new pool fund.

 

The Gateway fund was established to assist new businesses in start ups, expansions and locating, which provides a low interest rate with an extended payment plan.

The Gateway fund is controlled by three different entities, which includes the EDC board, Gateway committee and Bottineau’s city council members. All three entities must vote in favor for the money to be appropriated, with the EDC conducting the first vote, then the Gateway committee with the final vote by the city council.

The Gateway fund receives its funding through 40 percent of a one percent sale tax in the community, along with loans that are being paid back to the Gateway. The amount of money in the Gateway fund also differs each month as sales tax revenues and loan payments come into the EDC office.

Each year, the city legally has to budget for the Gateway fund. In 2012, the city estimated that the Gateway would receive around $273,500 in revenue from the sales tax, with $150,000 being budgeted for Gateway loans and grants and the remainder for EDC salaries and other expenses.

In the June 6 meeting, it was learned through Olson that even though a $150,000 is budgeted for Gateway loans and grants, once salaries and other expenses are paid, the remaining money left over is for her to use with Gateway’s request for projects that come into her office. She also stated in the meeting that she has "multiple channels" to obtain money for projects which come into the EDC office.

However, Nostdahl reminded Olson that there are some expensive Gateway projects coming up in the city which need to be funded, and that the only way to budget these projects, considering how low the budget is now, is to try and save as much money as possible for the future projects. Nostdahl gave the example of the new daycare center at Dakota College at Bottineau and pointed out that with so little money now in the Gateway fund, the financing of the day care might be difficult for 2012.

Nostdahl added that at the end of May, the Gateway loan and grants budget was at $22,500 with $271,000 remaining in the overall fund for 2012.

Nostdahl pointed out, too, that of the $271,000 in the Gateway fund at the end of May, $61,300 will go to the NAPA loan unless otherwise decided; $42,000 will go to salaries and office expenses in July; and additional $5,000 for office expenses, leaving a remainder $162,700 for a total balance. However, she stated that money will also be coming into the Gateway from sales tax and payment of loans.

The meeting ended with the two groups stating that thy wanted to see economic development grow in Bottineau and that the council and EDC office needed to keep a clear communication channel open, so that the two entities could assist one another.

As for the future of the EDC’s Gateway money coming back to Olson’s budget, that is now up to the council to make that decision.