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Parks sales tax to fund some of south shore purchase

If at first you don't succeed, try again.

It took two attempts, but the Bemidji City Council did authorize the spending of $659,587 from the half-cent parks sales tax to pay for the purchase of three properties along the southeast shore of Lake Bemidji.

The motion, by Councilor Nancy Erickson, initially failed on a 3-3 tie as Councilors Onen Markeson, Jerry Downs and Barb Meuers voted against it.

But, on a second try - following another failed vote that would have authorized $481,669 to come from the sales tax - Meuers changed her vote and the motion passed 4-2.

The council struggled to identify the best funding source for three properties in the south shore development area.

Markeson and Downs were concerned that too many parks sales tax dollars were being used to buy parkland property - and very little funds would be left over for the development of parkland.

Both favored more bonding dollars to buy the land.

Erickson said the City Council should be considering every possible method of lowering the overall bonding amount, since taxpayers are ultimately responsible for paying the bonds back.

While the city plans to recoup some costs through the resale of certain lands and development on the property, Erickson said the council needs to consider all funding sources.

"If we don't dedicate ourselves to that today, we know we're going to be hurting in the future," she said.

Mayor Richard Lehmann said it didn't matter where the money came from as long as the city came up with the funding to buy the land.

"One way or the other, we've got to pay for these," he said.

Dave Smith, the chair of the Parks and Trails Commission, reminded the council that the sales tax to fund parks is not unlimited.

"We're going to run out of money before we run out of parks," he said.

The three properties in question are those owned by Duane Sea ($303,751), Joe Waslaski and Kris Klasen ($125,836), and Dean Schnell (230,000).

The parks and trails plan already had $900,000 set aside for parkland acquisition and development.

Markeson and Downs were not arguing against the legitimacy of utilizing park funds - the properties are planned to be utilized as parkland - but rather about the amount of money being spent on land acquisition.

"What I'm really concerned about is what we have left over for the development of the parks," Markeson said.

Erickson said the City Council should be well aware of how expensive land is.

"You should realize two-thirds of the $900,000 is going to go to be for parkland acquisition," she said.

City Attorney Al Felix reminded the council that city staff is actually working toward obtaining a fourth parcel of land. While not expected to be too expensive, he said, city staff would hope its purchase, too, would be funded through sales tax dollars.

"But then there's nothing for development," Markeson said.

After Erickson's first motion failed on a 3-3 tie (Councilor Ron Johnson did not attend Monday's meeting), Markeson made a motion that the Sea and Schnell properties would be paid for through sales tax dollars, but the Waslaski land would be included in a bonding package. No one seconded the motion.

Downs then made a motion that $481,669 of the $659,587 would come from sales tax dollars and the rest from bond, Markeson seconded the vote, but it failed 3-3 (Erickson, Meuers and Councilor Roger Hellquist were opposed).

Erickson then said she would make her original motion again and Meuers said she would change her vote. It passed 4-2.

The matter was originally included in the consent agenda, but Markeson asked that the item be removed for discussion.

Public hearings

The City Council and Bemidji Economic Development Authority each held a public hearing Monday in relation to the south shore.

The council invited the public to comment on the city's intent to issue $14.5 million in bonds to buy south shore property, and cover the first two years worth of interest, from current landowner ShoreQuest L.L.C.

The city has a purchase agreement in place with ShoreQuest owner John Zacher to buy 106.48 acres for $11.77 million.

The council did vote to up the amount from $14 million to $14.5 million after Finance Director Ron Eischens said closing costs may be higher than expected and the total should cover all interest for two years. The council voted unanimously to approve.

Following the council meeting, the EDA, which consists of the City Council members, convened and held a meeting on the establishment of an economic development district.

The city needs to identify an area as an EDD to meet legal requirements, Eischens explained.

Again, no one from the public spoke. The council voted unanimously to approve.

The EDA will meet in a special meeting at noon Christmas Eve, Dec. 24, to make a final vote on issuing $14.5 million in bonds.