Range councils start 2018 with new faces

Biwabik City Councilors (from front left): David Ekern, Mayor Jim Weikum, Curtis Andrews. Back row: Jon Eng and Peter Senarighi.

BIWABIK — Tuesday night, at the Biwabik Park Pavilion, the Biwabik City Council held a public hearing about the proposed assessments following the city-wide reconstruction project.

Before the meeting, property owners had the opportunity to submit a letter stating an objection of their assessment to City Administrator Jeff Jacobson. Twenty letters were received before the meeting and included in the council’s packet. More letters were submitted to the council at the meeting and will be entered in the public record.

The objection letters ranged in reasoning from no or little market value increase to property to poor quality of work.

“We along with other citizens have been researching and have read that a special assessment cannot exceed the amount by which the property benefits from the improvements as measured by the increase in the market value of the land due to the improvement,” stated Todd and Kimberly Berg’s letter of objection.

In many of the submitted letters, homeowners identified the recent purchase price of their property, current property tax statement's taxable market value and how that compared to the special assessment.

“I purchased my home in July of 2001 for $25,000,” stated Jolene Goodman in a letter. “According to my 2019 property tax statement, the current taxable market value of this property is $21,540.00 (documentation is attached). The letters that I received regarding the street assessment indicates that the special assessment will increase my taxes in the amount of $11,299.98 for 35 feet of avenue and 160 feet of alley. I am grateful that these improvements were done. However, I don’t see how it is possible that my tax assessments over the next 20 years are more than half the value of my 100 plus year old home. Due to the age of the home on my property, there is no way that the work that was done to the avenue and alleys surrounding my property increase the market value of my home by over $11,000.”

Goodman’s letter, as well as others, state that they are grateful for the improvements but object to the amount they are assessed.

Joseph Gregorich explains this in his letter: “According to the Special Assessments Toolkit from the Minnesota League of Cities, assessments are valid if ‘The assessment does not exceed the special benefit measured by the increase in market value due to the improvement.’ The Toolkit also states that ‘A special assessment that exceeds the special benefit is a taking of property without fair compensation and violates both the Fourteenth Amendment of the United States Constitution and the Minnesota Constitution.’ My main reason for objecting is that my total preliminary assessment is greater than $9,500, but there is no evidence that the market value of my property will increase by that amount.”

In other letters, the quality of the work was addressed as another reason for objection.

“The quality of the work was below par. Seriously, there are low areas causing large bodies of water standing everywhere. One corner of our driveway is absolutely mush and we will be adding fill to that area for years,” states a letter submitted by David and Kimberlie Grippe. “We feel our property was actually harmed by the so-called improvements, due to the condition of the driveway.”

The proposed assessment rates are substantial and could overburden many homeowners.

“I also feel that the citizens of the City of Biwabik were not provided with accurate information regarding the cost of this project projected directly on Biwabik residents,” said Robert Olson in his letter. “There are numerous residents that likely would have objected to the project due to financial hardship that it would inflict on them directly.”

A packed house

The room at the Biwabik Park Pavilion was full by 6 p.m. with only a few folding chairs open in the front rows.

Three members of the Biwabik City Council were in attendance at the special meeting including Mayor JIm Weikum, Councilors Mindy Mackey and Steve Bradach.

The city started the public meeting with a slideshow of photos reviewing the city-wide infrastructure improvements.

“This is a required hearing of the special assessment,” said Weikum starting the meeting. “We have accepted letters and will hear testimonies tonight. You are citizens of this community and have a right to be heard.” The next Biwabik City Council is scheduled for 6 p.m. Monday, Nov. 4, when this discussion will be continued by the council. City engineers were on hand from SEH to answer questions about specifics of the project.

“These numbers are not final,” Weikum said. “Until the last minute — Nov. 15 — we are continuing to look for more money.” Nov. 15 is the deadline for the city to submit final assessment figures to St. Louis County.

Jacobson, the city administrator, lead the presentation reviewing the project. “This was a four phase project. We first broke ground in 2016.”

City-wide improvements included: replaced sanitary sewer (12,983 feet), replaced water mains (17,160 feet), replace storm sewer (6,443 feet), replaced curb and gutter (22,986 feet), replaced street pavement (2.33 miles) and replaced alley pavement (3.45 miles).

“There is more funding out there for utility work than there is for surface work- and by that I mean there is no funding for surface work,” said Jacobson explaining the funding the city did receive.

Before and after photos were shown of each phase.

Early on in the presentation, conversation sparked over the road by Robby Peyla’s house on the south side of town.

Before the project, it is reported that the road was average size. After the project, the road is now narrower. The SEH spokesperson did say the road is currently wide enough for two vehicles to pass but there is no space for parking.

“That is a good example,” explained Weikum, “that when a street is so narrow it is because the city doesn’t own that land,”

Although Peyla offered to give part of his land to the city, this would not have been a solution for the whole road. The narrower streets were re-named an alley during the planning process.

“I don’t have a street, yet my alley is wider,” commented Peyla, looking at the brighter side.

The alleys were designed to the same specification as the roads. The expectation is that trash trucks will not cause divots in the alleys, as had been a common issue before the reconstruction.

“If you have issues with the quality of work, problems, we will work with the city engineer to assess properties and work to address them.” Weikum.

As Jacobson and Weikum explained to the crowd, this meeting concerned the dollar amount of proposed assessments. Issues with workmanship should be brought to their attention at city hall.

“There is a connection between seeing the bill and not like the work that was done...but this meeting is about the bill and dollars,” Jacobson said.

The equation of the division of cost between property owner and city was brought into question.

At the Jan. 4, 2016 Biwabik City Council meeting, the council approved the special assessment policy which changed how repairs are paid. In the past, updates had been partly charged to the property owner and partly charged to the city. The city’s portion is then added to the city’s levy and property tax. In 2016, this was changed so that now all the project’s improvements are charged to the homeowner, directly.

Council members agreed that this change will be looked into at future meetings.

“You have the right to appeal the assessment,” explained Jacobson when questions of higher assessments than property value came into the conversation.

From the back of the room, a concerned property owner spoke up, saying: “I just had $3,000 thrown in my face — I can’t afford that.”

Conversation circled back to the way the streets had been before the project started.

“There was sticker shock,” said Kim Saari, addressing the previous speaker. “You said $3,000 — ours is $16,000 because we bought [an end lot] space for a garage. The streets without this project would have all caved in,” she said talking about crumbling infrastructure. “Now, it isn’t. We need to relax a little bit and let the process happen. The city streets were falling apart and needed to be done.”

“Why did the city wait so long to fix the streets?” asked a resident from the back of the room.

“The easy answer is to save money,” said Jacobson. Although money was immediately saved by past councils, the increasing deterioration of the infrastructure passed the cost onto the present citizens.

Future Steps

The council will address these concerns during the Nov. 4 city council meeting and has until Nov. 15 to certify and send the special assessment to St. Louis County.

“Once the council sets the final number,” Weikum said, “you have 30 days from then to pay off the final amount, in total, without interest.”

Homeowners have the personal decision to pay the special assessment in full or over 20 years. Interest will accrue after the initial 30 days at 3.75 percent.

“Once these assessments are finalized, that is what they will be,” said Weikum.

The assessment belongs to the property, not the property owner. If the homeowner chooses to pay the assessment over 20 years, and sell after 10 years, the remainder will likely be passed onto the next property owner.

A question was asked, how can it be guaranteed that a home value will increase by the amount of the property’s assessment.

“There is no guarantee,” said Larry Minton, the city’s attorney.

“Not a dollar for dollar increase but the value of your house will go down if the streets or utilities do not get fixed,” Bradach explained.

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