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2018 police budget blown by $200,000

Councilor questions overages after audit results released


August 9, 2019

Results of the recently completed 2018 city audit raised the alarm for at least one Cloquet city councilor last month, when city finance director Nancy Klassen stated that the police department came in $211,000 over its approved $2.79 million budget last year.

Ward 4 councilor Kerry Kolodge compared the budget to actual spending for 2018, pointing out that general government spending was below budget by $115,000, while streets and highways were below by $70,000. Then he cited the $211,000 police overage.

“It’s way too high,” Kolodge said. “I believe the discretionary spending that went on in 2018 should have been reined in. I haven’t seen an overage that big as long as I’ve been on the council.”

According to city records, here’s how the police budget came in the five years prior to 2018:

• $50,986 over budget in 2013

• $90,382 below budget in 2014

• $5,754 over budget in 2015

• $92,077 below budget in 2016

• $23,305 over budget in 2017

• $211,000 over budget in 2018

City administrator Aaron Reeves said at the July 16 council meeting that $117,000 of the overage came from salaries. “Other things included community events, plus travel and conference costs, but these last two received additional funding. So while expenditures were up, intergovernmental revenues were up $47,000.”

Personnel costs

Personnel costs were the biggest spend and that’s nothing new. Personnel costs make up the bulk of the budget, and overtime has been an issue for many years and was highlighted as part of a 2014 study of the department.

Things have been even more challenging since the police union members took a vote of no confidence in then police chief Steve Stracek in 2017, and the city council appointed Sgt. Jeff Palmer as interim, then permanent, police chief.

The city paid Stracek six months salary to retire early and now Palmer has been on paid administrative leave since mid-April with patrol commander Carey Ferrell filling in as acting police chief in his absence.

In the past 10 months, two different officers — officer Scott Beckman in late 2018 and detective Scott Holman earlier this year — both lost their jobs as a result of past disciplinary issues. Although Holman was dismissed in June, the severance agreement with Beckman has kept him on the city payroll through next month, but not


Other police officers currently on leave but getting paid include Palmer and school resource officer Eric Blesener. Reeves confirmed to the Pine Knot News last week that Blesener was off the job but using accrued benefits.

“The personnel part, we all know the situation with officers in and out, and we’re dealing with that this year too,” Reeves said in explaining some of the salary costs.

Overtime costs in 2018 totaled $142,105 — $47,105 over budget.

Florida conference

Chief Palmer and Commander Carey Ferrell attended the International Association of Chiefs of Police Conference in October 2018. The trip initially appeared to cost the city $5,645 but — after Klassen questioned Palmer and Ferrell on expenses — ended up at a total cost of $5,032 after the two men repaid registration costs for both women, airfare for Palmer’s wife and some extra-large bills for meals and other things not covered under city policy.

Ferrell said the charges were a mistake and added that he and Palmer both knew and planned to pay back the registration costs for their wives. Ferrell said he wrote a check for his wife’s $150 fee in October; then wrote a check for $46 in November for food costs that Klassen questioned.

“There was some misunderstanding of what could be approved and what couldn’t,” he told the Pine Knot News. “It wasn’t really an issue. If we owe, we owe.”

When asked about a state auditor’s statement of position on credit card use and policies for public entities that cites a legal case establishing that “reimbursement of personal charges on city credit card does not negate false claim or theft by swindle charges,” Reeves said he didn’t think the charges were submitted with any kind of malicious intent and that he understood the two always intended to repay at least the charges on the police department’s credit card for their wives.

Reeves pointed to an extra $13,000 from the Minnesota POST (Peace Officer Standards and Training) Board for police officer training as something that offset the unbudgeted costs of the out-of-state trip.

Mary Bjornberg, who works in continuing education for the POST Board, said the funds came from an additional $6 million allocated by the state legislature to help cover additional mandated training (16 credit hours each) resulting from a new state statute. The statute required training in crisis intervention and mental illness crises, conflict management and mediation, and recognizing and valuing community diversity and cultural differences, to include implicit bias.

Ferrell said the conference was an educational and learning experience, and he attended numerous breakout sessions while he was there, including training on responding to volatile or dangerous situations, social media training, body cameras and response to tragic events like the recent shootings in Ohio and Texas.

“You don’t get a lot of that training in a small town,” he said. “It was worth it, but not something you would do every year.”

It’s more common for administrative staff at the police department to attend the Minnesota Chiefs of Police Conference, he said.

“But I got to listen to police from Boston, officers that were involved in a Colorado shooting,” he said. “We talked about how departments have responded to things like that, what works, what tactics to avoid.”

Prior city policy last amended in 2011 required that employees and elected officials traveling out of state for workshops, conferences, events and other assignments get council approval in advance of the travel. The policy outlines in detail what is an allowed expense and what is not.

Reeves said it is generally up to department heads to decide “who goes to things” and that was the case with the police trip.

Other costs

Klassen confirmed to the Pine Knot News that outside of salaries and overtime, the biggest items causing the budget overrun in 2018 were community events, a new K-9, uniforms, new cell phones and service, travel/conferences and computer equipment.

“These appear to be unbudgeted discretionary items,” Klassen explained.

According to the city’s budget versus actual expense report for 2018, other significant cost overruns broke down as follows:

• Police community events: budgeted $1,000/spent $14,467

• K-9 expenses: budgeted $1,000/spent $14,467 (new K-9 Vader purchase, supplies, training)

• Computer equipment: budgeted $3,500/spent $13,488

• Travel/school/conference: budgeted $25,000/spent $34,097

• Uniforms: budgeted $8,500/spent $16,803

• Vehicle maintenance: budgeted $18,000/spent $26,032

At 34 percent of the city’s total budget, public safety is the city’s largest expense by type — and doesn’t include the Cloquet Area Fire District, which is its own taxing and spending authority. The next two largest expenses after public safety are streets and highways at 28 percent and general government at 19 percent of the city’s total expenses.

A former police officer and administrator, councilor Kolodge promised he would be keeping a closer eye on the police spending in the future.

Editor's note: This story has been clarified to reflect Commander Ferrell's feedback regarding payment of registration costs.


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