It’s time for Tower to take inventory; the correct path will become clear

DECEMBER 7, 2016—Tower’s city council is working hard on setting its 2017 budget. Past city leadership has left the city with a portfolio of assets from which we benefit today and can continue to benefit from well into the future. Many positive developments for the city are on the horizon. A successful new town house project on Tower’s harbor is anticipated. People have organized to establish a development corporation to incubate future projects and are now seeking public city money to finance an executive director to bring forward additional private development opportunities.

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The Tower City Council is determined to set a zero-levy-increase as its 2017 budget goal and City Clerk-Treasurer Linda Keith has delivered the council a proposed budget which does just that. This proposed budget took a sharp pencil and a close eye on every detail to accomplish the council’s stated objective and Keith is to be applauded for her efforts.

Admittedly the proposed numbers are close. With rising insurance and other costs it is not always possible to hold the line on spending in many areas. The price of everything just seems to go up. The entire budget process is a careful balancing act. To accomplish the zero-levy-increase budget some funds assuredly will need more money and the only place it can be found is by reducing other funds. The city needs to make sure that it does not set itself up for future problems by unrealistically reducing some accounts in favor of additional spending in others.

Even though she worked hard on producing a budget with a zero-levy-increase, Keith said that she would also be receptive to a one-percent levy increase.  The city can then be assured that adequate funds are allocated where they are needed.

When the city council meets on Monday it will, without a doubt, further adjust the proposed numbers as it finalizes its 2017 budget numbers. The idea of a zero-levy-increase is a worthy goal but may be a little bit unrealistic. The council may want to consider the slightest possible increase to the levy to make sure the numbers are pragmatic. This is where the city council will need to make the difficult choices.

We appreciate the council’s efforts and respect the efforts it is undertaking looking out for best interests of Tower and the common good. We support the council on whichever direction it chooses to take as it strives to find a reasonable solution to the difficult problem of holding property taxes in check.

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Tower is well situated to prosper in the future. It has a lot of assets and can easily utilize those assets as it transitions from the sleepy community we all know. Tower developed and thrived on the commerce and traffic based upon the mining and logging era. In a big way it still benefits from the vision of the early pioneers of industry.

Tower still owns hundreds of beautiful acres of northwoods throughout the region, because of the foresight of Mayor Martin Gundersen. He was a timberman who made his money from logging and then donated much of his land holdings to the city. The Gundersen Forest, the location of the Howard Wagoner Ski Trails on Tower’s southern edge, remains a recreational treasure today.

In the late 1980s and early 1990s Mayor Gary Burgess consolidated much of Gundersen’s lands to the area around Tower. He oversaw the purchase of the north hill overlooking Lake Vermilion by utilizing money from the sale of lands located many, many miles away from the city. Showing great leadership Mayor Burgess also used the balance of the proceeds from those profitable sales to create and fund the Gundersen Trust.

The last fifteen years has seen the Tower City Council spend a great deal of its time, effort and resources on preparing the Tower Harbor for a development project. It has spent its own money, received Minnesota Department of Transportation and Department of Natural Resources assistance, as well as state, county, federal and Iron Range Resources and Rehabilitation Board money on the harbor project. It has been reported that the total investment is near eight million dollars!

The city has now formally entered into an agreement with Orlyn Kringstead and his Tower Vision 2025 plan to build a 20-unit condominium project on the harbor. This project is one we all look forward to see materialize in the next couple of years.

All this, and we have yet to mention two significant and very important assets which offer many positives, and assuredly challenges, for the city in the very near future. These are, of course, Lake Vermilion and the new Lake Vermilion State Park. The lake will continue to be a growing economic influence on the city. We can only imagine the impact the state park will have on Tower as thousands of vacationers begin to visit next spring.

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As the city council turned its attention to the 2017 budget at its November meeting it received a request to fund a new development corporation. Timberjay publisher Marshall Helmberger asked the council to provide 10,000 dollars as start up funds for the Tower-Soudan Community Development Corporation which was formed by himself and Troy Swanson as agents. Helmberger maintains that there are seven people on the board of directors of the new corporation, but he did not identify any of them at the city meeting, or a largely unnoticed Tower Vision public meeting held days later. He did, however, explain that it was his intention to use the city’s ten grand to pay for a part-time executive director, claiming that this was needed to encourage future development.

He also said publicly that the new corporation has already identified the executive director it hopes to hire and that the corporation has received emails from people who are anxious to bring new business to Tower’s Main Street. Again details on these matters remain elusive.

Tower, however, being the small town that it is, harbors very few secrets. Word on the street is that the new development corporation intends to use Tower’s money to pay Orlyn Kringstead to do this work for the corporation.

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Our concerns:

It is reasonable to utilize Tower’s assets to vitalize the city, and it just might be reasonable to give the harbor developer the small parcel of land on the West Two River to kindle development in the city. It is not acceptable, however, to have the Tower taxpayers fund a salary for the developer to take our free lands and build his business in the hopes he can personally profit by utilizing the entire city’s assets.

Tower property taxpayers already pay considerably more than taxpayers in Breitung Township. Tax forfeit property now lines the Main Street—a situation which was unimaginable 20 years ago.

Tower already has its own Tower Economic Development Authority (TEDA). The city has transferred much of its land assets to the authority. People are questioning the need to finance a private corporation to generate development when TEDA is already in place. There is no evidence that Tower would benefit from utilizing a private development corporation rather than vitalizing the public authority.

Most egregiously, Helmberger has suggested that one of the benefits of his new corporation would be that it “could keep confidentiality” when negotiating with potential developers. Confidentiality is all and well and good and sometimes might be necessary in the private sector, but when it comes to spending public money those funds need to be managed in the clear light of day.

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Our Recommendations:

Considering all this history and all the hard efforts by many individuals over generations, including the current generation, it is our recommendation that we pause and consider what is ahead for our small city.

The city council needs to concern itself with the best interests and common good of the Tower community. It should seek to further engage the people who live in Tower and the Main Street business community to assure that it gives voice to these stakeholders.

Focus on the needs of the people who live in Tower and the existing business people who have staked their investment in Tower.

Revitalize the Tower Economic Development Authority by recruiting city stakeholders to serve on this important board. Over the past several years the city has borrowed money from the Gundersen Trust. It is time to make sure that these funds are being amortized on the fastest possible schedule and to assure that the trust continues to be a solid asset of the city.

The city has entered into an agreement with Tower 2025 to develop a town home development on the harbor. Tower has provided the land, the developer needs to focus his attention on making this project come to successful completion. The city now needs to move on and minimize any future investment from taxpayer money.

Wish the developer and the development corporation the most success possible, but deny the request to fund the Tower-Soudan Community Development Corporation with public money. Let the private development corporation fund itself with private capital.

Before the City of Tower can successfully look forward it needs to take a good look at where it has been. It needs to take a good look at what it has. It also needs to take a good hard look at its liabilities. When the city determines its strengths and weaknesses and hears the concerns of the people invested in the city the correct path will become clear.

With a new city council about to take seat in a few weeks, now is the perfect time to start to take that inventory.

 

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