Planning a city budget is a daunting task, and in the wake of COVID-19 - the contagious respiratory illness caused by the coronavirus - that task becomes even more challenging.

As she does every year, Pequot Lakes City Administrator Nancy Malecha asked the city council for direction in preparing the 2021 budget.

“This year’s budget will be unbelievably hard because we don’t know the future,” council member Scott Pederson said at the Tuesday, May 5, council meeting conducted online via Zoom. “Everybody who pays taxes in our town is hurting. So will we have less or more money next year?”

He suggested targeting a 12%-15% reduction from this year’s budget, or perhaps a 4%-5% reduction in the city’s tax rate to give relief to businesses and homeowners.

“It’s going to take a lot of doing to get that done,” he said, including tightening the belt and eliminating capital expenses.

“We don’t know what the future is. It’s not like last year. We need to plan a recovery type budget, and if it doesn’t come (to that), we’re sitting in a good position,” Pederson said.

Malecha said a 12%-15% budget reduction equates to $214,000-$268,000; a 4%-5% tax rate reduction equates to $99,000-$129,000.

Pederson suggested a budget reduction in the $100,000-$150,000 range.

“It’s like operating a business where you’ve just lost a third of your business. What do you do? You cut your expenses,” he said, adding that to buy items now makes no sense.

Council member Jerry Akerson agreed it doesn’t make sense to spend any money now.

Council member Cheri Seils said it’s hard to plan a budget when the future is unknown. She suggested considering the proposed capital improvement plan and identifying what items can be delayed.

Malecha said she will present the preliminary budget to the council in August, and at that time the council can go through it closely. She’s told staff it will be a lean year.

The remainder of this year and 2021 will be a difficult time for spending, Pederson said.

“We need to save wherever we can. We need to cut expenses,” he said. “We don’t know how many businesses will be lost.”

The council also advised Malecha to look at the rest of the 2020 budget to identify any areas to reduce spending now.


The council authorized Malecha to apply for the SolSmart designation. Akerson abstained from the vote.

This would allow the city to consider green energy options like solar, including integrating solar systems into the city’s comprehensive plan, ordinances and permitting.

This program is available to municipalities and reduces unnecessary “soft costs” for residents, businesses and local governments interested in installing solar on property. Soft costs are not the hardware, but costs for such items as installation, labor and permitting.

In other business May 5, the council:

  • Heard an update on the Rasmussen Road and South Washington Avenue improvement project. The city’s engineering firm, Widseth, has weekly newsletters residents can receive via email or in their temporary mailboxes, or on the city’s website.

The council officially changed the date for the project to be substantially complete from Oct. 16 to July 2, and final completion from Nov. 27 to Aug. 14.

  • Accepted $11,485 in fire donations from the FM Area Foundation.

  • Learned the planning commission approved a conditional use permit for Sharon Thorson to operate a seasonal outdoor farmers market downtown.

  • Learned firefighters had eight calls in March, including six to Pequot Lakes and one each to Maple Township and Breezy Point.

  • Learned the police department had 204 calls for service in March. The department’s written report to the council noted that officers have personal protective equipment when responding to calls because of the COVID-19 pandemic, and they are educating the public about social distancing and the governor’s stay home order rather than aggressively enforcing it.

“We were very pleased with how our community embraced these difficult changes; the department only received a handful of complaints of people not following the executive order and offices were able to quickly diffuse the situations,” the report said.

The department’s Facebook page has been an essential tool to educate the public during the pandemic, the report said.

  • Agreed to amend the cemetery ordinance to better accommodate maintenance and to erect a sign displaying key rules in the cemetery.

  • Adopted a resolution supporting the establishment of a sustainable funding source outside of the workers’ compensation programs to pay for COVID-19 coverage for public safety and health care workers.

  • Acknowledged Edith Watson’s resignation from the Housing and Redevelopment Authority Commission. Her term would have expired at the end of 2022.

  • Approved the Heartland Cable Commission franchise fee distribution of $4,830 for upgrades to audio and visual technology equipment in the council chambers. Pederson voted no, suggesting the money could go toward Fourth of July fireworks.

  • Held a closed meeting to develop or consider offers or counteroffers for the purchase of property permanent easements of several properties on Rasmussen Road.

Nancy Vogt may be reached at 218-855-5877 or Follow her on Facebook and on Twitter at