The Rugby Job Development Authority Board heard good news on the local business front at its regular meeting, held on April 19 in the JDA office.
Board members reviewed budget and financial information, which included an analysis of sales tax receipts from Rugby businesses in the first quarter of 2022.
“Our original budget was in the negative,” said Rugby Mayor Sue Steinke, “but because of the increase in sales and the reduction of expenses, we’ve come into the positives.”
Steinke and Board President Blair Brattvett conducted the meeting in place of JDA Executive Director Karl Frigaard, who was absent due to illness.
“At the end of the day, Dec. 31 of ’21, we actually were $25,000 to the good,” Steinke said of the budget’s ending balance.
“Also, we reduced some expenses. We only did half of the hospital recruitment,” she added.
“Marketing and advertising, we cut by more than half,” she said, listing cuts in expenses. “Telecommunications was down a little bit, Flex-Pace loans were down a little bit. It was just a combination of reducing expenses and increasing sales tax revenues gave us the positive balance at the end.”
The JDA receives 35% of the 2% allocated from sales tax to the city. The City of Rugby receives the other 65% of the tax amount. Sales tax receipts totaled $210,041.36 for the first quarter of 2022. The first quarter of 2021 saw $142,332.58 in sales taxes received.
The board reviewed financial statements matching actual expenses and revenues to the JDA’s 2021 budget prepared by Liz Heisey, a former JDA executive director, who provides assistance with the statements on a contract basis.
Before the budget review, JDA board members met with Heart of America Medical Center CEO Erik Christenson, along with Tanner Johnson and Wayne Trottier, who sit on the Good Samaritan Hospital Association Board of Directors.
Christenson told the JDA board members the hospital’s board had concerns about repairs needed for its Heart of America Clinic in Dunseith.
“We see anywhere from 1,800-2,000 patients there,” Christenson said. “It’s a satellite clinic that’s quite a bit busier than (the HAMC clinic in) Maddock. We see quite a few surgery and physical therapy referrals from Dunseith.
“However, the building up there is not our building,” he noted, adding due to the hospital’s triple-net lease agreement with the JDA, who owns the building, HAMC was responsible for its maintenance and repairs.
Christenson listed repairs needed for the building, which included shingle replacement and other work on the building’s roof, new siding and trim, and roof fascia totaling $63,250.
He said the needed repairs were not eligible to be covered by federal funds for COVID relief.
Christenson added the hospital board required him to seek approval for expenditures over $25,000 for out-of-the-ordinary needs.
“The board is of the understanding we don’t own that property and they’re questioning putting $63,000 of company equity into a property we don’t own,” Christenson said.
“I don’t know the legality of this, if there has to be a purchase or a quitclaim deed that would allow us to take over that part of the property in Dunseith, but the board asked me to come and ask if there could be a transfer of this asset,” he added.
“They’re fully aware of the triple-net lease and how that works,” Johnson told the board.
“When the JDA took on the clinic properties, they never did mortgage the Dunseith property,” Johnson added. “They mortgaged just the Rugby and Towner properties, and we don’t have the clinic in Towner anymore, so someone asked, if we’re going to be sticking this much money into it, is there some way, somehow, we could ask the JDA if we could have the JDA deed the property over to us to make those improvements and we could have the property.
“In no way would we discontinue the lease,” he added, referring to the hospital’s Johnson Clinic and its agreement to lease clinic property from the JDA. “We’ll continue the lease payments because we occupy the property in Rugby.”
Christenson said the transfer “doesn’t change any revenue to the JDA. “We’re still on schedule to complete this loan in two and a half years. The property would be paid in full. The JDA would have the property.”
The hospital would not be interested in owning the Johnson Clinic building in the future, Christenson indicated. However, he said he was impressed with the quality of the Heart of America Medical Center wing built in 1972.
Both JDA and hospital board members at the meeting agreed both entities’ non-profit status might influence any possible property transfer.
The JDA board voted unanimously to seek legal advice on a way to transfer the property to the hospital.
Trottier noted the Dunseith Clinic “is a very viable operation for Heart of America (Medical Center) and to Rugby because of the number of patients and referrals that are made from there.
“We have to look at (the clinic’s) long-term value of the Heart of America Medical Association, because there are other sizeable entities that are looking at establishing and building a very big clinic in that Dunseith area and we have to remain competitive any way we can,” Trottier noted. “And that means $63,000 now, but down the road, we might have to look at putting even more money into that facility to remain competitive.”
The board reviewed bids for mowing the Chalmers Addition subdivision and approved one submitted by Harold Volk, Rugby, for mowing and trimming.
The board also voted to contact the same provider of weed spraying services for the subdivision used in 2021.
Board Chair Blair Brattvett presented a bill for $5,000 to pay for annual dues from the North Dakota Small Business Development Center. The board approved the payment.
Steinke told the board she had been contacted by Patti Armstrong of “Ladies With Another View,” a talk show on the BEK television network. The board discussed filming a promotional video with the show’s production crew for the JDA’s use.
The JDA board set May 17 as the tentative date for their next meeting. Regular meetings take place at noon in the Rugby JDA office.