Mr. Bates also asked for an explanation of the Financial Management Plan for Utility Funds discussion that occurred on November 4, 2024.  Mayor Droba stated Utility Funds are intended as a guide for fiscal management of water, sewer, and storm water systems for the city.  The funds could be utilized to do work on the water treatment plant also.  City Administrator Bergstrom stated the Utility Fund report shows what water, sewer, and storm sewer rates should be to have sufficient funds to support each utility fund over the next 10 years. Further noting these funds are not levy dollars.

APPROVED as presented

• Curb Appeal Lawn Care – snowplow license
• Dairyland Operations dba Dunkin & Baskin Robbins – restaurant license
• Dollar Tree Stores Inc dba Dollar Tree #3694 – fireworks license
• D & S Pizza Inc dba Domino’s Pizza – restaurant license
• Kennedy’s City Cab and Transport LLC – taxi license
• Lar’s Lumber and Plowing – snowplow license
• Sarah Nevalainen – Massage Therapy LLC – massage individual license
• Steve Boyum Construction – snowplow license

Motion seconded by Councilor Kalar and carried unanimously.

APPROVED Year 2025 license renewals that may include tobacco and/or liquor applications, as presented

• CAPL Retail LLC dba Joe’s Kwik Marts (1709 2nd Avenue) – 3.2 off sale license, cigarette license, gasoline pumps and restaurant license
• CAPL Retail LLC dba Joe’s Kwik Marts (301 4th Street) – cigarette license, fireworks license, gasoline pumps license, restaurant license and 3.2 off sale license
• Edward’s Oil Inc dba Little Brown Jug – cigarette license and off sale license
• On the Rocks LLC – on sale liquor license, Sunday liquor license, restaurant license, juke box license, pool table license and off sale liquor license
• Timber Pins Bowling Center – on sale liquor license, restaurant license, bowling alley license, pool table license and Sunday liquor license

Motion seconded by Councilor Holden and carried unanimously.

1. APPROVED purchase of a Virnig HSBP120 Hydraulic Snow Blade/Pusher

1. Discussion on the Facility Condition Assessment & Strategic Facility Planning Study

• Early 2022, Mayor Droba, City Administrator Bergstrom and Councilor Krause met with Koochiching County regarding their plan to move forward with the new jail. The city inquired what the cost would be to lease space as they currently did at that time.
• October 18, 2022, a meeting was held with Kent Koerbitz, Program Manager of the jail project. The city was informed that up-front costs would be required from the city in the amount of $819,100. Additionally, 11% of soft costs and 12% of remodel costs (both unknown amounts at this time) would need to be paid by the city. Mayor Droba noted the city had already finalized the budget for 2023 and there would be no way to come up with the $819,100 that was being requested by the county.
• December 30, 2022, a letter was received from the county chair advising of an increase to the lease agreement.
• February 22, 2023, the city needed to decide if they were willing to go from an annual lease payment of $75,000/year to $112,884/year for 2024/2025, along with committing to a long-term agreement for 18 years without knowing the annual lease amount.
• The city reached out to Backus about options to lease the space that Northland Counseling Center would be vacating for the police department.  The PD could move into Backus for $75,000 a year noting it would be temporary until a long-term solution was determined.
• June 2023 the PD moved into Backus.
• Over the past year the city sold the property at 2232 2nd Avenue East to Kootasca for $1.00.  Kootasca later determined the building did not meet their needs and they moved into Backus in 2024. The assumption of the city was that we would buy the building back for $1.00. Initially Kootasca wanted $20,000 for the building.  The city counteroffered at $5,000 to assist them with moving costs.
• Building Official Meyers along with Councilors Buller and Holden did a walkthrough of the Kootasca building to determine if it could meet the needs of the police department moving forward. It was agreed upon that the building was is rough shape but could meet the requirements for a police department and would be worth paying $5000 to purchase the building.
• Kraus-Anderson was contacted to do a Facility Condition Assessment & Strategic Facility Planning Study.
• The Facilities Assessment Summary showed the current building was in poor condition.  To renovate the current space to a police department would cost $4.6 million.  A new police department would cost between $35 million to $40 million.

Councilor Wegner stated he was not if favor of increasing the levy to complete the renovations of the building.

Councilor Kalar stated that the city never said they were not interested in working with the county.  Kalar requested City Administrator Bergstrom to reach out to the county to see what options were available for the PD to be located at the county.  Kalar noted in the last two years the city had saved $75,000 moving from the Law Enforcement Center to Backus. The county had increased the rent almost $42,000. Councilor Kalar stated he worked in the Law Enforcement Center building for almost 32 years and that building needs a lot of work as well.

Chief Kostiuk spoke that he is most concerned with operations and functions of the police department. Their job is to serve the citizens and do what is most fiscally responsible. Operational costs remained the same. Chief Kostiuk indicated that all costs associated with the move to Backus have been tracked.  Citizens ask why the PD cannot remain in Backus. Simply put, Backus is not made to house a police department. As a city, we need to get better at conveying the message to citizens to what we want versus what they think they are getting.  Location was a common concern with citizens, Chief Kostiuk stated that location was not as relevant of an issue as it used to be. Officers are much more mobile at this point and due to the size of the city, any location would not make that big of a difference.

Erik Strand, 1831 4th Avenue East addressed Mayor and Council about the non-disclosed plans. Strand spoke of the petition he had signed and advised each resident he spoke with had concerns. Strand commented that the county was mandated to build the new jail. Strand made sure to mention that they appreciate all Law Enforcement Officers. Mayor Droba addressed Strand’s comment with the residents being concerned with a PD going on 2nd Avenue East. Droba said he would love a Police Department in his neighborhood. Strand spoke of the 200 x 433 ft of land locked by KEDA around the Kootasca building. Although the Kootasca building was zoned public, KEDA owns the land surrounding that building. “With the current stresses with the airport commission, what is the likelihood that the county representation on KEDA would agree to the city purchasing the land?” Strand asked. Further, Strand stated at the end of the day Mayor and Council are the fudiciary for the citizens and it is your job to manage taxpayers’ dollars for the taxpayers. Strand asked if a request had been made to KEDA for the purchase of any adjacent land. Mayor Droba did not see there being an issue with the city being able to purchase their own property for $1.00. But no official request had been made.

Lois Lundin, 2222 3rd Avenue East thanked officers and stressed that there was no issue with the quality of service provided and this was all a financial issue. Lundin asked that if the renovation is to come from existing police department budget with no additional levy, how?  Councilor Kalar commented that he would not be agreeing to a $4.6 million upgrade. Mayor Droba responded that the PD used to pay the county $75,000 a year and now those funds go towards the leased space at Backus.  There are additional funds set aside and conversations need to be had. The jail project was expected to be half the cost it currently is. Lundin shared that she felt the people of International Falls would appreciate if the city was serious about going back to the county. Perhaps someone could help facilitate the conversation between city and county to make it productive. Lundin shared that 24.7% of people in International Falls are 65 and over, and 15% of the city’s population live in poverty. The social security increase for 2025 is only 2.5%.  Lundin stresses that the city cannot continue to spend money they do not have.  Mayor Droba acknowledged that and stated it was also a council concern.

Lundin addressed the concern for citizens possibly paying on an empty building plus a new police department. “We need to fill the buildings we have.”  She then requested that this matter be tabled until the new Mayor was in place as this was a decision Mayor-Elect Drake Dill should be a part of.

Tyler Weir, 1201 2nd Avenue East asked if the 1% sales tax for roadways would be utilized for the Kerry Park project. Mayor Droba replied no. Droba informed that when the 1% sales tax was put into place, the city had to list every road/street that the money could be utilized for with street improvements and sewer projects. The road directly in front of Kerry Park was one of those roads, so that money could be used for that portion. Weir requested to know how much it cost the police department to move to Backus. Chief Kostiuk indicated that the cost was approximately $32,000 and non-recoverable costs such as permanent changes of windows and glass were about $2000. The IT and Tech part of the move was free of charge due to the PD being a member of MNIT.

Sheryl Christiansen, 604 6th Street wanted to ensure that the levy would not be increased due to any move by the police department.  She inquired about the term of the loan and asked how 15 years from now the Mayor and Council could guarantee that would not happen due the decreasing tax base. Mayor Droba corrected Sheryl and indicated that the tax base had increased in International Falls due to new businesses. Mayor Droba made it clear that this would not be a quick decision and the goal is to have a location for the police department.

Heather Klemetsen, 5907 Town Road 238, Littlefork, MN commented that she appreciated the due diligence the Mayor, Council and staff have taken to invest in the future.  Klemetsen hopes her children will not want to leave the community when they graduate.  Klemetsen stressed the need to invest in our community and that included the police department and ambulance.

Councilor Kalar would like more discussions with the county to discuss options for the police department.  City Administrator Bergstrom advised that they have reached out to the city’s financial adviser at Northland Securities requesting updated debt service information using current lease amounts and capital funding of approximately $100,000 to work backwards towards the amount of funding available.

The International Falls Police Department Activity Report for October 2024 was available for review along with the October 2024 Fire/Rescue/EMS Activity Report.