Monday, August 31, 2009

Gunflint Hills & Lions Club 3-Person Scramble Golf Tournament

Gunflint Hills Golf Course and the Lions Club are sponsoring a 3-Person Scramble on Sunday September 13. The Entry Fee is just $35.00 ($25.00 for Members) and includes 18 holes of golf, a hot dog lunch, prizes and a shot at the $10,000 Hole-In-One. Golfers must be entered by 5 PM on Friday September 11. Call the Gunflint Hills Golf Course at 218 387 9988 for more information about what promises to be a very fun event. For general information on the Golf Course go to GrandMaraisGolfCourse.com

Good luck to all Tournament Golfers!

Sunday, August 30, 2009

2010 City Budget, Temporary Bond Refinancing (EDA) and District Energy System Bonding Options

2010 City Budget Department Budget Meetings

Mayor Hakes, Councilors Kennedy and Sivertson, Mike Roth and Kim Dunsmoor met all of Friday morning on August 28 with City Department Heads to discuss 2010 Budget Requests.

  • Lenny Bloomquist presented the Buildings, Streets & Roads proposed budget. The need for capital planning to eventually replace the Street Sweeper and Mini Dump Truck was discussed.

  • Benny Silence presented the proposed budget for the Fire and Medical Services Departments. The need for capital planning to replace the Tanker was discussed.

  • Dave Tersteeg presented the proposed budget for the Rec Park including the Recreation General Fund, Swimming Pool and Boat Harbor. A second meeting with Tersteeg to discuss both Expenditures and Revenues will be scheduled. The increasing cost to operate the Swimming Pool continues to be of serious concern.

The Council will set the preliminary levy for the City on September 9.

City Council and County Board Meet with Ehlers & Associates

The City Council, County Board, City Staff, EDA Director Matt Geretschlaeger and EDA Board Chair Mike Litfin met the afternoon of August 28 to discuss refinancing what has come to be known as the EDA Bond and also discuss options for financing a Biomass Facility.

Refinancing General Obligation Temporary Improvement Bonds

Just about 3 years ago (January 2007) the City of Grand Marais issued $1,630,000 General Obligation (G.O.) Temporary Improvements Bonds to provide financing for the Sewer, Water & Street infrastructure improvements in the EDA Business Park. The plan at that time was for the EDA to sell lots in the Business Park and repay the City $60,000 for each lot sold until the debt was repaid. Lot sales have not occurred as planned and the EDA is unable to repay the City.

This 3-year G.O. Temporary Improvement Bond is now due in January 2010 and the City is responsible for this payment. Ehlers & Associates has provided the City with options for refinancing this Temporary Bond including a 2nd G.O. Temporary Improvement Bond or a 15 or 20-year G.O. Improvement Bond. Although further information needs to be gathered before any final decision is made, the City is leaning toward the 20-year G.O. Improvement Bond which means an average annual debt service cost to the City of $125,000.

The City has again requested that the EDA establish a comprehensive plan for the Business Park focusing on lots sales. They have also asked the EDA to explore other options to repay the debt. In the meantime, the City is on the hook for repayment.

District Energy System Bonding Options

The City also requested that Ehlers & Associates provide information on bonding authority for a District Energy System, aka Biomass Facility. (See Mayor Minutes July 8 entry for a brief history of this project. )

Ehlers & Associates first noted that State Law gives the City primary authority for a District Energy System, but that the County may also operate a District Energy system within the City. They also clarified that financing options for the Biomass Facility assumed that no 1% Local Options Sales Tax funding would be available for this project.

Bonding options for a Biomass Facility include, but are not limited to:

  1. Utility Revenue Bonds--Ehlers & Associates have not sold Utility Revenue Bonds for a Biomass Facility, nor are they aware of any that have been sold for this purpose. However, they believe that with a strong enough business plan it is possible. They also noted that a more favorable interest rate could be achieved by backing the bond with the local electric utility revenues. A $6,000,000 bond at 6% over 20 years would result in an annual principal and interest payment of ~$523,100.
  2. General Obligation Improvement Bond--Ehlers & Associates did not recommend this type of bond, but noted that it could be used in combination with other types of funding.

A brief discussion of the Biomass Facility project ensued. Mayor Hakes was clear that a detailed and credible Business Plan--including a financial & cash flow analysis, debt repayment, risk analysis and technical analysis--must be done before she will support the creation of this new utility for the City.

Wednesday, August 26, 2009

Budget Worksession, City Council Meeting & Special Assessment Public Hearing

It was a busy afternoon at City Hall with a Budget Worksession, City Council Meeting and Special Assessment Public Hearing. Present for these meetings were Mayor Sue Hakes, Councilors Kay Costello, Tim Kennedy and Jan Sivertson. Councilor Bill Lenz was absent. Also present were Mike Roth, Kim Dunsmoor. Attorney Brandon Fitzsimmons of Flaherty & Hood participated in both the City Council Meeting and Special Assessment Public Hearing.

Budget Worksession

Council met to continue its work on the 2010 Budget by reviewing the City Hall General Fund Expenditures, Cable TV Fund and the Debt Service Fund. City department heads continue to prepare their 2010 budget requests and will meet with the Council Friday August 28 at 9 AM. The Preliminary Levy for the City will be set on September 9.

City Council Meeting

Open Forum
Nobody from the public spoke at the Open Forum.

Payments Approved
Council reviewed the Grand Marais Fire Relief Association's Lump Sum Pension Plan Report for Year 2009. Relief Association investments have gone down approximately 20% requiring the City of Grand Marais to make a contribution of $8529 in 2010.

Redstone Construction Pay Estimate #6 and (2) Minor Extra Work Orders were approved by the Council for the 2008 City of Grand Marais Street and Utility Project.

The Safety Management Program contract with Minnesota Municipal Utilities Association and the annual payment terms of $12,400 were approved.

One-Percent Local Option Sales Tax
Council discussed the current status of the 1% Local Option Sales Tax. Jan Sivertson reported that she has assembled a preliminary team to begin the work of educating the public about the Sales Tax. The team will include an advocate of each of the (7) proposed projects: Danna MacKenzie, Buck Benson, Diane Booth, Mark Sandbo, D.C. Olsen, Linda Chappell. The voter referendum is scheduled for November 3, 2009.

Council & Staff Reports
Councilors Jan Sivertson and Tim Kennedy reported on the EDA regarding the Cedar Grove Business Park. Currently the EDA is struggling to determine asking prices for the individual lots, recognizing that lots are different sizes with different topography and visibility and should be priced accordingly. The pressure is on to sell lots to repay the $1.63M bond due in January 2010. The EDA and the City are meeting with their bond counsel Friday to discuss options.

Mike Roth gave an update on the Rec Park Master Plan. The graphic designer is incorporating the wetland delineation into the Park Map. The Master Plan recommended by the Park Board will be delivered to the City Council in September. Mike Roth also acknowledged the new city entrance signs provided by the Scenic Byways organization.

Special Assessment Public Hearing at 5:00 PM

The Council held a Public Hearing for the Special Assessments for the improvements done on 1st, 2nd, 3rd, and 6th Avenues, as well as 4th Avenue between the Gunflint Trail and 11th Street. Approximately (10) residents expressed concerns, asked clarifying questions and offered constructive or positive feedback. The assessments for the 1-2-3-6 Avenue projects were adjusted downward due the subtraction of the cost for sidewalks on 1st Avenue. City Staff will be available to answer specific questions about individual property owner payments and possible deferment options for those who qualify. Council voted 4-0 to pass a resolution to adopt the proposed/adjusted assessment.

Mark Your Calendars
Thur August 27 4:00 PM Joint City/County/School/Tribe Meeting At City Hall
Fri August 28 9:30 AM City Budget Worksession
Fri August 28 1:00 PM Ehlers Bond Counsel Meeting (EDA and City)
Wed September 9 3:30 PM Worksession--Preliminary Levy
Wed Septmeber 9 4:30 PM City Council Meeting
Wed September 30 4:30 PM City Council Meeting

Tuesday, August 25, 2009

1% Local Option Sales Tax Update

Just this morning, the County Board took the recommendation of the 1% Local Option Sales Tax Steering Committee to include (7) community projects in the proposed 1% Sales Tax:

  • Community Center Outdoor Recreation Area in Grand Marais
  • Community Center (with Aquatic Center) in Grand Marais
  • Birch Grove Recreation Complex
  • County-wide Broad Band
  • Public Library Addition
  • District Energy (Biomass) Facility in Grand Marais
  • Improvements to Superior National Golf Course

You've likely heard a lot about the 1% Local Option Sales Tax opportunity for Cook County. You may be unclear about what it is, what's actually being proposed in each of the (7) projects and how it will affect you. That's understandable, there is a massive amount of information to absorb and much of it is complex. But, it's important to understand this proposed tax in order to make an informed decision when you vote in the November 2009 Referendum.

Efforts are currently underway to further educate the public about the (7) projects, as well as the Sales Tax itself. Watch for information in the coming weeks. Take the necessary time to understand the benefits and the issues surrounding the proposed Sales Tax; it's important.

Good News for the Pool

Mayor Hakes, supported by Councilors Kennedy and Sivertson, Mike Roth, Kim Dunsmoor and Dave Tersteeg, came before the County Board this morning to ask the County Commissioners to re-affirm their March 2009 committment to partner with the City in financing the operation and maintenance of the Grand Marais Pool. (See Mayor Minutes March 4, 2009).

After a brief discussion, the County Board agreed to share 1/3 of the Pool's Operating Deficit for the Year 2009. They also agreed to share 1/3 of the Year 2010 Pool Operating Deficit up to $75,000. Both the City Council and the County Board recognize the Pool as an important community asset.

Wednesday, August 12, 2009

Budget Worksession and City Council Meeting

Mayor Hakes and City Councilors Tim Kennedy, Bill Lenz, and Jan Sivertson were in attendance at today's City Budget and City Council meetings. Councilor Kay Costello was absent. Also in attendance were Mike Roth and Kim Dunsmoor. Together they welcomed newly hired City Attorney Christopher Hood of Flaherty & Hood who participated in the regular City Council Meeting via telecommunication.

Budget Worksession

City Department heads are currently preparing their 2010 budget requests; departments supported by the General Levy will will appear before the Council to present their budgets at the end of August. The preliminary levy will be set in early September.

Significant considerations to the budget include wages, Local Government Aid cuts, the potential impact of State of Minnesota budget deficits (~$7 Billion), capital planning, and funding for the advancement of 2009/2010 priorities including a new maintenance facility, marina/safe harbor and Rec Park Master Planning.

Council also spent a significant time discussing the Pool finances; the Pool lost approximately $219,000 in 2008 with a similar loss anticipated annually. This loss is supported by the City with Rec Park profits and levy dollars. Last April, County Board representatives Bob Fenwick and Bruce Martinson expressed willingness to cost-share the Pool losses with the City and agreed to ask the County Board to increase their participation in the pool funding. The City has submitted a letter requesting additional funding as part of the County's 2010 budget process.

City Council Meeting

Open Forum
Nobody from the public opted to address the Council at today's meeting.

Planning Commission Report
The Cook County Tennis Association was granted a variance from the side yard setback to construct a wall for a tennis practice court near the existing tennis courts. The Planning Commission supported this request 4-0. The City Council approved this variance 4-0.

David Mills and Beth Ferry were granted a variance from the front yard setback to construct a deck and (3) dormers on their building in the R-1 district. The Planning Commission supported this request 4-0. The City Council approved this variance 4-0.

Tim Kennedy informed the Council that the Planning Commission will be reviewing Roof Signs and making a recommendation to the Council.

IRR Community Business Partnership Grant
Council voted to accept the Community Business Partnership grant from Iron Resources Board for $25,000. Combined with a $12,500 (2 for 1) match from the storefront loan program, there is a total of $37,500 to create a grant/loan program for business rehabilitation projects.

Lake Superior Coastal Program Grant for North House Folk School
Contracts and paperwork were received by the City for a previously awarded project from the MN DNR's Lake Superior Coastal Program. This $90K award will be used at North House Folk School to make improvements to the outdoor common space including planting trees & shrubs and replacing old asphalt with pervious surfaces. The work will also include relocation of parking, managing storm water runoff and improving the driveway entrance. The project is being matched with $151K of North House funds for a total of $241,300 to do this work.

Council & Staff Reports

Tim Kennedy updated the Council on several issues.

1% Sales Tax--The County Board has scheduled a Public Meeting on Monday August 24 at 7 PM to give the Public a very brief overview of the projects currently under consideration for funding through the 1% Sales Tax. The City Council unanimously supports the inclusion of a Community Center--including a swimming pool--on the referendum ballot. The Council would like to see the cost of the Community Center reduced to approximately $6M, assuming development of a sound business plan.

Biomass District Heating Project --The Biomass Project Working Group meets weekly and is making its way through the many issues surrounding this project.

A long-term affordable and reliable supply of biomass is critical to success. Patty Johnson is scheduling a meeting with potential suppliers of biomass to begin addressing this need. Seeking a commitment from the Superior National Forest (USDA), Fish and Wildlife (USDI), and the MN DNR that biomass will be available for life of the facility was also discussed. The Forest Service is also conducting a technical review of the technical aspects of the proposed project. Buck Benson is working to identify major commercial end users for the heat produced from the project; Mike Roth will talk with SMMPA. Ehlers & Associates--the City's Bond Counsel--is scheduled to meet with the City Council on August 28 at 1:00 PM to discuss the feasibility of selling bonds to support the proposed biomass facility. Ways to raise public awareness and understanding about the project were also discussed.

County-wide Broad Band Service--The County is pursuing federal stimulus funds, as well as 1% funding for County-wide broad band services. The total project cost is estimated to be $51M with $32M funded through a federal grant, $9M requested to be funded with 1% sales tax monies, and $10M funded through bonding.

Sue Hakes reported that she followed up with DNR personnel (Stan Linnell, Les Ollila, Larry Killien, Cheryl Erickson) by thanking them for their participation in the July Meeting in Grand Marais. Killien updated Hakes on the progress being made on the Joint Powers Agreement to be drafted by the DNR; other priorities have taken precedence, but the draft document is anticipated to be completed soon. Hakes will also explore the status of the Water Resources Development Act as a possible funding source with Jackie Morris of Congressman Oberstar's office.

Mark Your Calendars
Mon Aug 24 7:00 PM 1% Sales Tax Public Meeting at Courthouse
Wed Aug 26 4:30 PM City Council Meeting
Fri Aug 28 Morning Time TBD Budget Meetings w/Department Heads
Fri August 28 1:00 PM Ehlers & Associates Bond Counsel Meeting
Wed Sept 9 3:30 PM Worksession Topic TBD
Wed Sept 9 4:30 PM City Council Meeting
Wed Sept 30 4:40 PM City Council Meeting