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Serving Northern St. Louis County, Minnesota

Council OKs three-percent levy hike for next year

Marshall Helmberger
Posted 12/15/22

TOWER— For the first time in three years, the city council here has voted to increase the city’s tax levy, by three percent over the 2022 levy of $394,761. That will push the city’s …

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Council OKs three-percent levy hike for next year


TOWER— For the first time in three years, the city council here has voted to increase the city’s tax levy, by three percent over the 2022 levy of $394,761. That will push the city’s property tax levy to $406,604 next year.
Many city residents are likely to face an even bigger increase in their property taxes next year, however, in large part due to a change in the fiscal disparities pool which is costing the city about $20,000 for 2023. That, combined with the three-percent levy increase, is expected to push the city’s share of local tax bills up by about eight percent on average.
Council members were aware of that impact and had considered leaving the city levy unchanged for a third straight year. Clerk-Treasurer Michael Schultz had prepared fund balance figures that suggested the city was making some progress in restoring its fund balances. But council member Kevin Norby noted that Schultz’s figures suggested little improvement in 2023 without a levy increase.
“We know that some things are going up,” Norby said, citing three-percent wage increases for city employees, ambulance expenses, and the police contract.
Mayor Dave Setterberg said he was concerned that residents were already going to be affected by the fiscal disparities shortfall but agreed with Norby that the city needs revenue to address key priorities that aren’t currently included in the 2023 budget. Among them are sewer repairs on S. Second and Third Streets, which could cost the city as much as $100,000. Setterberg noted that St. Louis County is likely to be ready to sell its public works facility on Marina Drive by the fourth quarter of next year. The city has expressed interest for some time in acquiring the property once its available. The county is currently having the site appraised in anticipation of a possible sale to the city.
The city may have to provide gap funding of $15,000 for the purchase of a new ambulance next year and has other planned sewer repairs in the works on Pine St. as well as N. Second and Third Streets.
The three-percent levy increase, which is expected to raise just under $12,000, won’t go very far toward covering those priorities, but the extra funds could provide a bit of matching money if the city can find other funding sources, such as the IRRR and CDBG, to help pay for things like sewer repairs.
Setterberg suggested that the city could drop its $5,000 levy for TEDA but Schultz said he wasn’t sure of the legality of making that change at this point. Council member Joe Morin, who also sits on the TEDA board, said he expected the board would be amenable to making a financial contribution to the city from the revenues it received this year from the sale of land on Mud Creek Rd. which TEDA sold at the peak of the recent real estate boom.
In related action, the council approved a 2023 city budget that includes $2.58 million in anticipated revenue and total expenses of $84,607 in expenditures. Schultz said anticipated income from the ambulance replacement fund and Gundersen Trust account for the apparent surplus because those funds likely won’t be expended until 2024.
Ambulance business plan
The council also gave approval to an ambulance service business plan that’s been on the shelf for well over a year. Setterberg called it a “living document” and noted that it’s continually subject to change, but acknowledged that some area townships have been pushing the city to issue the plan to the ambulance commission since the city had agreed to do so as part of its contract with area townships that contribute to the ambulance replacement fund. “It was put in the contract for some reason that we have this done and it’s part of one reason why one of the communities has not signed off on the contract and been willing to donate,” said Setterberg.
While approval of the business plan for distribution to area townships resolves one issue, Setterberg noted that one township [Greenwood] has also been demanding an indemnity clause that would hold the township harmless if one of its First Responders who are not members of the Tower Ambulance Service, committed some kind of error during an ambulance call that led to litigation. Norby said he had relayed to Greenwood officials that the city was willing to include their requested indemnity clause but that the city would want similar language protecting itself.
“So basically, they want protections for their township,” said Setterberg. “We were asking for the same thing but it didn’t sound like that was acceptable. So, that’s what we’re trying to work through. Is that everybody should have the same protections. Not just them.”
“If it’s good for the goose, it should be good for the gander,” said Norby.
In other business, the council:
• Approved a resolution to move forward with a cartway petition presented to the city by developer Dave Rose, but only after he has deposited a total of $19,050 to cover anticipated legal fees, survey costs, and compensation to the landowner whose land is impacted by Rose’s planned driveway. Rose is seeking to access a five-acre parcel he owns on Pike Bay, just west of the mouth of the East Two River.
• Gave an “exceeds expectations” rating to Schultz as part of his one-year performance review. Morin said Schultz has done a “fabulous job” in a position with a steep learning curve. The council approved a three-percent pay increase for Schultz for next year.
• Approved a three-percent pay increase for Hoodoo Point Campground manager Randy Pratt. Councilors noted that Pratt has done an excellent job and hadn’t had a pay increase since 2017. “It’s one of our best assets and he runs it really well,” noted Norby.
• Approved the new agreement transferring assets from the Gundersen Trust to the Duluth-Superior Area Community Foundation.
• Approved a 2023 police contract with Breitung Township for a total of $76,992. The city is budgeting an additional $3,007 in overtime for a total budget of $80,000.
• Agreed to reopen the application period for a part-time city maintenance worker to allow the city to consider two applications and a letter of interest it received after the deadline. The new deadline is Jan. 4, 2023.
• Heard an update on the transfer of land encompassing the civic center and mini-park from TEDA back to the city. The land had been unnecessarily transferred to TEDA last year as part of the finalization of the harbor plat. Schultz said city attorney Joel Lewicki has drafted a quit claim deed and legal descriptions to enable TEDA to transfer ownership back to the city. The city is still waiting on SEH to verify the legal description.
• Approved exploring the possibility of renaming the portion of Spruce St. in front of the Tower-Soudan School in honor of the late Carol Alstrom, a longtime physical education instructor at the school who had a major impact on the lives of many students. The city is also advancing a proposal to install a Love Lock Post near the school. Schultz said he had walked the school area with council member Bob Anderson and maintenance supervisor Ben Velcheff looking for possible locations for the post, which would also commemorate Alstrom.
A fundraising effort led by a former student would pay for the marker.
• Approved a revision in the city’s Code of Ethics which requires that city employees report violations of the code when they become aware of them.
• Agreed to look into possible increases in airport hangar and cabin leases, which have not been updated since 2015.
• Agreed to pay for a full maintenance package for the city’s elevator, which Schultz said is not currently operating.
• Appointed council member Josh Zika to the Tower-Breitung Wastewater Board and Orlyn Kringstad to the Gundersen Trust board.
• Approved a design and construction services proposal by SEH totaling $19,900 for a crack sealing project at the airport. The city’s share of the cost will be $950, with the bulk of the expense covered by the FAA.