The Cook County- Grand Marais Economic Development Authority (EDA) continues to wait for revenue from a number of sources to help it meet its financial obligations. At the January 12, 2010 meeting, check writing— including payment of the director’s wages—was put off until after a special meeting to discuss finances at 1:00 p.m. on Tuesday, January 26.
Treasurer Jim Hall said the December 31, 2009 balance sheet showing a deficit of $32,936.44 was incorrect, as the EDA had received the loan for $31,000 that it had requested from Cook County. However, after paying the final bills of 2009, Hall said, “If my calculations are right, we have about $600 in our checkbook.”
Hall said that is not enough to pay the routine January bills, not to mention the EDA’s share of the director’s insurance premium, legal expenses, insurance, office services from the city of Grand Marais, and EDA Director Matt Geretschlaeger’s wages.
IRR grants help city
Throughout the meeting, the EDA discussed the status of incoming grant funding and potential revenue, which could improve its financial situation. Director Geretschlaeger said he had good news about the amendment it had been pursuing for an Iron Range Resources (IRR) grant. A request had been granted to use an IRR grant to fund a water system lift-station for the Sawtooth Mountain Cottages residential development adjacent to Cedar Grove Business Park. When it was determined that the residential development was not economically feasible, it was shelved, but the EDA asked to use the money for other purposes, namely to cover business park expenses. The EDA sought assistance from Senator Tom Bakk and Representative David Dill, who Board Member Hal Greenwood said were very helpful. With the legislative assistance, the EDA was given authorization to use the grant funds to pay for infrastructure at the business park. The grant money will be used to pay bond interest costs for the business park, which will relieve the financial burden on the city of Grand Marais, but it will not help the EDA’s immediate financial problems.
Another IRR grant, which funded the paving of cart paths at Superior National at Lutsen golf course, will be in the EDA’s hands soon. Geretschlaeger said the IRR grant of $100,000 has been distributed to the township of Lutsen, which is the fiscal agent for the grant. At Lutsen’s January meeting on Tuesday, January 19, the money should be released to the EDA. However, that money too, has been earmarked for debt repayment. The EDA still owes $100,000 each to the city of Grand Marais and Cook County.
EDA Board Member Jan Sivertson, the Grand Marais city council representative on the EDA board noted that she had a council meeting the next evening. “I need an answer. When we get that money from Lutsen, do we intend to pay back the city?”
After discussion the board agreed it should use the grant money to pay its debt to the city of Grand Marais. Sivertson said, “The city is on the hook for the [business park] bond payment, so it makes sense to pay the city. The county owns the golf course.”
A motion passed with EDA Board Member Bruce Martinson, also a county commissioner, casting the only nay. He explained, “I do agree that this is fair, since the city is stuck with the business park debt. It’s fair that the county takes care of the golf course. But I still have to vote no.”
Possible money from storm, wetlands
Director Geretschlaeger said the EDA would soon be receiving $114,000 from the Department of Employment & Economic Development (DEED) to be used to repair damage to the Cedar Grove Business Park during the June 6, 2009 rainstorm. But that money is delayed as the EDA continues negotiations with the original business park contractor regarding whether all of the construction specifications were met.
Another potential source of revenue that may put the EDA back in the black is the sale of the wetland credits the authority has banked, a value of $150,000. Or, alternatively, the EDA could exchange the wetland credits with the county to repay its $100,000 loan. EDA Board Member Bruce Martinson said county staff is researching the sale of the wetland credits. He said the EDA could expect to pay about $5,000 in set-up fees. Theboard passed a unanimous motion to pursue the sale or a possible trade with the county.
In the meantime, Martinson said the budget committee had looked closely at its options and had considered eliminating staff. He said it was agreed that the housing coordinator, an expense of $30,000, was something that should be continued, as the program has been successful. Martinson referred to the yearend report on the MN Small Cities Development Program (SCDP). He said the efforts of contracted housing coordinator Nancy Grabko had garnered $671,576 in SCDP funding for Cook and Lake counties. The “lion’s share,” according to Grabko, went to Cook County. She said $440,000 of the grant went to Cook County for housing rehabs and for sewer assessments for Creechville residents.
Martinson said the only other staff member was the director and, he said, if the director was let go, the EDA might as well close its doors. “But we may have no choice if we don’t sell those wetland credits,” he said.
No pay for director?
As the EDA board continues to try to improve its financial situation, Director Geretschlaeger has agreed to wait for his wages. The board asked Chair Mike Littfin to contact the EDA’s attorney, Mike Hero, to draw up an agreement to that effect. After the January 12 meeting, Littfin confirmed that the plan at this time is to postpone payment to the EDA director. “Matt has agreed to work for a time, with the understanding that he will eventually be paid,” said Littfin.
Geretschlaeger said he had not been paid “for a couple of weeks.” Reached by telephone the day after the meeting, Geretschlaeger said he was sure the EDA’s bills will be paid at the January 26 meeting, but it was unclear how he would be paid. “I expect that I will not be paid a salary until June,” he said. Thatis when the EDA will receive a portion of its levy.
Geretschlaeger said EDA counsel will draw up an agreement, but said, “I’m willing to consider this. I’ve agreed to it in concept.”
Asked why he is willing to work with delayed compensation, Geretschlaeger said, “I want to see this thing work. We’ve come a long way and we have some traction. We have a long way to go, but to end the EDA’s work now just doesn’t seem wise.”
In other business:
»»Superior National at Lutsen Golf Course Manager Greg
Leland said a six-hour Christmas sale had resulted in
$33,000 in memberships.
»»Golf course Grounds Superintendent Mike Davies said
the December storms left the golf course with “a mess.”
He said 1-3-inches of ice might damage the turf. He
spread black organic material on the greens, hoping to
stimulate some melting, but he said he is very concerned
about how the course will survive the winter.
»»Davies also asked the EDA board to consider hiring
another staffer to work on equipment over the winter.
He said as equipment ages, Mechanic Jim Zunker has to
do more than change oil and belts. He said some maintenance
projects are “major” and more help is needed.
The board agreed that another worker was needed, but
not until February.
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