End is near for Lighthouse Point saga
By: LaReesa Sandretsky, Lake County News Chronicle
“I just have an item that I’ve been waiting seven years to tell you about,” Two Harbors City Attorney Steve Overom said at Monday’s City Council meeting.
After more than 10 years of legal wrangling, the City’s saga with Sam Cave is almost over. According to Overom, Lake County Judge Mike Cuzzo has ordered Cave to sign over a large chunk of his land to the city. The land, located near the Two Harbors Lighthouse and known as Lighthouse Point, has been a point of contention between the City and Cave Associates, Cave’s real estate company, for more than a decade. Cave was ordered to sign the deeds over to the city within seven days of the decision. Since he hasn’t, Cuzzo will now sign the land over to the City.
“Thank goodness it’s finally over,” Councilor Roger Simonson said.
Audit results are in
Matt Mayer, an accountant from Kern DeWenter Viere, appeared in front of the council to give the City the results of its 2012 audit.
“Clean opinions all around. It’s a good start,” Mayer told the council, indicating they had kept the books accurately. Then, he ran through some of the numbers.
He said that in the general fund, the city was $9,000 over budget. While he stressed it wasn’t a big concern, the general fund expenditures have slightly exceeded revenues for the past four years, and that adds up. In 2008, the City had six months of cash in reserves; in 2012, it was down to four months.
He went on to say that everyday spending on operations had been reduced this year, and that the spending trend seems to be slowing.
“You kept a pretty good lid on spending,” Mayer said.
Mayer gave the sewer, water and electric funds clean bills of health. The gas fund, he said, was doing okay but its current level of revenue versus spending would not be sustainable.
The liquor and golf course funds didn’t have such good prognoses. While sales for the municipal liquor store were up, gross profit was down, a trend that Mayer traced to the golf course.
“The golf fund is still having some challenges,” Mayer said.
Dollars from the liquor fund are used to offset the golf course’s losses—a total of $750,000 in the last five years.
“Right now, to get (the golf course) out of the hole, it would be about $880,000,” Mayer said.
Despite the bad news about the golf course, which the city has known about for years, Mayor Randy Bolen was pleased with the results of the audit.
“I felt that the city is in a good fiscal house. The city has been doing very well,” Bolen said.
Proposed utilities ordinance ruffles feathers
On the table for the City of Two Harbors is a new ordinance that would transfer the responsibility of unpaid utilities in rental properties from tenants to landlords. On Monday, the council heard the first reading of the ordinance.
Currently, if utilities are unpaid in a rental property, the tenant is responsible for the bills and the only way the City can recoup the money is if it sues a tenant in small claims court. Under the proposed ordinance, the utility bills would be attached to the property rather than the tenant, making landowners responsible for the bills. The City touts the ordinance as a money-saving measure, giving them a better chance of receiving payment for all of the utilities it provides.
More than 10 landlords showed up at City Hall on Monday, all opposing the ordinance. Many said they feel the city is “passing the buck” and making landlords absorb the City’s liability in providing utilities, in addition to the liability they already have for rent and possible damages to the property. Doug Brenner, who owns rental properties in Two Harbors, said that he empathizes with the City in its quest to save money, but landlords are in the same boat.
“We all face the same...financial problems. We can understand your plight, but we also have the same plight,” Brenner said.
Other landowners said that they would likely start including utilities in the total rental price, leading to an increase in overall rental prices.
“It’s just going to reduce the affordability stock in Two Harbors,” said Ruth Rabold, another owner of rental properties in town.
Overom explained that this type of ordinance is becoming more common. It’s been effective in Hermantown for decades and will likely be instituted in Duluth in the near future.
After hearing the comments of those present, Simonson made a motion to move forward with the ordinance by giving it a first reading. After the first reading, the utilities committee will evaluate the ordinance again, as will the council, making any necessary changes before a second reading. Simonson estimated that a second reading will take place within 30 days. After a third reading, the council can vote on the ordinance.
Bolen asked for an amendment giving the ordinance a grace period. He said he wanted to wait until Duluth enacted the ordinance and observe its effect for a year before moving forward. Simonson rejected the amendment.
The first reading passed, with Councilor Jerry Norberg and Bolen voting no. Thanks to an amendment by Councilor Robin Glaser, landlords will be notified by mail before the second reading of the ordinance.
“The city council knew it was a big step...and wanted the opportunity to hear from property owners,” Overom said.
Skunk Creek watershed restoration in the works
Dan Schutte and Jennifer Thiemann from the Lake County Soil and Water Conservation District joined forces with Tom Esterberg of the Minnesota Pollution Control Agency to give the council an update on the Lake Superior South Watershed, within which Two Harbors lies.
The MPCA began monitoring the health of the watershed 2011. The data collection is ongoing, and by the fall, according to Esterberg, the MPCA will begin drafting a restoration plan to bring bodies of water within the watershed up to the MPCA standards.
Schutte told the council that Skunk Creek, which flows through Two Harbors and into Burlington Bay, is a high priority for the MPCA. He said turbidity, cloudy water caused largely by erosion, has been a problem. In addition, the water has tested positive for E. coli. The MPCA will continue gathering data to try to define what is causing the E. coli contamination, which will help inform the restoration plan. A public comment period will be held in the fall, as well.
Bolen made a motion to require the City to test the water on its own, a proactive move that may help define the source of the contamination before the MPCA can.
“I feel it’s essentially necessary that the City of Two Harbors takes this action,” Bolen said. The motion carried.
FBO project delayed
Councilor Seth MacDonald moved to rebid the fixed base-operation project, to which the City had committed at the council’s previous meeting. This move puts the nearly $1 million project on hold indefinitely.
An FBO would provide fuel, hangar rental space and aircraft maintenance to customers of the Richard B. Helgeson Airport in Two Harbors.
The project was already projected to cost the city $20,000 more than it expected. Then, last week, the Minnesota Department of Transportation withdrew a $417,000 grant, putting the FBO far out of reach of the city.
“The dollars have come back at a point where I’m personally uncomfortable,” MacDonald said, adding that he had spoken to Casey Komarek, current airport manager, and Dick Helgeson, former airport manager, and they agreed.
Request for $12,000 for trail rejected
An additional charge for the planned trail connecting the paved path in front of Super One and ShopKo to 11th Avenue in Two Harbors was brought up for vote at the meeting.
In April, the cost was estimated at $540,000—about $100,000 more than the City had projected. Though most of the project is covered by grants, the city is responsible for any costs above $444,000.The trail is just a few blocks long, but carries such a hefty price tag because it crosses a section of CN Railroad.
The trail design team requested $12,000 two weeks ago for a license from CN Railroad to cross a storm sewer. This week, $1,000 more was added to properly insure the city.
With little discussion, the council rejected the request for more money by a 4-3 vote.
MacDonald and Councilors Cathy Erickson and Robin Glaser voted yes, while Bolen, Simonson, Councilor George Scheidt and Norberg voted no