Todd County delays decision on interim financing as state holds transfer-station grant funds

TODD COUNTY, Minn. — Todd County commissioners on May 20 discussed whether the county should provide short-term “gap” financing for the new solid-waste transfer station after state reimbursements and one remaining grant agreement did not arrive as expected.

The county’s solid-waste project manager told the Board of Commissioners that the state has been about 120 days late on reimbursement requests for roughly $6.6 million and that a further $2,795,000 of state dollars that local officials expect has no signed grant agreement yet. Construction of the transfer station is nearing completion, with buildings and interior concrete reported as substantially finished.

The issue matters because the county must pay local contractors and suppliers as work completes. If the state’s promised funds do not arrive on schedule, staff said the county could either provide interim (gap) financing — temporarily using county cash to pay bills until the state reimburses — or do nothing and risk late vendor payments.

“We’ve been talking with the committee, you know, with Commissioner Denny and Commissioner Newman…they’re saying they’re gonna get us that money, but at some point you have to cash flow the project,” the county’s project representative said. He told the board the state had verbally indicated progress but had not issued the remaining contract or disbursement schedule.

Commissioners expressed unease about committing county reserves without firm, written guarantees from the state. One commissioner asked who is pressing state officials and described being contacted by a state representative to check on progress. Another said the county should not give away interest earned on reserve funds by loaning them out interest-free and asked whether county legal counsel had reviewed the financing option.

County Auditor-Treasurer Denise (surname not stated) said the project’s cash position looked sufficient through May and into most of June, and that the county could likely wait that long. But she and staff warned that if reimbursements had not arrived by July the county could face a cash crunch.

Officials said they had been in frequent contact with state staff at the Minnesota Pollution Control Agency (MPCA) and other partners; MPCA staff were reported to have indicated they expected to finalize paperwork by the end of the state fiscal year. Commissioners and staff also reported outreach from state legislators on the county’s behalf.

After extended discussion about legal and fiscal risks, staff requested direction. A motion to table the proposed resolution authorizing interim financing carried. The board asked staff to: (1) consult with the county attorney on the legal terms and protections that would attach to any county loan or interim advance; (2) get a contractor schedule and a detailed projected spend-out so the auditor can identify the timing of any shortfall; and (3) continue pressing the state and county legislators for written commitments. Commissioners also asked to receive regular updates — at least at every board meeting and more frequently by committee as needed — until the state disbursement is resolved.

Commissioners said they preferred solving the issue by getting the state paperwork finalized and avoiding use of the county general fund if possible. The board took no formal financing action and tabled the matter for follow-up.

Notes: The county’s project presentation to the board listed $6.6 million in reimbursement requests about 120 days late and an additional $2,795,000 of still-unexecuted state funding. County staff said the transfer-station main building and administrative building are substantially complete and that exterior work such as curb and gutter is next.

What’s next: Staff will request a contractor spend-out schedule, ask the county attorney for recommended protections if interim financing is required, and continue outreach to state agencies and legislators. The board requested at least biweekly updates while the situation remains unresolved.