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!

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.

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