The East Grand Forks City Council sidestepped a proposal made by Councilman Marc DeMers to transfer $1 million to the Economic Development Authority to loan to businesses in need. Rather than reworking the budget, the City Council approved the 2021 budget as presented.
The 2021 budget for East Grand Forks will be supported by a 5% increase in the city's tax levy. Both the increase in taxes and $11,868,084 in expenditures was approved by the East Grand Forks City Council during a meeting held Tuesday, Dec. 15.
The $11.86 million in expenditures in the 2021 budget would outstrip the city’s predicted revenue by about $253,000. However, the city does have strong cash reserves, which totaled about $6.5 million at the end of 2019, according to an annual financial report for that year.
And it was those strong cash reserves that led DeMers to ask his fellow council members to transfer some of it to the Economic Development Authority for local businesses.
"We have a large part of our business community that is bearing the brunt of this pandemic," DeMers said. "I am concerned that the state and federal legislation is not going to be enough in enough time to fill the urgent need that is required right now for businesses in East Grand Forks."
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DeMers suggested that the Water and Light fund could provide $500,000 and the city could move another $500,000 to make the requested $1 million.
"This is not hyperbole. This is real. They are not suffering, they are dying. What is important for the city is vitality. If we allow a business to fail, we start a negative cycle in East Grand Forks that is hard to recover from," he said.
However, DeMers faced considerable concern from other members of the council that the city may need that money as the pandemic continues and that compensating one group of people over another group might not be fair.
"What if things go awry? I just can't say yes to spending $1 million when we don't know what's coming in the future," Councilman Chad Grassel countered.
There was no vote on DeMers' proposal.
Others on the council railed against the federal government for its lack of action and against the state government, and particularly Gov. Tim Walz, for not doing enough. Several agreed that restaurants and bars should be allowed to re-open.
That matter was left to be reconsidered by the council in January.
