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Preston City Council Report: Sauer fills council vacancy

Fri, Oct 10th, 2003
Posted in Features

Dr. Sauer was appointed to the Preston City Council

The Preston City Council met in the basement of the F & M Community Bank Monday night to accommodate the great number of citizens that were expected to attend.

The council faced a busy agenda which allowed adjournment after four and one-half hours. Well over half of the large crowd failed to see the conclusion of the meeting. Three public hearings for wellhead protection, sidewalk improvements and TIF (tax increment financing) Authority were scheduled. Probably, the vacant seat left by Mike Gartner's death was of at least as much interest to the citizenry.

City Attorney, David Joerg explained the options the council had and advised them to appoint a counil member to complete the remaining time of Gartner's term or until which time there is a special election for the position. Further, if the council wished to hold a special election, they must first pass an ordinance stating under what circumstances the council was authorized to call a special election.

Mayor Dave Pechulis asked for nominations. Steve Knoepke was nominated. Council members Jerry Scheevel and Heath Mensink voted for him and Council member Mike McGarvey and Pechulis voted against. With a tie vote the mayor can appoint his choice. Dr. Robert Sauer was appointed by the mayor, sworn in and seated.

An ordinance governing the calling of a special election was discussed and passed. It does not require that an election be held. If an election is called, it would not be held until January of '04 and would be expected to cost about $1,000.

Wellhead Protection

Arthur Persons, planning supervisor for the Environmental Health Division from Rochester explained the history of the Wellhead Protection Plans. The Groundwater Act of 1989 directed the health department to establish a plan which was adopted in 1997. Preston's well #3 was new in 1999 and therefore requires a wellhead protection plan. The plan includes an evaluation program and the development of an emergency strategy that allows the populace access to safe drinking water.

Mr. Persons stressed that well #3 which is located in the industrial park is 'not vulnerable in that area at all.' Joerg inquired if the program did water testing. Persons replied that they didn't, but 'all water supply has a regimen for sampling and testing.' Currently, the wells are 'not exceeding (federal safe levels) on any of the contaminates that are regulated. Bob Gullickson suggested, "What goes on the ground today, we'll drink tomorrow."

Mike McGarvey wanted more time to study the plan. The question of approving the plan was tabled until the next meeting.

TIF Authority

Representative Greg Davids spoke to the council and citizens about the problem with Tax Increment Financing created by the state two years ago when it took over primary education funding. In short, money coming back in to pay the TIF's was in some cases insufficient. The legislature has authorized that TIF's can be extended one year. Davids explained that there have been similar short-falls all around the state. Banks are sitting on bad debt. Davids says he plans to introduce legislation that will make everyone involved 'whole.' He also suggested that if it is not better one way or another by next year that cities and banks sue the state of Minnesota.

The problem as he sees it was caused by an 'error made by the State.' Davids stated that in his opinion what the state did was 'unconstitutional.' The representative stressed, "Cities, councils, banks. . .all entered contract in good faith."

Mike Bubany of David Drown and Associates explained that tax increment financing (TIF) is a valuable tool used by developers and banks to assist projects. Unlike general bonds that are used for road improvements that are backed by the city, TIF's are revenue bonds or limited obligation debt which cities pay when the money comes in. Two years ago when the state took over school funding, it reduced the local tax rate in the area. Therefore, there are less funds to pay the TIF's. The life of the TIF may be extended to allow more time for payment. Cities are not legally obligated to make good on a TIF; however, they need to make good or they won't be able to find a bank to provide a revenue note in the future.

Bubany suggested that the council 'focus on releasing the local tax rate,' after which the life of a TIF district can be extended. Banks will have to possibly cut interest rates or even reduce principle in some cases in a restructuring of the notes. The council released the cap on the tax rate on TIF's for the Ethanol Plant, Motel, and Assisted Living Project.


Barry Kramer addressed the JOBZ program, which is designed by the state to encourage new or expanded businesses in depressed areas. He encouraged the council to make a decision now if they wanted to identify any properties that could be candidates for the program. Identified properties have to be approved by the council and then by the state. The program is available for twelve years and would subsidize approved businesses for a that period. The city would only get taxes from these businesses over the twelve year period that they do now before any improvements are made to the property. The Mausts sent a formal letter requesting that their property be included in the MN JOBZ program.

Heath Mensink excluded Mausts Heartland site when he made a motion that three properties be included: Preston Iron Works, Foremost Dairy, and the vacant telephone building. Dr. Sauer seconded the motion. The motion was approved with Sauer, Mensink, and Scheevel voting in the affirmative.

Maust Building Permit

Bob and Elaine Maust requested a building permit on September 26, 2003. It was to remodel an existing structure and add a support tower (10' x 75'), storm sewer, diesel fuel tank, etc. The council decided to direct a letter to their attorney on the Heartland matter, Kennedy and Graven, to see if the MPCA needs to issue several other permits before a building permit can be issued and whether any impending law suits effect the issuance of a building permit.

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