Jorgens says city should invest more in CHEDA, even if it means cutting other areas of the budget

    When it comes to funding, this has been a unique year for the Crookston Housing & Economic Development Authority (CHEDA). With some additional state funding in its pocket in the form of an increased Local Government Aid (LGA) allocation from the legislature, the Crookston City Council voted to give CHEDA $200,000 in 2014 for Executive Director Craig Hoiseth and his board of directors to do with what they pleased.   

   It was divided into two $100,000 allocations. The first half helped launch a housing rehab program comprised of short-term, low interest loans given to developers/contractors to spruce up homes for owner-occupied or rental purposes. The program, which is expected to continue with the paid-back funds into the foreseeable future, got off to such a great start that CHEDA borrowed an additional $25,000 from another fund to make an additional loan possible.   

    No decisions have been made regarding how to spend the second $100,000 installment from the city to CHEDA.   

    This year's additional city investment in CHEDA is on top of an annual allocation to CHEDA that has varied somewhat over the years, depending on the city's overall budget situation. At its highest point years ago, it was at $125,000. When the city's budget was especially tight, the annual stipend paid to CHEDA was reduced to $80,000 at one point.   

     This year, the city is allocating $110,000 to CHEDA. At a CHEDA board discussion last week, most around the table seemed content to get the same amount from the city in 2015, and Finance Director Angel Hoeffner said at the moment that's the amount in next year's preliminary budget, too.   

    "I'm OK with staying at that number for next year," Hoiseth said. "Maybe we can ask for more investment seed money like this year, or just let the council deliberate the merits of that without an actual request from CHEDA."   

    Hoiseth said the allocation, which helps pay his salary, can get eaten up pretty quickly with other expenses. With CHEDA looking to buy the former Professional Building land, for $25,000, for residential housing purposes, and looking to spend another $25,000 to purchase the former Paint & Glass building downtown so it can be demolished to make room for a needed parking lot, he said the money goes fast.   

    Ward 1 Council Member Tom Jorgens said he's in favor of the city investing more money in CHEDA's strategic efforts, even if it means cutting other areas of the city budget.   

   "That $200,000 from the city was the best money the city's invested this year, and we're getting pretty good returns on it in terms of growth," he said. "If we don't  continue to do that kind of thing, we're not going to get growth, it's that simple. The tax base won't grow and down the road the revenues aren't going to be there."   

   Jorgens figures $200,000 might be insufficient to maximize CHEDA's efforts to grow the community. He specifically mentioned the need to grow jobs. "I think we should be putting at least $100,000 into job creation," he said.   

    City Administrator Shannon Stassen said meetings with department heads are currently underway in an effort to arrive at a 2015 budget. He said he anticipates "something being there" for potential, continued investment in CHEDA, but it's too early to identify a specific number.   

    "Well, if we have to, in the budget process, make cuts in other areas to expand our investment side, I don’t think that doesn't take a lot of study," Jorgens said.   

    Mayor Dave Genereux said it's pretty clear to everyone that the city and CHEDA are good partners who share in each other's successes. "There are things that need to get done, and we'll work together to get them done," he said.