Ann Lamppa takes her seat as Tower’s additional, temporary acting City-Clerk Treasurer

MONDAY, JULY 1, 2019 — Mayor Orlyn Kringstad opened the Monday, June 24 regular meeting of the city council by introducing Ann Lamppa, temporary acting City Clerk-Treasurer, before rearranging, and placing additional topics of business before the city council and asking it to approve his new agenda. Approval was immediate and unanimously forthcoming.

It is unusual for a city councilor to speak under public input, however, Alderman Mary Shedd, acknowledged she is still unfamiliar with city government protocol and addressed claims this reporter made in a recent issue of The Tower News. Reading from prepared remarks Shedd assured the public and fellow city councilors that she was not party to an open meeting violation as I have accused.

Shedd did confirm, however, that she did return to city hall, and spoke with other members of the city council about the earlier meeting, yet claimed she was innocent of open meeting violations. With Shedd returning there was clearly a sufficient number of members of the Tower City Council to constitute a quorum. The principal reason open meeting laws are in place is to prevent elected officials from actions conducted outside of a public forum. Shedd claimed that she did not violate the open meeting law, yet admitted she asked the other city councilors for their opinion on the city meeting.

Shedd did not address other open meeting violations she committed last week. There is ample and clear evidence, numerous witnesses, and photographs, that she also willfully participated in open meeting violations at city hall on more than one occasion last week.

Kringstad acknowledged that he was still unprepared and lacked a job description for a new city committee he proposes and anticipates will consider city budgeting and financial issues.

The Mayor moved to appoint himself, Dan Schultz, Dianne Meehan, City Councilor Rachel Beldo and Ann Lamppa to this new, yet un-boundaried committee. The mayor’s motion passed with unanimous approval of the city council. (Kringstad/Shedd, 6-0)

Once the committee was appointed Kringstad asked Schultz to outline activities he and Meehan have already undertook to investigate city books prior to the new committee being formed.

Schultz acknowledged that he and Meehan have met twice prior to their appointment and have begun to familiarize themselves with city accounting. They are still trying to understand the city’s accounting system, Schultz reported.

“The city has money. It’s just in different accounts. It wasn’t in the account it needed to be, Schultz said. We need to take a look at what money is coming in and what is going out,” Schultz added.

“There is a substantial balance difference between what it says is in the checking account and what the bank says. I don’t think there is really a discrepancy there. I think it’s the way general ledger entries have flowed,” Schultz said.

“Most of the money which the city gets has not come in yet, it comes in this time of year. There is certainly enough money for the city to pay its bills,” Schultz said.

“Things pretty much look like they should,” Schultz reported. “Things are looking okay, It’s not changing much,” Schultz concluded.

The city council received a letter from potential Tower Harbor Shores, LLC developer Jeremy Schoenfelder who wrote to request a further extension of interest only payments on a Tower Economic Development Authority (TEDA) loan he assumed from Orlyn and Marit Kringstad. The original loan went into default last year when Kringstad failed to make timely payments and failed to resume the full payments as scheduled last summer.

In an effort to clean up the mess the 2018 city council allowed Schoenfelder to assume the debt from the Kringstads. Now Schoenfelder seeks “an extension of the interest only period” through the end of this year.

Mayor Kringstad called Schoenfelder who lives and works in the American Southwest to confirm that his proposal had been approved by the Tower Economic Development Authority. It was, Schoenfelder told the mayor. Although no motion was made to extend the loan Kringstad called for a second to such a motion he said was already on the table. The city council was in lock-step unanimously approving the non-motion. It will be interesting to see how the new (temporary) City Clerk-Treasure records this motion in the official minutes of the city. ( — / Majerle, 6-0)

The Minnesota Department of Natural Resources (DNR) presented the city with an Amendment to Easement as was agreed upon in 1979 between the DNR and Wendell and Carol Schmid. TEDA is the current owner of the property and the easement was originally used as part of the Taconite Trail but that portion of trail was abandoned when Highway 135 was rerouted to its present location. Although the trail was already abandoned in reality, the easement remained in place and was hindering development plans at the harbor. The city council was unanimous in its approval of the DNR amendment. (Majerle / Beldo, 6-0)

Broadband internet was once again a subject the city council found itself discussing. Richard Hanson has been meeting, along with other local government representatives, with the Blandin Foundation, (Grand Rapids, Minn.) and reported on plans to provide broadband services to the area. Along with Hoodoo Point Campground manager Randy Pratt, Hanson approached the city council to seek permission to have the City of Tower commit $3,000 to in-kind donations towards bringing broadband internet to Hoodoo Point Campground. Approval was given to have Hanson continue his efforts in this area. (Abrahamson / Beldo, 6-0)

The city council also learned that Pratt supported tabling rate changes and a new dock purchase for Hoodoo Point. Explaining to the city council—at a cost of $8,000 and dock rental at $1,000 seasonally, he reported that the revenues from new docks might be insufficient enough to justify offering new space to seasonal campers and asked the council to table any action on docks. The Mayor moved on with his agenda and the city took no action on either of the items Pratt asked the city to table.

Ambulance Fund

The council heard a clear explanation and demonstration how the auditors handle Tower Ambulance Service Fund financials, from Ambulance Director Steve Altenburg. Ambulance books are handled on a Modified Cash Basis a combination of the two major bookkeeping practices: Cash and Accrual accounting recording income and expenses for long-term assets on an accrual basis and short-term transactions on a cash basis.

The City of Tower has two primary revenue sources beyond taxes: the Tower Ambulance and HooDoo Point Campground, Altenburg explained, as he reminded the city council that most city financial problems originate with the Harbor Project and the TowerAirport, both which carry a lot of unfunded debt.

Greenwood Township has raised its concerns with the ambulance service. “Suddenly, (Greenwood) doesn’t trust Tower to put the ambulance money back” the Ambulance Director said explaining that the township wants to see hard figures—a plan from the city to eliminate debt currently floated by Tower which utilizes ambulance monies.

As has been explained before, the Tower Ambulance Fund is solvent to the point where other city funds temporarily utilize (‘borrow’) money to aid with the cash flow of unfunded city accounts—primarily the Harbor Project, $400,000 + and the Tower Airport, $110,000, according to the 2018 audit. The city council also learned that it takes up to a year to realize reimbursements from the FAA, which largely contributes to a deficit of airport funds.

John Burgess interjected that the airport contributes $30,000 to city coffers and suggested that the Ambulance Director tend to his own affairs rather than concerns about the city airport.

“It‘s almost a sin not to take the 90% FAA monies available” to the city airport, Councilor Sheldon Majerle said

In other action, the Tower City Council:

  • Approved a DNR Pass-Through Grant agreement Conflict of Interest disclosure (Abrahamson / Beldo, 5-0)
  • Approved asking the State of Minnesota to participate by contributing five percent ($4,683.50) of aTowerAirport snow-removal equipment building and a crack sealing project. It is expected that the total project will cost $93,670 with 90 percent of funding provided by the Federal Aviation Administration (Beldo / Majerle, 5-0)
  • Approved a final payment of $400 to close out the books on a previous (un-clarified) project at the airport (Abrahamson / Beldo, 6-0)
  • Approved the minutes of the May 28 Special City Council meeting (Abrahamson / Beldo, 6-0)