Shutdown could affect city long-termPublished 11:19am Thursday, July 7, 2011
Right now, Fergus Falls’ city operations aren’t suffering too much from a government shutdown. That could change if a budget bill isn’t approved by the Legislature and the governor’s office soon.
Potentially the biggest hiccup is the Tower Road bridge project. City Engineer Dan Edwards explained that the city opens bids for the project on July 21. However, since there are state and federal dollars involved, the Minnesota Department of Transportation (MnDOT) needs to sign off on some equal opportunity provisions for the contractor before work can begin.
“Without any MnDOT employees being there to review, we wouldn’t be able to award the contract,” Edwards remarked.
The city has a couple of options if this happens. It could move the bid opening date back or extend the amount of time it holds on to the bids. Either way, a delay in approval would also delay construction for a project that has already seen considerable schedule setbacks due to other circumstances, most notably the right-of-way agreements with railroad companies that pushed back the project by months.
Financial aid, perhaps the most worrisome issue for cities, has now been accounted for, as city advocacy groups successfully pled their case before district court that Local Government Aid (LGA) and Market Value Homestead Credit dollars should be paid to cities whether the state is shut down or not.
“Regardless of what staff they have on (hand) come July 20, if there still is a shutdown, they will be directed to make those payments to us,” City Administrator Mark Sievert of the state’s Department of Revenue.
In 2010, Fergus Falls received $3.5 million in LGA, the same amount it has planned to receive this year. The Department of Revenue has said it should expect just over $4 million, but the city’s Finance Department traditionally plans for less than promised because LGA is often cut during budget negotiations. With the court order, however, the city will likely receive around $2 million on July 20, when the first half of their LGA payment is due. If the shutdown was not occurring, the city would have expected approximately $1.8 million.
“We’re certainly not going to spend that additional amount because what I would assume is that when all is said and done and the shutdown is over and the Legislature and governor come to a solution on the budget, LGA cuts will be part of that,” Sievert explained.
On the city construction side, things get trickier. In addition to the bridge project, Edwards said the community arena project has all of the state approvals it needs for the moment, but if the state is still shut down when the project is finished, the city might not be able to get final building inspections.
“If this extends on for two or three months, then we could start to see some issues,” he said.
Edwards also reported that the Friberg Avenue restriping and road work should continue as scheduled, as private companies have been found to do testing on the road. That project is scheduled to be done before the school year begins.Tags: city council, government shutdown