BEMIDJI – Items discussed at Monday’s Bemidji City Council work session included rising health insurance premiums for city workers, possible changes to how city liquor stores handle credit card fees and appropriations for the 2025 budget.

City Manager Richard Spiczka opened the meeting with a topic about the 26.5% increase in health insurance premiums, a significant issue affecting all city employees. He asked the council for input on whether the city should cover the entire cost or whether employees should bear some of the burden.

“I would really like to know from the council whether they expect the city to cover the entire 26.5 percent, or whether the council expects the amount to be split between the city and the employees,” Spiczka said.

Fifth District Councilwoman Lynn Eaton said the city would cover the cost increase, and other council members echoed that sentiment.

“For consensus reasons, I am in favor of raising that increase to, say, 27% if the rates change,” noted Fourth District Councilwoman Emelie Rivera.

Spiczka said the city is looking for better options, but emphasized the challenges of the current insurance plan with limited coverage.

“So now we have to catch up because we are in the third year of the same group and with the same insurance offering,” he added.

The council largely agreed to continue the discussion. Several members supported the city taking on the increase, but noted that it would likely be a negotiating topic with unions in the future. No formal decision was made during the meeting, leaving the issue open for further discussion.

Another major topic was a proposed change to how credit card fees are handled at Bemidji’s municipal liquor stores. Currently, the city covers these fees, which cost over $200,000 annually. Spiczka proposed passing these fees on to customers, which could save the city around $200,000.

First District Councilwoman Gwenia Fiskevold Gould supported the idea.

“I think it’s great,” she said. “You have to be able to pass on this award, especially since from what I’ve seen, this seems to be a common practice in other industries as well.”

City Councilwoman Audrey Thayer suggested giving customers the option to pay cash and receive a discount, a common practice in many local stores.

“I agree that we should pass it on to the customer and give them the option,” she added. “If they want to pay cash, there should be a percentage discount.”

Third District City Councilman Ron Johnson expressed support for the fee pass-through.

“You see this more and more in restaurants where there is a cash price and a credit card price. … (That) is a big chunk of money that we could use for something else,” he added.

Mayor Jorge Prince supported the proposal but suggested examining whether a 3% or 4% fee would be more appropriate, citing the different costs of different credit cards.

“I paid a lot more with 4% than with 3% and I suspect that’s because some cards, like American Express, have higher fees,” he explained.

Donna Coe, Bemidji’s finance director, explained that each card has its own fee structure, with American Express typically being the most expensive at 4.25%. She reiterated that while the fee is passed on to customers, the price of the item remains the same.

“The way I look at it is that the $18 bottle of wine I buy is still $18 in cash. If I use my credit card, it might be $19.35… but that’s on my bill. It’s still an $18 bottle of wine,” Coe explained.

Spiczka acknowledged that further research is needed to determine the best course of action, including the appropriate fee rate.

“We set a flat fee, and instead of being at the lower end of the range, we’re more in the middle … the law says we can’t charge more than 5%,” he said.

The council agreed to investigate the matter further. Prince stressed: “The bottom line is: whatever you decide, I support it.”

Johnson also raised the possibility of limiting the credit cards the city accepts, as some stores do not accept American Express due to the higher fees. Spiczka clarified that such a limitation could be systemic, but the current system should allow for the acceptance of all major credit cards.

At the end of the discussion, the Council signalled broad support for fee passing on, but said further research would be carried out to refine the details before implementation.

Spiczka provided an update on the city’s budget and the allocation of American Rescue Plan Act funds. He also stressed the importance of keeping ARPA funds available for important projects that may arise as part of ongoing budget discussions.

“I’ve really slowed down the disbursement of ARPA funds because if they’re going to help us with something that might come up in the tax debate, I’d rather have them for our own use than to use them somewhere else,” he said.

Council members raised several questions about the need to use these funds to address important city priorities.

“We haven’t replaced any light poles here, but I think at least some of these funds should be used for that if possible,” Rivera said. “I just think we could do something for public safety with these funds.”

In addition, a broader discussion arose about the city’s fee structure, with Rivera expressing the need for a reevaluation.

“When you talked about what other cities are doing and how we compare, how do we want to adjust or review the fee structure?” she asked, before suggesting a more thorough review. “Maybe there are options that are worthwhile, or at least a plan in place in case it’s time to reevaluate.”

Spiczka explained that the city is keeping this in mind, but that a comprehensive review of the fee structure has not yet been conducted, but that it could be considered based on information provided by the city council and other inquiries.

Thayer supported the call for an update to the fee schedule.

“That’s why I’m glad Rivera brought up the fees because I brought this up last year … some of the fees aren’t even relevant today and are on the books,” she added.

With the budget process ongoing, Council agrees that re-evaluating fees and carefully allocating available funds are critical to meeting the City’s financial needs.

City Clerk Michelle Miller informed the council that another Board of Elections meeting would be needed to determine the results of the Precinct 5 recount, scheduled for Wednesday, August 28, at 12:30 p.m. in the Beltrami County Board of Elections Chamber.

“We have to hold another board of elections meeting to give you the results … it is a summary statement of results that will be given to you as we give you in every other election,” Miller said.

She noted that while the general procedures are known, specific details regarding the recount and any potential challenges will only become clear as the process progresses.

The meeting is necessary to meet general election deadlines, meaning the county auditor must receive the information by Tuesday, September 3. This timeline ensures the auditor can move forward with preparing ballots for the upcoming general election.

A campaign meeting is tentatively scheduled for Friday. Further details will be announced later this week.

The entire meeting can also be viewed on the Council’s website at ci.bemidji.mn.us.