Welcome to town: Newly annexed Bemidji residents are in Ward 3

BEMIDJI -- The third and final phase of an annexation agreement between Bemidji and Northern Township came to fruition last week as the city's borders were officially expanded.

Originally approved in 2004, the agreement brought portions of Northern Township into the city in 2010, 2015 and now, 2020. The latest section extends northward from Anne Street up to Lakewood Drive NW, and westward to U.S. Highway 71 and the Bemidji Regional Airport.

The first phase of annexation was bordered by Lake Bemidji to the east and Irvine Avenue to the west, between Robertson Drive NW and Norwood Drive NE. The second phase included property along Birchmont Drive and Bemidji Avenue, also bordered by Lake Bemidji, Irvine Avenue and north to an area just below Elm Street NE.

The annexation, set to add more than 500 residents to the city's estimated population of 15,404, was authorized by the state on Feb. 5. With a new portion of the city coming in, city officials recently had to review how the wards will expand.

"Because of the congressional districts, when an annexation occurs in a census year, people being absorbed by the city need to go into a specific precinct," City Manager Nate Mathews said. "All of those residents are in the 8th Congressional District, so all of those residents are being assigned to Ward 3."

Ward 3 is currently represented by Ron Johnson, who earned a fifth term on the council in 2016, where he ran unopposed and received 1,117 votes.

"After the census happens this year, we'll get our final numbers in 2021," Mathews said. "Then, the city council will work with the county and state on redistricting the wards, because we want them to have equal populations."

While land was brought into the city from Northern Township steadily over the last decade, it wasn't without its share of roadblocks. The annexation agreement originally had three parties, including Bemidji Township.

After the first phase became official in 2012, Bemidji Township filed a lawsuit against the city. The two entities would later come to a mediation settlement in 2013, resulting in properties annexed from Bemidji Township and not served by city utilities to have the option of returning to the township.

Litigation continued in March 2014, when 9th District Court Judge Paul Benshoof ruled in favor of the city, ordering the Bemidji Township to be dismissed with prejudice. Then, in April 2014, Bemidji Township filed a second lawsuit against the city, as well as Northern Township and the Greater Bemidji Area Joint Planning Board.

In November 2014, 9th District Judge Jana Austad dismissed claims in the second suit, citing similarity. That ruling, though, was reversed by the Minnesota Court of Appeals in May 2015.

Nearly a year later, in July 2016, Austad ruled to dismiss the claims made against the city in the second lawsuit. With that ruling, Bemidji was no longer attached to the lawsuit.

In 2017, a settlement agreement was reached between the city and both townships. The settlement officially removed Bemidji Township from the orderly annexation agreement and from the Greater Bemidji Area Joint Planning Board's authority, effectively bringing an end to the litigation saga.

According to City Finance Director Ron Eischens, the property coming into Bemidji has a property value worth $60 million, and could generate an estimated $335,000.

"That's something we're going to be talking to the council about on Feb. 24," Eischens said. "Of that amount, we will be sharing the revenue with the township."

The revenue sharing is a function of the orderly annexation agreement. In the first year, the township will get 100% of the property taxes. Then, each year, the amount of property tax revenue toward the township will decrease by 20% and increase for the city by the same amount, until 100% of the property taxes will go toward the city.

While the city is adding new land, though, Eischens said it won't move the needle much on the percentage of taxable property. Historically, the city has had a large amount of non-taxable property, because of land used by BSU, other state facilities and health care buildings.

"The city's property value is about $1.5 billion, and our non-taxable property right now is about 46%," Eischens said. "I don't think it will have a significant impact when you add that much property value."

While the new property will generate new revenue for the city in taxes, it will also add expenses. To meet the needs of new citizens, the city is adding a new police officer, a street maintenance employee and a rental inspector, as well as a new snow plow truck.

"In addition to the employees and equipment, a bigger cost over the long run that we haven't quantified yet are the liabilities we inherit in relation to the roads," Eischens said. "In phase one and phase two, those were concerns, too. We may not have added staff, but the roads we inherited are part of the expense of annexation, it can just be harder to quantify."

"We're getting about 16 new street segments, which is about four miles of paved roads and two and a half miles of gravel roads," said Public Works Director Craig Gray. "These roads will now be added to our city system and looked at for our annual five year reconstruction plan we look at."

While the streets have been added, though, Gray said he doesn't see any new construction in the next four years.

"They likely won't be included in our 2020-2024 plan," Gray said. "We're going to be looking at them extensively this summer, though. All of them will be rated in quality and incorporated in our long term plan."

The city also isn't immediately planning to extend its water services, as much of the land is already connected.

"Many people in the annexed area are currently serviced now by water. We're up to Northwoods Landing," Mathews said. "Now, we're trying to get our water treatment plant built and our wastewater treatment plant upgraded, so we're not talking about any expansions right now."