Office space issues continue; Audit completed; Wannigan delayed

By Robert Williams

Editor

An offer of $65,000 for the purchase of the building at 207 Main Avenue West from Roger Boe that was approved by the council in May was rescinded after a testy and lengthy conversation, along with three motions, regarding finding the right property to expand space for the city administration, the police and fire departments at the latest Frazee city council meeting Monday, Aug. 15..

Council member Nicole Strand and Mayor Ken Miosek exchanged words about the intended purchase, with Strand focusing on past ineffective procedures involved in this and other passed resolutions.

“Two months ago, we sat here as a council, we discussed it, we toured it and we agreed to make a purchase. In my head, within the next 30 days, the city should have approached him and said this is what we agreed on as a city council, the five of us sitting here, and it should have been done within 30 days, not 60 days and we still don’t own the building.”

Nicole Strand, Frazee City Council member

Conversations between the city attorney and administration about the purchase delayed some action, along with a missed meeting between the mayor and Boe.

According to Boe, the purchase never came close to happening.

“Flemmer called me and said it was going to cost too much and not really a good idea to add on to the police station and go that route and it would be much better if they had a new building,” Boe said. “They talked about moving the police out to the rescue squad and then that didn’t really make sense. Then somebody brought up my building across the street might be up for sale. Flemmer called me and asked if I wanted to sell it and if I would sell it for $65,000 and I said I would entertain that. I think he talked to me one other time a week or two later and then I saw in the paper that they bought the building. Nobody other than Flemmer ever talked to me about that building. The mayor stopped into my store in July while I was in Texas. You know, I have a phone. I answer any call to my phone.”

Council member Mark Kemper, who abstained on the vote in May and was against the purchase, reiterated his stance.

“I still think it’s a waste of money and now that I see how much it’s going to cost to remodel it, it’s really a waste of money,” he said.

Strand was adamant about the ineffective nature of the board in recent situations like this.

The mayor rebutted with how acquiring more information about the purchase led to indecision. Flemmer deflected to other options of space available in the city.

“I think we should go to our original plan adding on to this building (City admin/fire hall),” said mayor Miosek.

Strand was right back on the procedural horse.

“But we had approved that at one point too and nothing happened with that,” she said. “So, that’s two things we have done to try to fix the space problem that have been approved through a city council meeting where no follow up action has occurred.”

According to the mayor, potential funding and the contractor for that job both fell through.

After further discussions between Flemmer, Miosek and Kemper going over potential options that have been discussed in prior meetings, Strand was obviously frustrated.

“It’s not just this. It seems a lot of things in the last year-and-a-half we just chase our tails, chase our tails. Talk about it at every meeting, make a motion, pass a motion. It gets frustrating and if it frustrates me I can only imagine how it frustrates other people who are not only a part of city council, but also the people who live in this town who read in the newspaper—oh the city council made a motion to pass this and nothing happens. That is not why I became a city council member to sit up here and flap my gums and not have anything happen. It irritated me as somebody who lived in this town to sit here and watch nothing happen. I’m not going to be a part of that. If we want to rescind the motion to buy the building that’s fine, but I want action on whatever we choose to do.”

Nicole Strand

Kemper made a motion to rescind the offer, but got no second at the one-hour mark of the meeting.

Mayor Miosek proceeded after the result of no second to the motion proposing to have the city attorney draft a purchase order for the Boe property. 

Sharp, Flemmer and city administrator Jordin Roberts discussed funding available to remodel the building. COVID-19 grant money of $120,000 was not available for exterior improvements, something the council was under the assumption was plausible.

A purchase of the building for cold storage for the fire department eventually was shot down as well, despite a lukewarm agreement by Jason Kropuenske of the fire department that it could work for the fire department’s needs. Kropuenske also reiterated that the department can get by with a Conex storage container rather than the Boe building.

The mayor brought up Kemper’s motion to rescind the money offered for the purchase of the Boe building looking for a second. Again, nothing. 

“We do need more room, but we don’t need it today,” Kropuenske said. “I don’t want to see the city buy this building for us and stick money into fixing a roof on it and have the city lose money. I’m also talking as a resident of the city.”

Miosek redirected the conversation.

“The biggest problem we have and what we started out with was space for the admin and now we’re not even talking about that and I think that’s the first thing we need to do is get space for the admin,” he said. “That’s what we started on, that’s what we need to finish with before we expand everywhere else.”

Kemper’s motion to rescind the offer was put up a third time, immediately seconded by Flemmer and finally passed unanimously.

“We’re back at square one again,” said Flemmer.

The space conversation continued for 15 more minutes including utility superintendent Larry Stephenson, Roberts and Chief of Police Tyler Trieglaff. Talk concerning adding more office space on the fire hall and city offices that would include more space for police and city admin gained some traction.

Finally, at the 97-minute mark, a Strand motion to obtain bids and designs for an addition on the back of the city hall for police/admin space was approved unanimously.

Annual financial audit completed

Colleen Hoffman, managing partner at Hoffman, Philipp, & Knutson accounting firm in Thief River Falls, presented the 2021 audit of the city with both positive and negative connotations in her presentation.

“I don’t have any concerns about the financial position of the city; I think it’s okay,” she said.

Hoffman agreed the event center and liquor store are high, fiscal priorities to city officials.

The liquor store profited $50,000 in 2021, but Hoffman suggested a full-time manager would help with current inventory issues between both businesses.

The city council discussed hiring a manager at the July meeting.

Hoffman also suggested a potential sewer bill hike to counter the high costs of construction going on in town.

The city’s budget is currently at $11 million.

“That’s a big budget; that’s a lot of money for you to be in charge of and managing,” Hoffman said.

One missing part of the budget that caught Hoffman’s eye was the April 2021 purchase of a new fire truck. The purchase was not in the books and Hoffman was less than pleased at how the purchase was handled. 

The truck was purchased with FEMA grant money and a loan. The grant covered $391,000 of the $531,000 total cost. The loan covered the remainder.

“You do not get money and borrow money and keep it a secret outside of the city books,” Hoffman said. “Yes, the clerk, the mayor and the fire chief signed off on a $200,000 loan at the bank, which is not a legitimate way for the city to borrow money, and yes they signed off on the grant application for this half million in federal money, which triggered this federal audit. Which is fine, it’s fine you got the money. I’m thrilled you got the money and I’m thrilled you got the truck. I just don’t appreciate having the bank be the fiscal agent for the whole transaction to keep it off the city books. None of the bills came to the council for approval.”

The purchase was made while former city administrator Denise Anderson was leaving the job, set to retire in July of 2021. 

Hoffman noted sternly how making secret purchases outside of the books was a big no-no.

Multiple members of the board retorted that the purchase was no secret.

“It wasn’t a secret but it wasn’t in the city’s books, it wasn’t in the city’s control system,” said Hoffman. “It wasn’t in the city’s financial statements. The banker did all the book work. Everything was done okay, but I don’t want federal findings in my audits. Don’t do it again.”

Hoffman included a written explanation and a corrective action plan in order to finalize the audit that included the truck purchase.

“The action plan is this will not happen again,” she said. “The city council has received education on not doing transactions for the city that are not on the city’s books. Every bill paid by the city council needs to be paid by the city council and not by the banker to the vendors.”

Her rebuke started a procedural theme for the meeting.

“I’m really happy that you found federal money to pay for it; that was just brilliant, it really was,” she said. “It’s just the mechanics of getting it done and there was turnover at the time and maybe they just needed to hurry up and get it done. The federal grant went right to the bank. It was pretty safe. It should have gone to the city’s bank account.”

Hoffman was complimentary of current city administrator Jordin Roberts and the working relationship with her office.

“I’ve really enjoyed working with Jordin and Nancy (Kiehl),” she said. “It’s cleaned up—the books are looking really good.”

She also complimented the city’s progression in her decade of auditing Frazee’s finances.

“The growth is wonderful,” Hoffman said. “It’s exciting to see the city growing and being able to pay bills and expanding the water and sewer and street infrastructure. Everything looks good that way.”