International Falls council declines $1 million Cary Park design grant, cites budget and water-treatment priority

The International Falls City Council voted 5-0 on March 17 to decline a $1 million state design grant earmarked for a proposed Health and Wellness Center at Cary Park and to prioritize the water treatment plant rehabilitation and other fiscally urgent needs.

Councilor Wagner moved to not proceed with the Cary Park design grant; the motion was seconded and passed unanimously.

Council members said the water treatment plant rehabilitation — estimated in discussion at roughly $12 million for full rehabilitation, with a current state bonding request of $4.8 million under consideration — is the city's highest infrastructure priority. Councilors and staff described long-term affordability concerns if the city pursues multiple large capital projects at once.

Why it matters: the design grant would have paid for engineering and schematic design work for a new wellness center. City staff said the $1 million would cover the center's design but not other site elements such as playground or spray-park replacement; if the city declines the grant, the funds would remain available in the state process for other requests. Councilors repeatedly framed the decision as balancing needs and long-term fiscal capacity.

Discussion and context: during a broad conversation about capital priorities, staff reported that the design money would be limited to the wellness-center design. Several councilors said they were concerned about taking on additional debt or unfunded long-term maintenance obligations while the city is planning or pursuing other projects: the water-treatment plant rehabilitation, a proposed police facility, and public-works garage work. One councilor characterized the Cary Park grant as a potential bargaining chip to leverage additional assistance for the water project.

City staff and the auditor: city staff and the auditor warned the council to watch the city's general-fund reserve ratio. Emma (finance staff) said the 12/31/2023 calculation under the fund-balance policy showed the general fund had "slipped just slightly below" the 50% target, to about 48%–49%; staff noted that the formal calculation is made during the annual audit and that month-to-month computations are not straightforward because of accounting items such as fixed assets and timing of revenues.

Next steps: By declining to proceed, staff said the city would redirect lobbying and requests toward funding the water-treatment project. The council did not adopt a new capital plan at the meeting but voted to return the Cary Park design grant to the state process and to continue pursuing state bonding for the water-treatment plant.

Ending: Councilors said they would continue the discussion as bonding decisions and audits become available; the city scheduled follow-up budget and capital items for future meetings.