Bemidji city surplus may be used on South Shore bonds

During its work session Monday, the Bemidji City Council showed a consensus on using surplus dollars on paying down South Shore land bonds. The topic was part of a larger discussion on the city's finances.


BEMIDJI -- While no formal action was taken, the Bemidji City Council on Monday expressed interest in using budgetary surplus dollars on paying off land on the South Shore of Lake Bemidji.

More than a decade ago the city used bonds to buy property on the South Shore to spur development along the area. Since then, the Sanford Center opened in 2010, followed by the Country Inn and Suites hotel opening in 2014.

A few years later, the city cleaned up debris from the area and opened South Shore Park in 2017. Then, in 2018, the South Beach Apartments opened along the shoreline.

During the May 10 meeting, City Finance Director Ron Eischens noted how Bemidji had an undesignated surplus of $642,000 for its 2020 budget. Eischens said using those funds to pay off the outstanding balance of South Shore bonds, estimated at $1.2 million, could free up $223,000 in tax levy dollars.

"I think it's a smart way to use one-time money to free up ongoing dollars," Mayor Jorge Prince said. "If you use a one-time fund to pay that bond off, it frees up the levy each and every year. That's pretty significant."


The Sanford Center was also brought up Monday in relation to the city's annual investment. The 193,000 square-foot event facility is owned by the city and managed by the Iowa-based company VenuWorks.

The structure includes conference space and an arena with more than 4,000 seats. It is home to BSU's hockey programs while also being home to events such as concerts and trade shows. To support the building's operations, the city has been investing $450,000 annually.

When asked what the city staff's biggest request is when it comes to financial changes, City Manager Nate Mathews said it's establishing a food and beverage tax. In the past several years, city officials have advocated for a hospitality tax, such as a food and beverage tax, to be created to capture additional revenue to alleviate the property tax dollars that are now invested.

"The Sanford Center's $450,000 is a drain on our property taxpayers and it's putting us in a bind right now," Mathews said. "We need to crack that."

Another topic discussed Monday was recreating a community development position. In July 2019, Steve Jones was hired for the role at an annual salary of $86,601 . Jones left the role after 10 months, though, to relocate to be closer to family, and because of the coronavirus pandemic, the city didn't hire the position again.

On Monday, the council showed interest in investigating either rehiring for the community development director or creating an assistant city manager role. The position would potentially assist with city manager duties, write grants and work with developers.

In her comments, councilmember Nancy Erickson said she wants to wait until union negotiations are held and more research can be done on funding the position.

"However, this is absolutely a top priority to me," Erickson said. "I think that can be stated, that we want to place this near the top."


City workers in the Fire, Public Works, Parks and Recreation, Liquor and Police Departments are represented by unions and the current contracts will expire Dec. 31. Union requests for future contracts are due June 1 and the city will hold meetings on the matter next month.

What To Read Next
Get Local