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Lake Shore: Council makes budget decisions based on failed bond referendums - seek help to work better together

Echo Journal file photo.

Lake Shore will not build a new city hall in 2019, and city council members will ask the League of Minnesota Cities to help council members work more collaboratively toward goals.

The council made three key decisions at a budget workshop Wednesday, Nov. 28:

• To take $108,000 that was earmarked to pay interest on bonds out of the 2019 budget.

• To keep an extra $200,000 for road improvements in the 2019 budget.

• To welcome a League of Minnesota Cities representative to visit Lake Shore to help council members work together.

No bonds

After citizens voted in November not to allow the city to issue up to $1.595 million in general obligation bonds to pay for street reconstruction projects, and not to issue up to $1.895 million in general obligation bonds to pay for a new city hall facility, council consensus was not to include $108,000 in the budget to pay interest on those bonds that now won't be issued. Principal payments wouldn't have been due until 2020.

The council had voted 4-1, with council member John Terwilliger opposed, to issue those bonds. However, citizens submitted successful petitions to put the vote to the people, and both questions failed.

The council could have kept the interest payment money in the budget and allocated it elsewhere. And the council could still vote to fund both projects in ways that don't include use of general obligation bonds.

Road improvement funds

The council has been setting aside $50,000 a year for road improvements, and will take an additional $200,000 next year as the city tries to catch up on needed roadwork. The consensus of all four council members and the mayor was to keep that $200,000 in the budget.

Working together

Mayor Kevin Egan said the council must prioritize infrastructure needs, which include road improvements, the city hall building, the wastewater system, citywide broadband internet and solar energy. And, he said, the council needs to work together toward agreed upon solutions.

Egan cited 3-2 votes where Terwilliger and council member Wayne Anderson opposed building a new city hall. He suggested a League of Minnesota Cities representative come to the city to help council members work better together.

He said the league offers a free collaboration service to work with cities struggling with an inability to get together on issues. The process would involve the league coming and talking to council members and city staff and spending a day working through troublesome issues.

"When I see the conflict issues that we have right here ... that's often what you do - involve someone to help you work together. Otherwise the 3-2 splits continue, and I don't think the town benefits," Egan said.

Terwilliger said his experience with such help hasn't led to improvement. He said he believed the voter question to issue bonds for road improvements failed because of the city hall issue. Fellow council member Krista Knudsen said she knew people who voted for the city hall bonds and against the road bonds.

"Having someone come in to get us back on track might be good," she said.

Egan said he sensed the council would have 3-2 votes until the next election. Terwilliger said the 3-2 vote would only be on the city hall issue.

"Until we convince the public we need a city hall, I won't vote for it," he said.

Egan responded that all council members are elected to represent the community and make decisions for residents. The issue is not for residents to decide.

"We make decisions, and if the public doesn't like it, they vote us out," Egan said, noting the council could still decide to build a new city hall with other funding besides general obligation bonds, but that likely would be another 3-2 vote.

Council member Doug Miller said voters didn't understand that voting against issuing general obligation bonds for the roads and city hall projects doesn't mean the projects have to stop.

That was just a way to pay for them, he said.

"It's unfortunate it's come to this, but I think we need to give it a break," Knudsen said of finding funding for a new city hall. "Take a year and get the council back on track and then revisit issues. We should probably take the (interest) money out (of the budget)."

Egan said the council will pull interest payments for bonds out of the budget and work to come together for infrastructure needs.

"We likely will come back in a year and say we will borrow money," he said, to finance a new building or solar plan or infrastructure for broadband. "Things right now are not marching very smoothly."

Budget and levy

City Administrator Teri Hastings said she had clear direction to tweak the budget and general revenue tax levy numbers, which will be presented at the council's 7 p.m. meeting Monday, Dec. 17. The public will have a chance at that meeting to comment or ask questions about the budget and levy before the council adopts both.

The preliminary levy of $1,145,802 adopted in September will likely be reduced by $108,000.