TOWER— The city council here, on Monday, approved transferring the assets of the Gunderson Trust to the Duluth-Superior Area Community Foundation (DSACF) for investment management.
The trust, which contains nearly one million dollars in assets, has generated minimal financial returns for years, undermining the trust’s original mission of providing a steady source of revenue for city operations and community projects.
The trust board had spent the past year researching options to generate greater returns and eventually recommended using the DSACF.
The foundation oversees a large number of similar community trusts for communities across northeastern Minnesota and northwestern Wisconsin. The DSACF would guarantee an annual payout of at least 4.75 percent, substantially better than recent returns, which have averaged less than one percent over the past decade, barely covering the trust’s expenses for auditing and legal work.
Trust board member Steve Wilson had led the effort to restore the trust to a valuable source of community funding and the board had voted last month to recommend disbanding the trust and shifting its assets to the DSACF. That decision also required approval from the city council, and will still need a sign-off from the court that oversees the trust, but that’s not expected to be a roadblock to the change.
Under the new arrangement, the trust’s assets would be expected to generate around $40,000 annually although that amount is likely to rise over time, depending on the investment results achieved by the DSACF. The trust board is recommending that 75 percent of that revenue go toward city operations, with the remainder dedicated to community nonprofits.
In other action, the council approved a motion to pay city engineers SEH an additional $4,900 to cover the cost of additional soil testing for the Pine Street reconstruction project. SEH had originally budgeted $8,000 for the work, but the final bill had come to $12,900 and SEH was requesting the difference. The council did not immediately approve SEH’s request for additional labor time to cover the cost of administering change orders. SEH is also seeking two days of extra working time based on its original estimate of 63 working days for the project. To date, the project has entailed 50 working days, and engineer Matt Bolf estimated 15 days remaining and so the company is requesting pay for 65 days, rather than 63. But the council was reluctant to pay SEH for additional days worked until those days have actually been worked. “There are 13 days left and if they don’t use all of them, maybe they owe us money,” said Mayor Dave Setterberg. He noted that the original contract had actually been for 70 days and that SEH had requested additional pay way back in October, but the city had declined at that time. Combined, the Feb. 24 letter from SEH is asking for an additional $14,900 as part of its work on the project. The city had previously agreed to pay SEH $121,600 for its engineering and project oversight of the project, based on 20 percent of the original estimate of the project’s cost.
Council member Sheldon Majerle indicated he wasn’t impressed with the SEH letter, signed by Bolf, requesting the additional funds, noting that it was addressed: “Dear Linda,” despite the fact that former clerk-treasurer Linda Keith hasn’t worked for the city in over two and a half years.
In other business, the council:
• Gave the first reading to a new RV park and campground ordinance that would establish minimum standards for such facilities in the city. The ordinance would require management be on site 24 hours a day, seven days a week and would establish quiet time from 10 p.m. to 8 a.m. The sale of alcohol is prohibited within the parks, as is the use of fireworks, except on July 4. Pets must be leashed and must not be left unattended while outdoors. Only certified firewood will be allowed for sale. All lighting must be directed downward to meet Night Sky standards.
• Heard an update from Clerk-Treasurer Michael Schultz on the city’s water and sewer billing, which was changed to reflect that the city is no longer collecting funds for debt service for the Tower-Breitung Wastewater Board’s water filtration plant. Schultz said he would monitor the new billing from the TBWWB to better understand the city’s utility costs before recommending any billing changes.
• Heard a proposal from Setterberg for creating a “movies in the park” event on summer evenings, most likely at the former football field. Setterberg had looked at an inflatable screen that could display movies, which could cost up to $3,000 including everything needed. He suggested that the fireman’s relief association might be able to help finance it. He said the cost of licensing a movie would run about $450 a time but suggested that local businesses might be willing to sponsor the showing. Setterberg motioned to allow the clerk-treasurer to reach out to other groups to see if there is interest in advancing the idea. Council member Joe Morin said he liked the idea but suggested considering some kind of goose control on the field. Majerle suggested the harbor would be a better location, and Morin noted that TEDA is considering a community space on the west end of the harbor, which could be a location for such an event.
• Authorized Setterberg, Morin, maintenance supervisor Ben Velcheff, and Schultz to explore alternatives and funding possibilities for replacing a shared sewer lateral that serves three residences on S. Second St. Schultz said the city normally does not support maintaining shared laterals, but that issues with ledgerock had made the installation of individual lines prohibitively expensive. He said the installation of separate laterals for each residence would likely cost hundreds of thousands of dollars. A less costly option would entail replacing the shared lateral, which Schultz said Velcheff estimated to cost between $30,000-$40,000.
• Approved a donation of $250 to the St. Louis County Fair.
• Heard from Schultz that the city has received one bid so far for the old grader. It’s been advertised the past two weeks with a minimum bid of $5,000, with bids due by March 17.
• Heard about a foreign sports car show to be held at Fortune Bay in June.
• Approved a three-year retainer agreement with the Colosimo, Patchin, Brunfelt law firm with a monthly retainer of $500 per month in 2022, increasing to $575 per month in 2023 and $650 per month in 2024. Setterberg said he found the increases to be “pretty steep,” but Majerle said the city used to pay a $600 a month retainer for its city attorney 20 years ago. The motion passed 3-1, with Setterberg voting no. Council member Kevin Norby was not present at the meeting.
• Referred proposed changes to the city’s zoning ordinance, drafted by council member Norby, to the city’s planning and zoning commission for review.