Although the Cook County – Grand Marais Economic Development Authority (EDA) board heard good news from its housing coordinator and golf course representatives at the Tuesday, September 8 meeting, it faced dire budget news.
EDA budget committee member Bruce Martinson said he and fellow committee member Jim Hall had spent several hours earlier in the day looking at the EDA’s debt for the remainder of the year. He pointed out budget cuts such as the EDA director’s hours and wages and the fact that EDA board members had not received per diem payments for nearly a year. He noted that the EDA’s contribution for the housing program, $15,000; its line-of-credit payment to Security State Bank, $36,000; liability insurance payments, $7,400; estimated auditor expense of $20,000; anticipated wages, $20,000 and more are items for which payment cannot be delayed. However, Martinson said, there is not enough money in the EDA account to make those payments.
Martinson noted that the EDA has spent thousands of dollars in legal fees to help negotiate fines levied by the Minnesota Pollution Control Agency (MPCA) for storm water infractions when KGM Construction built the Cedar Grove Business Park. Martinson said those fines and/or legal fees are still being disputed. He said the EDA hopes that ongoing negotiations with the Minnesota Pollution Control Agency and KGM Contractors, Inc. will reduce that amount, but said that even with that expense eliminated, the EDA is facing an endof year shortfall of $16,500. “I think we have to go to the county board to ask for an advance on the EDA levy,” he said.
However, he added that if the EDA gets an advance on the levy, it would be starting 2010 with a deficit. “We’ll have the same problem by June,” said Martinson.
EDA board member Mark Sandbo said, “We’re not levying what we could be. Our levy is $140,000—the levy cap is $240,000. We need more to operate.”
EDA Director Matt Geretschlaeger agreed, “The bottom line is it costs money to do business. We’ve been aggressive— with the housing program, with fixing up the golf course. Since the EDA was formed in 1989 until the last few years, very little was accomplished. You have done a lot. The cost-benefit analysis that I completed demonstrates that. We’ve been trying to do business with smoke and mirrors.”
EDA board member Jim Hall pointed to the Cedar Grove Business Park plat map and said, “We need to sell some lots.”
That is not the answer, said Martinson. He noted that the lot-pricing scheme under consideration does not charge enough for the lots to cover the utility assessments. “Selling lots won’t help the EDA,” he said.
Jim Hall said if more revenue is not found, the EDA office would have to close. Sandbo asked, “If we close the EDA office, what happens to the golf course?”
“It reverts to the county,” said EDA Chair Mike Littfin.
The board agreed that the EDA is necessary and agreed to go to the county board to plead for a levy increase. “We built a balanced budget for 2010,” said Sandbo, “but we have an estimated $20,000 shortfall in 2009 because of unforeseen expenses, such as legal fees.”
Martinson suggested that the EDA ask the county to add a line item to the EDA budget to cover 2009 expenses. Littfin agreed. “We have a lot of expenses, like $11,000 to the state auditor. With the business park, our liability insurance goes up. I think our levy should represent these increased costs. To say we can’t increase our levy $15,000 to cover the housing program which has brought $300,000 is foolish.”
Martinson, who is also a county commissioner, said he would put the EDA on the board agenda for Tuesday, September 15. The board agreed not to assume that its legal fees would be reduced and decided to ask for an increase to cover the entire potential deficit, or $31,000.
Theboard followed up on last month’s discussion of modifying business park lot prices to better reflect land values. Tentative lot prices ranged from $10,000 to $60,000. Martinson noted the reduction from the formerly fixed price per lot of $75,000. He said the lower priced lots did not cover the cost of the utility assessments. He said, “I think we should adjust pricing. Not all of the lots should be the same. But I think they could be sold with assessments.”
Littfin said prices must to be set so the business park property can be put out in the real estate market. “If we have prices, we can get someone to start pushing these lots. We’ll have help with marketing. We would have someone with a vested interest in getting lots sold,” he said.
The board established a subcommittee to work with the city of Grand Marais to determine lot pricing and how to handle the $60,000 per lot infrastructure assessment. Serving on the subcommittee will be Bruce Martinson, Mike Littfin, and Mark Sandbo.
“We need to negotiate with the city,” said EDA board member and city councilor Jan Sivertson. “Everyone should share the loss.”
Superior National at Lutsen Grounds Supervisor Mike Davies reported that the longawaited cart path paving had finally been completed—at least in part. Davies said KTM Construction of Hermantown, the low bidder for the paving project at $200,166.60 started path excavating on August 24. They completed excavation and began paving by September 1 and finished paving by September 2.
However, Davies told the board that the low bid was higher than anticipated, so the scope of the project was reduced. Instead of paving all of the unpaved cart paths, only the nine holes of the Canyon course and one hole of River course were paved. He said a total of 4,539 feet were paved. An additional 418 feet of cart path needed repair from the heavy equipment traveling to the portion of the path, bringing the total linear feet of the project to 4,956.
In addition to the cart paths, KTM Paving completed crack sealing and seal coating of the golf course entrance and parking lot. Davies said KTM Paving was great to work with. “We didn’t stop play. They didn’t have problems with golfers coming and going,” said Davies, although one worker was hit with a stray golf ball. He was not seriously injured.
Davies said golf course staff worked well with KTM Construction. As the company excavated material, it was instructed where to dump it on the course. Those locations were smoothed, mulched and seeded by golf course workers. Davies said about 417 hours of maintenance time had been logged, which can be used as in-kind labor to match the $100,000 grant from Iron Range Resources (IRR) for the cart paths.
In other business, the EDA golf course committee is meeting with representatives from the Make-A-Wish Foundation on Wednesday, September 23 to discuss hosting a Make-A-Wish Golf Tournament in 2010.
The members of “Friends of Superior National” who will serve on the EDA golf course subcommittee have been selected. Representing the golfing public will be Don Elverstrom and Jim King.
Housing coordinator Nancy Grabko of Community Fundraising Solutions congratulated the EDA on its successful application to the Greater MN Housing Fund (GMHF) for $30,000. Thepurpose of the grant is to enable the Cook County housing program to continue its work to create affordable, livable housing in Cook County.
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