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Pequot Lakes: City looking at estimated $3.5 million bond

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Two residents spoke in favor of the city's plans to expand Trailside Park, two people continued to ask questions about the proposal and its associated costs, and one person said she favors the park plan but fears the repercussions of ripping up a portion of Patriot Avenue.

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Money would fund two projects: Streets around Trailside Park and park project

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Those comments all came as the city council heard presentations Monday, July 9, that add up to a possible $3.5 million tax abatement bond for two city projects - a streets and utilities project for the roads around Trailside Park, and the master plan to expand that park across a portion of Patriot Avenue (the former two-lane Highway 371) and add amenities.

In the end, the council voted 3-1 to advertise for bids for the road and utility improvement project for the sake of determining exact costs. Until it opens bids, the city can only deal with estimates.

City engineer Tim Houle, with Widseth Smith Nolting engineering firm, estimated the road and utility project at $1,054,550, but reiterated: "You really don't know the price til you bid the project."

Council member Jerry Akerson voted against seeking bids.

"I think we are moving way too fast and I want to slow this down," he said of the roads and park projects, saying he wants to figure out what damage could result from removing a portion of Patriot Avenue. "I'm completely against it."

Mayor Nancy Adams and council members Randy Loukota and Mimi Swanson voted to seek bids. Loukota said his "yes" vote was so the city could get real numbers before making a final decision. Council member Scott Pederson was absent from the July 9 meeting.

Proposed road and utility improvements would be made to the parts of the roads surrounding Trailside Park: North Front Street, East Sibley Street, Government Drive, Main Street and Patriot Avenue.

Bid openings will occur at 10 a.m. Friday, Aug. 3, at Pequot Lakes City Hall. The council can then make a final decision at its Tuesday, Aug. 7, council meeting. If a bid were approved, the plan would be to start road and utility work as soon as possible after Labor Day. That work would include closing Patriot Avenue between Main and Sibley streets.

Trailside Park bids

Luke Sydow, a landscape architect with SAS+Associates in Duluth, shared budget estimates for phase one of the Trailside Park project that totaled $2,598,060.

Again, costs are only estimates until true bids are submitted, and Sydow said estimates were on the high side. Adams agreed, pointing out estimates of $1,500 per park bench and indicating the city would not spend nearly that much money on a bench.

The idea is to seek bids at the end of this construction year to get the best prices, and to start park improvements in 2019.

The council agreed not to hold a required public hearing on the proposed bond amount for the park project until it has firmer costs.

Financing

Jason Murray, with David Drown Associates-public finance advisers, recommended the city issue $3.5 million in bonds over 20 years based on projected cost estimates, which he said are a "snapshot in time" and which he hopes are high. He explained tax abatement bonds as a pledge of the city portion of property taxes as payment of bonds. In reality, he said, when the city budgets, it levies across all parcels.

Murray said the tax impact from the streets and park projects could be a 13-percent increase in the levy to cover the total debt. And the city must consider the maintenance facility it is building as well. Paying back the total debt would result in a 10-point increase in the city's tax rate.

As an example, Murray said a home valued at $200,000 could see a $200 per year increase in taxes.

Comments

"We were elected to look to the future of this town and I really do believe that's our role up here," Adams said. "We have to look 10 years down line."

Ray Smith, a 40-year resident, said the council's plan to improve Trailside Park will benefit all residents.

"Everyone that lives in this community will at some point use it. If you are a business person, understand this will increase your business dramatically over time," he said.

Dan Ronning, park commission member, echoed Smith's remarks.

"I've been in the retail business for 44 years. I know what drives retail is amenities in a community. It really drives business," he said, advising people to be patient and wait for bids to get true costs.

Michelle Lelwica, owner of Snap Fitness and Hopkins Health & Wellness, and resident Donna Walden continued to ask the council questions about the park project. Lelwica asked if the park is such a good idea, wouldn't it be appropriate for people to voice their opinion and vote on the project.

Lisa Kaneski, owner of Dairy Queen, said she loves the park but is terrified to lose a portion of Patriot Avenue, a thoroughfare through the community. She asked if the council could redesign Trailside Park without expanding across Patriot Avenue.

The council also authorized paying $40,000 to Minnesota Power to bury overhead power lines as part of the Trailside Park project.