TOWER — The city council on Monday set their preliminary levy at $457,000 for 2026, a six-percent increase over the current fiscal year. In approving the increase, councilors made it clear that they intend to trim that number somewhat before setting the final levy in December.
Acting Mayor Joe Morin presided over the meeting as Mayor Dave Setterberg was under the weather.
A six-percent increase, which would generate an additional $26,000, isn’t enough to pay for any projects, noted Clerk-Treasurer Michael Schultz.
“It’s more to, you know, keep up with the cost of living,” he said. Wage increases and higher costs for health insurance for employees have been the biggest drivers of higher spending in the city for years.
While the city has spent millions on major projects in recent years, those are almost exclusively funded by grants.
Schultz told the council that he’ll need more time to finalize the budget for next year, but that he expected to have that all completed ahead of final budget decisions in December.
“At this point, this is more of a placeholder,” said Councilor Bob Anderson. By state law, the council can reduce its preliminary levy but can’t increase it.
Councilor Kevin Norby said the city isn’t trying to stockpile funds, but that it needs to keep pace as city costs rise.
At the same time, Schultz noted that the city’s budget continues to improve.
“Looking over the numbers, which I’ve done a lot over the last week, we are seemingly in a good position,” he said.
The city’s finances were helped recently by an unexpected $66,000 payment from the Federal Aviation Administration in final reimbursement for the airport building constructed in 2020. At the same time, the city is expecting to start receiving a few tens of thousands of dollars annually from the former Gundersen Trust, now managed by the Duluth-Superior Area Community Foundation.
“On the other hand, there have been a handful of things that we have to spend money on, you know, eight grand here, four grand there,” Schultz added.
The city will also need to begin making payments on the bond used to purchase the former county garage, now the city’s public works facility.
In other budget-related action, the council opted to use a contract cleaner to handle some of the public facilities cleaning duties currently done by the maintenance staff. Schultz noted that the city’s summer seasonal worker left earlier than expected and that it has put added pressure on the city’s two remaining maintenance staff.
Schultz said the opening of the Green Flush toilet near the civic center has increased the workload.
“It’s getting a ton of use, so it needs to be cleaned all the time,” he said.
Schultz estimated the annual cost of the contract at around $11,000. He said Campground Manager Randy Pratt had recommended a person he had hired to do cleaning there, which the council opted to hire on an interim basis. Councilor John Van DeVoort urged advertising the position to be fair to everyone.
“I don’t want the feeling that someone is being slotted in because we know them,” he said.
In other business, the council:
• Authorized soliciting bids for the water and sewer extensions to serve the harbor project as well as the development behind the Marjo Motel. The council is expecting to award that contract in early October, with the work expected to be completed by spring of 2026.
• Accepted the low bid of $95,000 from C&C Winger for removal and replacement of the large concrete ramp panels at the Hoodoo Point boat landing. Schultz said the work is supposed to be completed yet this year to ensure that the landing is open all next season. He said the anticipated closure of the Moccasin Point landing for reconstruction next year will likely bring considerable additional traffic to the Hoodoo Point site.
• Heard from Schultz that the utilities and street work on S. Second and Third Streets is set to get underway possibly yet this week, with anticipated completion by Oct. 15. Some of the large ash trees along S. Second are going to be removed as well and replaced with new trees.
• Authorized getting more information on a proposal by Al Kilberg, with the Tower-Soudan Historical Society, to add an ore car to the train display at the train depot. He said the DM&IR is planning to scrap old ore cars but is willing to donate one for the display if the city pays to transport it. Kilberg provided the council with some initial measurements, which suggest there is likely room for the car in the display. City officials will do some assessments of their own before making a final decision.
• Heard that the city’s fire department now has a loaner fire engine in place while work continues on needed repairs to its PT-1 engine. Van DeVoort asked whether the city’s firefighters are trained on the temporary replacement, which could be in place for a few weeks. Schultz also noted that the city has received no response to its advertised opening for a new fire chief. Steve Freshour continues to serve as interim chief.
• Approved the hiring of Shawn Gawboy and Kathryn Hill as new firefighters.
• Heard that the city received an additional $2,480 in administrative reimbursements from FEMA for work in connection to the June 2024 flooding event.
• Heard from Schultz that the kayak launching dock was vandalized. Schultz said city maintenance staff will attempt repairs.
• Tabled action on a proposal by Orlyn Kringstad for the installation of “Doggie Duty Stations” at various locations in the city to reduce blight. Schultz said he’s urged Kringstad to enlist a civic organization to undertake the effort.
• Approved a motion to authorize Norby to work with the Mesabi Trail on coordinating the entrance to Tower when the trail reaches the city sometime next year. The Mesabi Trail plans to install one of its trail arches near the trail crossing on Pine Street, along with an informational kiosk.
• Approved a motion to issue requests for proposals for professional positions like city engineer and city attorney for consideration during the reorganization in January.