MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL

OF THE CITY OF FOSSTON, POLK COUNTY MINNESOTA

AUGUST 26, 2013

 

Pursuant to due call and notice, a special meeting of the council of the City of Fosston, Polk County Minnesota was held in council chambers on Monday, August 26, 2013 at 7:00 p.m.

 

Mayor Offerdahl called the meeting to order with the following members present:  Veum, Carlson, Dufault and Lambert.

 

Others present:  Administrator Lucken, Laurel Skala, Wayne Omundson, Dean Vikan, Jim Mireault, Randy Landsverk, Greg Mireault, Dean DeFrang, Aaron Lenes, Warren Affeldt, Larry Lenes, Wayne Holt  and Dave Larson.

 

The purpose of the meeting was to discuss the purchase of the Fosston Golf Course.  Mayor Offerdahl stated that discussions between himself, Administrator Lucken and Greg Mireault, owner of the Golf Course since late February/early March as to whether the City would be interested in purchasing the property.  Offerdahl is open to the city perhaps owning the property and working with an association that would run the golf course.  Randy Landsverk spearheaded that and got a lot of people together to purchase shares and form an association.  More money was raised than deemed necessary and the Mayor believes shows a strong support from the community of the importance of keeping a golf course in the community.  The Mayor believes that Fosston’s golf course is another selling point for the city along with the other amenities we have and is part of the reason we are seeing business expansions as well as new businesses in our community.  Consolidated Equipment Group is one of those.

 

We need to discuss how the city can be part of retaining the golf course as one of its amenities.  However, if the golf course does not succeed it’s important that the city own the property for whatever it would deem necessary for other development.  The purchase of the real estate will be achieved using existing assets – not bonding.  The intent is to make the purchase without impacting the taxpayers.

 

The mayor will now take comments from the council and then we will discuss the difference between the real estate price, what the seller will take for the purchase and what the city can cover as the gap.  The assessed value effective for taxes payable for 2014 is $239,000.  Lambert thinks we need to work diligently to keep a golf course in Fosston.  It is difficult to put a price above the assessed value which is easy to justify; it it’s above then we need more discussion.  Veum is upset that Greg’s price is at $350,000 and is firm.  He would like to see Mireault pursue other options besides the city buying.  He believes there is blue sky on this and he would go for assessed value.  Dufault asked where the money for this purchase will come from and if they are set aside.  Are there infrastructure projects within the city that this money is earmarked for?  Lucken informed Dufault that there are reserves in Light & Power and funds are not earmarked.  Carlson thinks maybe we should take a poll from the community to see what they think.  Also, he wondered how many in the association pay taxes here.  When there is a subject so concerning it’s important that you get an understanding from the public.  Offerdahl thinks he has gotten the pulse of the community.

 

Further lengthy discussion continued and included what the associations role in this will be, who will own the equipment, who is responsible for the insurance, if city’s price does not meet Mireaults then will the association enter into an agreement with the city to fill that gap; what about an appraisal.

 

The number for the gap that was used before is $50,000.  Is the golf association ready to commit to that?  What can we accomplish tonight?  Maybe vote on what the city would be willing to pay for the real estate portion of this and the golf association to meet and see what they come back with as their gap pricing.

 

Randy Landsverk offered the following information to the council:

Ø  Operation of the golf course is contingent upon the City owning the property.

Ø  The sole purpose of this association is to operate the course and not be part of the purchase agreement.

Ø  The purchase is between the City and Mireault.  If there is a gap the association would have to bring it to a vote.

Ø  The association wants to keep its capital for equipment upgrades and to maintain and improve the property.

 

After further lengthy discussion the council began discussing numbers for the purchase.  Cost per acre was discussed as well as the value to the land tillable, underwater, etc.  Value of the buildings that are on the property, the club house and the equipment was also discussed.  Mireault has placed a value of $40,000 on the equipment.  Veum thinks it’s overpriced and repairs are expensive.  The association has $5,000 for annual repair and maintenance built into its plan.  Further discussion continued and values placed as follows:  $160,000 land; $125,000 clubhouse and four acres; $40,000 equipment for a total of $325,000.00.  The mayor then asked council members for comments.  Dufault – should we offer with contingencies – at $325,000 or $350,000 – would $25,000 make or break the city – make an offer.  Carlson would like to see more hunger from the association.  If it’s at $325,000 then have them come up with $25,000.  Lambert stated the value of the golf course fits with the civic center and library.  He’s comfortable with $325,000.  Veum would like to see Mireault get an offer from someone who wants to own and run a golf course and renegotiate again or $280,000 is the maximum he feels the city should pay.

 

Mireault will consider an offer of $325,000. 

 

Motion was made by Veum to offer $280,000 for the golf course property.  They mayor called for a second.  Motion died for lack of a second.

 

Motion was made by Dufault to offer $325,000 for the golf course property with the association committing to running the golf course.  Lambert seconded the motion.  Discussion:  Veum does not know why we need to come up in price.  He believes the price is outrageous.  Lambert agrees it’s a risk but what is it worth to the community.  Carlson prefers that it remain a golf course.  The Mayor then called for the vote.  Those voting in favor of offering $325,000 for the golf course property:  Dufault, Lambert, Carlson and Offerdahl.  Voting against:  Veum.  Motion carried.

 

There being no further business to come before the council, motion was made by Carlson seconded by Dufault to adjourn.

 

                                                                                                                ____________________________
                                                                                                                Charles Lucken, City Administrator