Mitchell City Council talks about Corn Palace project with no tax hikeWith $70 million in bonding capacity, the city of Mitchell could invest a significant amount of money in an improved Corn Palace without asking for a tax increase from its residents.
By: Tom Lawrence, The Daily Republic
Mitchell could invest a significant amount of money in an improved Corn Palace without asking for a tax increase from its residents.
The city of Mitchell has more than $70 million in bonding capacity remaining. It also has an additional $1.7 million in cash on hand to be dedicated to a project such as improving the Corn Palace, the Mitchell City Council was told during a special meeting Monday night at City Hall.
Mitchell has an assessed value of $632 million, according to Finance Officer Marilyn Wilson.
The city could still borrow more than $17 million for capital improvement and other projects, Wilson explained, and could bond more than $55 million for water and other basic infrastructure projects.
Of course, the council said, it has no intention to go that far in debt, nor would it want to even approach that figure.
The City Council spent 90 minutes “deciphering,” as Council President Jeff Smith termed it, its current debt and how much money it wants to borrow for new projects, including an expanded “Next Generation” Corn Palace and possibly relocating City Hall, which now is attached to the Corn Palace.
“That number is going to be very important,” Smith said. “That’s going to be the juggling act, to see how much we can bond for.”
He said the city must determine what it can afford before any decisions are made.
“We’re not going to be able to afford everything,” Smith said.
Councilman Travis Carpenter said city leaders, with input from the public, need to set priorities for projects.
“We’re not going to be able to do three or four at a time,” Carpenter said. “Pick one and do it right.”
Councilman Mel Olson said he feels the city has done a solid job of spending money wisely while putting money aside for long-term expenses. That’s the only way to make real progress, Olson said.
“Your vision is determined by how much you have in your checkbook,” he said.
Smith said the city needs to look at how it can pay for projects with money on hand and sales tax revenue. If a business improvement district is approved, which would allow some businesses in a defined area to self-tax themselves to pay for a project, that would be fine, he said.
Smith said perhaps at some point the council could ask Mitchell residents to raise their property taxes to pay for a bigger, better Corn Palace and other additions and improvements. But that is unlikely to happen now, he said.
“That’s how we have to look at,” Smith said after the meeting.
The council noted the city has been paying off bonded debt at a good rate in recent years. Wilson said $2.5 million in bonded debt was removed in 2011, although an additional $2 million was added.
Several large projects will be paid off by 2020, Smith said.
Olson said it is worth considering that the city has set aside $1.7 million for a city arena or some project of that nature.
‘That would be available to sort of jump-start City Hall,” Olson said.
Carpenter said with tax increment financing districts taking up such a large chunk of the city’s allowable debt — more than $6 million — the council may want to consider approving fewer TIFs in coming years to devote more of its bonding capacity to the Corn Palace expansion and other projects.
While talking money, the council also heard about large-scale projects that city departments and divisions have considered. None is needed immediately, Public Works Director Tim McGannon said.
McGannon said the report was just a way to list possible major expenditures. There is no reason to think any of the projects will have to be completed or paid for soon.
McGannon said he wanted to “cheerlead” a bit for projects that have been completed in the past few years.
A $14 million Bon Homme-Yankton pipeline was completed and a rebuilt spillway project was done, he said.
“We’ve replaced every bridge in town, except for the West End Bridge in town, which will be replaced this year,” McGannon said.
The Mitchell Municipal Airport has seen a major upgrade as well, he said.
Parks and Recreation Director Dusty Rodiek said his department can also live without some of the large-scale projects it floated: up to $10 million for a new Rec Center, as well as a hockey arena expansion, estimated at $3.2 million, with some support from the Mitchell Skating and Hockey Association.
Olson said a Rec Center project might have enough popular support to gain approval from voters who would be willing to raise their taxes for that.
Rodiek said while McGannon deals with high-priority concerns, his department is devoted to the “fluff” in life. But Smith noted that the lake, recreational facilities, parks and other areas are also vital to life in Mitchell and drawing people to the city.
Public Safety Chief Lyndon Overweg said $850,000 for a ladder truck is atop his wish list, followed by $900,000 for a satellite fire station near Lake Mitchell and $500,000 for a Traffic Division building.
The Corn Palace listed two possible projects in the next few years: $200,000 for a temperature control system and $150,000 to refinish the large dome atop the building.
A $1 million upgrade of the library was also discussed, but the council said that figure was low.
Mayor Lou Sebert said all the projects have merit, but the city and its residents can “live without it” if other needs must be met. But Sebert said it was reasonable to expect at least some of the projects will come to the top and will need to be funded.
The council also heard reports on relocating City Hall and a phased-in approach to an improved Corn Palace.
The City Hall Relocation Committee, which meets weekly, has sought guidance and assistance from engineers, Tracy said, as it considers relocating City Hall to the Mitchell Public Library building.
Under that current plan, the city library would be combined with the Mitchell High School Library in a building on the current Mitchell Technical Institute north campus, after the campus is vacated as part of MTI’s consolidation south of Mitchell. But Tracy said two engineers believe the building’s 11-foot ceiling is too low and is not an ideal place for a library.
“We have not really come up with any other new locations,” Tracy said, adding that moving City Hall to an existing building may be off the table.
“We have several sites we are looking at,” he said. “None of these does the city own.”
Tracy said he didn’t want to “let the cat out of the bag” and reveal locations, since the price may then increase.
He said he has heard a lot of opposition to the idea of moving the library and putting City Hall into that building.
Smith said perhaps City Hall could be moved to the MTI building. Utilities are already in place, and relocation costs may be affordable.
“That’s a good idea,” Olson said. “I think we’re committed to moving out of this space.”
Tracy said the committee would discuss that and welcomes input from the public.
The Next Generation Corn Palace Committee continues to study proposals for an expanded building, according to committee member Hannah Walters, director of the Mitchell Convention & Visitors Bureau.
It will submit a plan — not necessarily a final plan, Walters said — at some point, that would list a gradual approach for expanding the Corn Palace. It would include costs for the projects.
She was asked by Tracy if an expansion in Corn Palace seating, part of a plan unveiled in February, is no longer under serious consideration. Many people have spoken out against that idea, both said.
“That’s a fair consensus, a fair statement,” Walters said. “It’s something that’s fallen to the bottom of the list.”
The next special meeting on the Corn Palace and other projects will be May 14.