Brainerd Public Utilities: Annexation hearing nears conclusion

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The future address of Brainerd Public Utilities hangs in the balance as attorneys representing Brainerd and Baxter argued their sides of a legal dispute that has been brewing for the better part of two years.

Although it bears the name of Brainerd, the BPU wastewater treatment facility and its offices are located on a plot of 99.5 acres on Baxter's side of the boundary. Tuesday's hearing in the Crow Wing County Land Service Building revolved around city attorneys and their attempts to unravel a complex and intertwining relationship the two cities have with the facility. BPU provides water, sewage and electricity for both Brainerd and Baxter (with the exception of some electricity coverage in Baxter), which the cities jointly pay for at a 2/1 ratio respectively and have done so for more than 30 years.

Tuesday's session was the latest in a series stemming back to Nov. 3, although the dispute dates to late 2015 and has roots in decisions going back decades. While Baxter officials have relayed their satisfaction with the current arrangement, the city of Brainerd moved to annex the property off Highland Scenic Road and incorporate it within Brainerd limits. At the time, Brainerd Mayor Ed Menk cited their motivations as a matter of "civic pride" and admitted that there was "ego involved."

And so, in Meeting Room 2, Brainerd City Attorney Joseph Langel and his Baxter counterpart, George Hoff—alongside outside legal counsel and a bevy of witnesses—presented their cases before Administrative Law Judge James LaFave, an independent arbiter based out of St. Paul, who will make final judgments on the validity of Brainerd's petition for annexation.

Brainerd

From the onset and frequently during the rest of the hearing, Langel identified the BPU site, not as a Baxter address or a disputed land claim, but explicitly as a Brainerd property. In this light, he said, the BPU annexation presents a unique case where there isn't a city trying to acquire a new property, but a city taking charge of what it already owns.

"The city of Brainerd owns all 100 acres that we're talking about here. Not only does it own it, it also owns what's on it—the wastewater treatment facility, the service center, the storage area,"
Langel said during the opening statement. "This entire facility is owned by the city of Brainerd, so the city is trying to annex its own property that contains its own facility."

Much of Brainerd's argument centered around a concept of ownership in everything but name. This is evidenced, Langel argued and witnesses—including Todd Wicklund, BPU Secretary/Finance Director, and Scott Magnuson, BPU Superintendent of Utilities—corroborated during questioning, by the purchase of the facility by the city of Brainerd in 1976, as well as multiple aspects of the facility:

• BPU is provided all of its utility needs by Brainerd, such as water for its waste treatment process.

• BPU utilizes its own storm water system

• BPU is covered by the Brainerd Fire Department.

• BPU uses no public roads.

• BPU deploys sludge trucks only on Brainerd routes.

• BPU operates outside of the city of Baxter's control.

• BPU pumps sewage from the Brainerd side of the Mississippi river.

• BPU costs or accrued debt—while Baxter pays 33 percent to Brainerd—are in Brainerd's name and the city is ultimately responsible for them in the eyes of the state.

During the hearing, Langel said there is no legitimate reason for blocking the annexation of the property as Baxter's concerns regarding access and usage are unfounded—a point he reiterated multiple times, citing the longstanding history of cooperation between the two cities, and which he pursued at length during questioning with Brainerd officials such as Finance Director Connie Hillman and City Planner Mark Ostgarden. He reaffirmed the position that prior agreements between the cities of Brainerd and Baxter, or any of the other communities dependent on BPU, will still stand.

Baxter

By placing the concerns of the Baxter community front and center—both in terms of prior complaints and fears for what expansions by Brainerd could mean for the future—Hoff focused on a number of hurdles the Brainerd petition must overcome to be considered valid. He deemed the petition should be abandoned on the grounds that it did not have all parties' best interests involved and flew in the face of 40 years of mutually beneficial and contracted agreement between the two cities.

"It has to be a petition signed by all property owners," Hoff said, expressing opposition to Langel's assertion that the BPU property is already owned by Brainerd. "What the evidence will demonstrate in this case is that Brainerd and BPU signed an agreement with Baxter in which they (Baxter) own one third of the capacity of the plant."

Hoff identified three main points of concern for Baxter regarding the loss of the BPU site to annexation.

• Annexation would mean "a loss of control" over the conditional use permit they signed in 2007; hampering their ability to have a say in the use and future developments of the BPU site, which provides services Baxter has already spent $20 million on over the decades. This would also represent a loss of revenue for the city of Baxter.

• Residences near the BPU—particularly on Berrywood Drive and Eagle Ridge Road, all located in Baxter—are susceptible to communal disturbances that come with a semi-industrial facility, such as bright lights at night, loud sirens or engines, and odors or runoff associated with the waste treatment process. Complaints have been filed by Baxter residents in the past. Annexation into a Brainerd property would pose the possibility that the concerns of Baxter residents will not be addressed properly by a municipality in another city's jurisdiction.

• There are also fears that this annexation threatens current undertakings by the city of Baxter, such as planned infrastructure, as well as signal future expansion by the city of Brainerd—a possibility, Hoff noted, that would threaten a number of zoning statutes put in place to carefully guide the growth and development of the two cities in relation to each other.

Hoff argued despite Langel's claims that Brainerd will continue to honor past agreements and community relationships in Crow Wing County, the petition for annexation itself represents a shift from this precedent on the part of Brainerd. It challenges multiple documents signed by both cities, such as the 2007 conditional use permit, the Sewer Use and Capacity agreement and a financing agreement between Baxter and Brainerd.

The next—and what is expected to be the final—session of the hearing is set to convene at 9 a.m., Thursday, at the Crow Wing County Land Services Building off Laurel Street.