City gets rave reviews on 2024 annual audit

By Robert Williams

Editor

The Vergas City Council held a special meeting on Wednesday, July 2, to appoint a new mayor and examine the city’s 2024 annual audit.

The mayor position was officially vacated upon the resignation of Mayor Dwight Lundgren, which he announced in June and was willing to remain in office until this month’s meeting scheduled for Monday June 14.

At Wednesday’s special meeting, council member Bruce Albright made a resolution to appoint Bruhn to replace Lundgren. Lundgren cited his health as the reason for his resignation. He stated his willingness to remain involved with the city in a consulting role, especially with Mike DuFrane’s utilities department. Lundgren has decades of experience working for multiple cities in Minnesota, including Two Harbors, Perham and Park Rapids.

Bruhn noted she was approached by several residents to return to the mayor role, which directly impacted her decision to do so.

“I kind of got convinced to do it, but I look forward to finishing off that year-and-a-half and continuing the work with the city,” Bruhn said. “We’ve got some good things started. 

Bruhn was in attendance at Wednesday’s meeting to receive the Minnesota GreenSteps award the city was given in Duluth in late June, an energy efficiency program award she spearheaded as mayor. However, she was not in attendance when Albright brought his resolution to appoint her to a vote. Bruhn officially accepted the appointment via telephone later in the day.

“It was mentioned to me that was the direction they wanted to go and I had to think about it,” she said. “Then they called and talked to me about it and I said okay, I’ll do it. Not much has changed since I left. It hasn’t been that long. We can kind of pick up where we were.”

Lundgren has been in office since January 1 after defeating Bruhn in the November election by a mere 10 votes 118-108.

“On behalf of the council and the city, we’d like to thank you for all the work you have done for the city,” Lundgren said during the GreenSteps award announcement. “You have done some wonderful things and we appreciate it.”

Bruhn will be traveling out of the country in July and will not be sworn in until Monday, Aug. 11. Until then, council member James Stenger will serve as acting mayor. 

Stenger has only been on the council since January after he finished with the second-highest vote total for a council seat (109), behind only Albright (114).

In his resolution, Albright stated Bruhn has truly been a leader for the City of Vergas and she was willing to fill out the interim position. The vote was unanimous.

Albright also thanked Lundgren for his efforts.

“We wish you well in whatever the future holds for you and your wife,” said Albright. “You brought a lot of city expertise to the position.”

The city did receive interest in the mayor position from former mayor and council member Dean Haarstick, Albright and Chairman of the Planning Commission Alex Ohman.

Audit

Colleen Hoffman, of Hoffman, Philipp, & Knutson PLLC, gave Vergas rave reviews after completing and presenting the city’s annual audit at Wednesday’s meeting.

Hoffmann complimented city officials on their procedure and willingness to ask questions and both parties benefit from a lengthy partnership.

“These long term relationships are important because you understand the records; you understand how Julie (Lammers) keeps track of things,” Albright said.

Hoffman provided a brief overview of the audit to council members.

“The City of Vergas had a net gain in equity of $300,000 overall, for the year,” she said. “That is everything you own as opposed to everything you owe.”

The value of the city went up $300,000 in 2024.

“Which is really great because you’re at a $4 million net value now,” Hoffman said. 

Hoffman also cited the liquor fund and store manager Kyle Theisen for his efforts.

“They were able to transfer $25,000 to the general fund and have money left over; he’s doing a great job over there,” Hoffman said. 

Vergas also received profits from water and sewer.

“Water is making enough to pay off their bonds, so that’s great news,” Hoffman said. “Your rates are looking good as far as what you’re charging right now.”

Hoffman cited the communication of city employees as another big positive, echoed by the former mayor.

“Everybody should know what’s going on at all times,” said Lundgren.

Lammers has also introduced a five and 10-year capital improvement plan.

The increasing cost of road projects has caused city officials to look ahead for funding.

“We’re trying to get ahead,” said Albright.

The success of this year’s audit will also help in future funding pursuits.

“Having such a good audit also helps you with that lower bond interest rate,” Hoffman said.

Parking lot

The council has approved the parking lot and alley paving project behind the government services building. 

Discussion has turned to how the city will pay for it. Lammers held a meeting with Jessica Green, Managing Director of Public Finance with Northland Securities, Vergas’ bonding company.

Lammers also met with Daren Berube, President of Vergas State Bank, who agreed to buy the bond, saving the city money by avoiding a search for bids and paying Northland Securities to complete that search.

According to Lammers, Vergas State Bank has purchased all but one bond for the city over the past 15 years. The lone bond was a 2019 road project where Northland Securities and Vergas State Bank each purchased half of the bond.

Total for the paving project is set at $191,755. The city has received confirmation on wanting the work done from neighboring businesses Hanson’s Plumbing and Heating and Vergas Hardware. The city is awaiting a decision from Paul Bruhn.

Special assessments from all three properties would provide the city approximately $30,000.

The city also has a grant of $25,000 from Otter Tail County, the previous owner of the property and garage that was torn down.

That leaves a total of $135,923.40 to finance and a total bond amount of $151,000 that includes payments to Northland Securities.

The council had to decide between a 10 or 15-year term debt.

“It’s going to cost a little more to go 10 years, but cities can only bond so much,” said Lammers. “On a project of this size, I would recommend doing the 10-year, so that when we have the larger street projects and things like that.”

The 10-year bond would save residents of Vergas approximately $35,000 over the 15-year bond.

The council approved the 10-year bond unanimously.

Sewer lift station

DuFrane presented three estimates to repair the sewer lift station at County Roads 4 and 60. He recommended North Dakota Sewage Pump Company’s bid of $3,695 to fix the lift station and to pull the pump to see if it can be rebuilt rather than be replaced.

Lundgren advised the council to go with North Dakota Sewage Pump Company based on his 25 years of working with them and the bid was approved.