TOWER- The Tower Economic Development Authority (TEDA), at their June 6 meeting, had several pointed questions for City Clerk-Treasurer Linda Keith relating to issues recently raised on the Tower Harbor Shores loan payouts that were approved by the city and IRRR back in 2017. Last month, the Tower City Council, at Keith’s urging and over the objections of Mayor Orlyn Kringstad, moved to forward issues raised by Keith and Ambulance Director Steve Altenburg to the state auditor for review.

But some TEDA members questioned Keith’s motivation, the timing of her concerns, and why she never brought her concerns to TEDA itself.

“I feel very frustrated with what has gone on with the loan,” said TEDA member Joan Broten. “We signed off on the harbor loan, and now there are questions on how it was handled. I feel like it is a personal attack on our committee members. We felt like everything was handled correctly.”

The $125,000 funding package to Tower Harbor Shores came from Department of Iron Range Resources and Rehabilitation, passed through TEDA, to help fund pre-development costs like concept planning, architectural drawings, engineering, and marketing. At the time, TEDA officials reviewed the project’s finances and examined related invoices to be sure they were qualified expenses. Keith, as grant manager, had the final say on approval of any invoices submitted to the IRRR under the project. The loan monies, once repaid, were then earmarked to be used to fund future TEDA development projects.

Broten questioned Keith’s handling of the issue and suggested it won’t help the city attract potential development. “This will turn people away from wanting to conduct business in Tower,” she said.

Newly-reinstated TEDA member Marshall Helmberger agreed, and said the concerns appear politically-motivated. “This grant was closed out in August 2017,” said Helmberger, who was directly involved with getting the loan from the IRRR. “All the invoices were approved by the city clerk and by the IRRR.”

Helmberger said the concerns raised on the loan appeared politically-timed to hurt Kringstad, who was elected as Tower’s Mayor in November 2018.

“This was never an issue for a year and a half,” said Helmberger, “until Mr. Kringstad ran for mayor. And then it became a five-alarm fire in city hall, raising a lot of smoke to try to defame people.”

TEDA member Rachel Beldo, who also sits on the city council, said the council did not know how the issue came to the concern of the auditors, wondering if “there is more to this story of why it was all of a sudden a concern.”

The city’s most recent audit did raise a question on one invoice, indicating there was insufficient documentation to determine whether it was an allowable cost and recommended that the city get more information to be sure that the invoice was for actual expenses. The invoice made note that the project’s architect, Dewey Thorbeck, was resigning as a member of the development team, and Keith has suggested the invoice was potentially a buyout rather than a bill for qualified services. Thorbeck, in a written response, categorically denied that the payment was a buyout and specified the services that his office provided. But Keith indicated that Thorbeck’s explanation did not satisfy her and that she would include his explanation with the material sent to the state auditor.

Helmberger said TEDA should demand to see all the information that had been submitted to the state auditor and made a motion to have the clerk-treasurer provide the members of TEDA with a complete packet of all information sent to the state auditor by their June 27 meeting. The board approved the motion unanimously.

New members seated; terms

corrected

The TEDA board, after months of confusion over the makeup of the board, took quick action this past week to restore TEDA’s members to their original terms. The roster of TEDA members and their terms of office that the clerk-treasurer provided to the city council during their annual reorganization included unauthorized changes to the terms of five of the seven members of the board. Board chair Steve Peterson Sr. said he had reviewed the city council minutes from 2017 when the council first established the seven-member TEDA board and he provided a new chart showing the proper terms of office for TEDA’s members.

The city council, at their May 28 meeting, unanimously reinstated Marshall Helmberger to his seat on TEDA. Helmberger, who had been appointed to an initial three-year term back in 2017, was removed by former Mayor Josh Carlson one year later in apparent retaliation for critical reporting of some city actions. The removal of members of an economic development authority is governed by state law, however, which includes a requirement for due process, which the previous city council never provided. It appears that city officials chose to get around that requirement by altering Helmberger’s term in city records to make it appear his term had simply expired. That action, and any coordination by city officials in connection with that act, is currently under investigation by the St. Louis County Sheriff’s Office as a potentially criminal act.

At Thursday’s meeting, the board clearly labeled each seat with its term end date and passed a motion to have the council memorialize the corrected chart by motion at their next council meeting. The city’s auditor, back in April, had raised concerns about inconsistencies between city minutes and the terms of office provided by the clerk-treasurer this past winter as part of the city’s reorganization. The roster is maintained by the clerk-treasurer.

In addition, TEDA passed a motion to have the council retro-actively reinstate Joan Broten, effective January 2018, to a six-year term. Broten’s initial term had been for one-year, but the unauthorized change in the roster had extended her term to three years.

The board also passed a motion to recommend the city council appoint Nate Dostert, as a business owner, and Dick Larmouth, as a resident, to fill the remaining two vacancies on the TEDA board. Broten noted that Larmouth is a retired Ford executive, with expertise and time to add to the board.

Current TEDA members are Steve Peterson Sr., Joan Broten, Rachel Beldo (councilor), Sheldon Majerle (newly-appointed councilor), and Marshall Helmberger. Richard Hanson, who had been serving on the board, submitted his resignation at this month’s meeting. Current TEDA secretary, deputy clerk Terri Joki-Martin told the board she was resigning as secretary. Clerk-Treasurer Linda Keith told the TEDA board she would be assuming that role.

The board plans to do its formal reorganization at their next meeting, June 27, when it seats the final two members.

Tower Harbor Shores

Michael Wood, an investor in the Tower Harbor Shores project, asked TEDA to approve continuation of the interest-only loan payments on the TEDA loan for the next six months, since the project still is stalled due to the lack of a finalized plat.

“To make sales we need correct drawings and legal representations,” Wood said. “For almost a year that process has been stalled….we have been dead zero in the water for almost a year.”

Keith said the city still did not have a timeline as to when the plat would be approved.

“TEDA needs to do everything it can to support this project,” said Beldo.

TEDA asked that Keith get a list of everything that still needs to be completed for the plat to the developers by the next council meeting on June 10.

The developers need a finalized plat to draft the legal descriptions for the property they hope to sell to town home buyers, so the months of delay in finalizing the harbor plat has left the project stuck in neutral.

TEDA passed a motion to allow the interest-only payments to continue, as the developers requested.

Keith urged them not to extend the interest-only terms, since she said the loan is under investigation.

“I don’t think you should do anything,” Keith told TEDA.

Beldo asked that TEDA be allowed to act as oversight on the harbor project, to facilitate its progress.

Broadband projects

Members of the Broadband Project Committee spoke with TEDA about the process for approving projects to be funded under a $75,000 Blandin Foundation grant. Chairman Joanne Bassing gave a general outline of the current project proposals, and also talked about the group’s efforts to raise money for a matching grant to fund a feasibility study, which is the next step in the process. The Tower-area group is working with two other groups, from Aurora-Hoyt Lakes, and the Laurentian Chamber, to raise up to $75,000 that would be matched one-to-one by Blandin, to fund the study. The feasibility study would identify the best possible technologies to expand broadband access, gather information on potential customers, and work to attract a telecommunications provider partner for the project. At that stage, the group would apply for available state funding for broadband expansion.

TEDA members noted that fast and reliable Internet connections are at the top of the list for businesses looking to locate to this area.

“We don’t want to be at the back of this bus,” said Peterson.

Helmberger noted that the broadband cable is already in the city of Tower, but funding is still needed to attract providers to complete the connections to interested businesses.

Providing broadband speeds to customers in the rural townships is more complicated, but the feasibility study would investigate which options would work best in specific areas.

The TEDA board approved a request from the broadband committee to let the committee approve the actual projects. TEDA is the fiscal agent for the project, and payments will be processed through Tower City Hall.

TEDA said it would look at options for financially supporting the feasibility study at its next meeting, once it has an updated treasurer’s report.

Welcome to Tower sign

Tower Economic Development Authority (TEDA) member Joan Broten reported that the permits needed to install the new Welcome to Tower signs have been received from MnDOT.

“Thank you Marshall [Helmberger] for getting that moved along,” Broten said, noting that a data practices request from the Timberjay publisher had shown that the city’s request for a permit had been stuck on hold for over nine months because paperwork sent to the MnDOT office in Duluth had not been forwarded to St. Paul for final processing.

Clerk-Treasurer Linda Keith said the contractor hired to do site prep had been contacted so that work could begin as soon as possible. Broten said she would follow up to make sure work begins soon.

Disc golf course

TEDA continues to move ahead with a proposal to build a disc golf course in the Tower area. Two sites are being considered, one on the wooded hillside behind North Third Street up to the Lee Mine area, and the other by the Tower Ski Trails on Highway 135.

The estimated cost for an 18-basket course is $7,000, Broten said.

Grant-funding for the project is available. The course would be designed by a professional disc golf designer, who will be in the area this week to tour the two sites and along with some TEDA members, make a decision on the final site.

TEDA members would like to see the course as close to downtown Tower as possible, so the hillside site is preferable.

Day care

Marit Kringstad, a former TEDA member, asked if TEDA was interested in working to restart the day care center. The center closed about six months after it opened due to a staffing shortage, but the license to operate the center is still active through the end of 2019.

The day care was overseen by the Community Development Corporation, whose members were merged onto the TEDA board in 2017.

Rachel Beldo noted that lack of day care limits people’s ability to work. “This is a crisis situation in Tower,” said Broten.

Helmberger said TEDA might want to look at attracting a home-based center, possibly providing help getting a home day care licensed, because that process is much simpler that the logistics of running a center-based program. Broten noted that a day care center provides a higher quality of care.