The Mitchell City Council mapped out a lengthy list of goals on Monday in hopes of spurring more growth and moving the city in the right direction.
Among the notable goals the council identified during the work session meeting were advancing the restoration of Lake Mitchell, improving infrastructure and city facilities, expanding the Corn Palace’s seating and revitalizing downtown Mitchell.
“We have been able to accomplish some major projects over the past several years, but I think it’s important that we are having this session with the number of big projects we are either in the process of doing or needing to get started,” said Councilman Jeff Smith, pointing to the wetland project and dredging the lake. “But I hope this will help us identify areas where we can advance the community and still live within our means."
With the ongoing algae woes that have been hampering Lake Mitchell for several decades, the restoration projects were a focal point of the discussion. While there's been mixed support for dredging the lake as a potential solution to improve the water quality, it appears the council is collectively on board with a dredging project. However, Mitchell Mayor Bob Everson said an actual cost to dredge the lake must be figured out to advance the project.
As of now, the city has $100,000 budgeted for preliminary dredging designs. Everson requested to raise that budgeted amount to $350,000. City Administrator Stephanie Ellwein said the $350,000 budget would cover the costs to receive a preliminary dredging design, which opens up funding opportunities for the city.
“It would get us to a point so that we could start seeking funding from the DENR and through grants, and if we need to go out and have some kind of a financing project that we take to the public,” Ellwein said.
While rough estimates to dredge the lake have been tossed around in previous years, Everson emphasized there has yet to be a true cost determined for a dredging project. Based on the recent dredging proposals, Everson guesses the cost hovers around $15 million.
“This would get us to the point where we know the cost, so we can start looking for funding,” Everson said. “We have some ideas to help fund the project if it comes out to be much more than we expected, and falls beyond our means... Some of those ideas would likely come to a public vote, which will be discussed at a later date. But we feel we are getting a good grip on the lake.”
Of the three engineering firms that recently pitched dredging proposals to the city, Everson hinted that Barr Engineering was the likely candidate. In less than a month, the city will be propose tabbing Barr Engineering to drum up the preliminary dredging design that's expected to determine the actual cost of the project.
Considering the city currently has $3.8 million available funds from the federal government’s CARES Act COVID-19 relief money, Councilman Dan Allen suggested earmarking most of that money to help fund a future dredging project. The council agreed to allocate $500,000 of the available CARES Act money to replace the air compressors at the Mitchell Activities Center, bringing the amount available to $3.3 million.
“We still have $3.3 million left in the CARES Act, and we don’t need to spend that on anything right now. So why don’t we keep that money for the dredging project,” Allen asked. “That seems like an obvious business move to me.”
With the wetland project that’s inching closer to breaking ground near the lake, the city’s been focusing on working upstream along Firesteel Creek. After all, roughly half of the phosphorus that’s a root cause of the lake's algae blooms is flowing into the body of water from Firesteel Creek.
For Council President Kevin McCardle, dredging the lake shouldn’t be a major focus until the wetland project is completed. According to Everson, the wetland that’s intended to filter out the phosphorus and sediment flowing toward the lake via Firesteel Creek is expected to break ground by this summer. Everson noted Ducks Unlimited is close to finishing the wetland design.
“The lake is definitely a high priority, but it doesn't make any sense to dredge the lake if you don't have the water that’s coming in it cleaned up,” McCardle said.
Goals to grow Mitchell's economy, tax revenue
With the decline in commercial and residential building permits, paired with the 10-year flat rate of growth in sales tax revenue, the council pitched some ideas to help spur more economic growth. To aid the discussion, Ellwein provided an update on the city’s financial picture and budget.
The city ended 2020 with $11.2 in sales tax revenue, marking a decrease of just 0.5% from the previous year's pre-COVID-19 era. Considering the economic downturn that was brought on by the pandemic in 2020, it’s clear COVID-19 hasn’t impacted Mitchell’s economy as severely as other cities across the country.
One area of the city's sales tax revenue that suffered the most during the pandemic was the entertainment tax, which primarily includes event ticket sales, hotel and dining. The 9.4% drop in entertainment tax revenue in 2020, which generated roughly $755,000, has McCardle eager to expand the Corn Palace and add more seating options.
"If we can find a feasible way to expand the Corn Palace seating, it will open us up to host state tournaments like darts and other sporting events. That would bring in a whole lot more tax revenue that we need to grow," McCardle said.
While the city’s first- and second-penny sales tax revenue has been increasing at an annual rate of roughly 2% throughout the past decade, Ellwein said the rate of growth is 1% less than other cities similar in size.
Ellwein pointed to the recent voter-approved medical and recreational marijuana amendments that would legalize the sale of cannabis in the state as a potential way to spur more sales tax revenue in the city. While the state Legislature succeeded in rolling out medical marijuana, which will begin in July, recreational marijuana is in limbo after Gov. Kristi Noem used the courts to block the voter-approved amendment.
“We are told that medical and recreational marijunana would both come with sales tax for the city, so as trends like this emerge, we don’t want to lose out on that opportunity to see growth in our community,” Ellwein said. “We can do it in a thoughtful manner, and there are not many opportunities for cities to see new revenue.”
Everson said the city has been taking “proactive steps” to welcome the medical marijuana program in Mitchell.
Mitchell saw a significant decrease in building permits issued over the past several years. At the most recent peak, in 2015, there were 34 residential building permits and 18 commercial permits issued in the city, equating to a $44.6 million in valuation.
However, in 2018, there were just 20 residential building permits and two commercial permits issued, dropping the valuation to $15 million. Despite the pandemic, building permits rebounded in 2020, as there were 17 residential permits and 11 commercial permits issued, amounting to $25 million in valuation.
Council member Steve Rice is looking to the city, Mitchell Area Development Corporation and Chamber of Commerce for potential ideas to help bring more job growth and tax revenue, as that’s a major part of the nonprofit organizations role.
"I like the idea of remodeling the interior of the Corn Palace, but from the business and housing standpoint, 100 jobs is worth more than 100,000 tourists," Rice said. "We are geographically located in a great area, but how can we leverage that even more. Maybe we see how the new hire of the (Chamber and Mitchell Development Corporation) CEO will help."
Revitalizing downtown, maintaining city facilities
For council member Susan Tjarks, revitalizing Main Street and improving the aging infrastructure in downtown Mitchell is a key goal she said the council has been “putting off.”
“It was found in the Forward 2040 process that Main Street was one of the things we have going against us that could be a major thing going for us if we work on improving it. I think we need to make sure we are not losing sight of that, because we have kept putting it off,” Tjarks said.
McCardle also pointed to replacing the air compressors at the Mitchell Activities Center as an immediate goal that the council needs to prioritize before next winter hits. According to Parks and Recreation Nathan Powell, the yearly repair work that’s needed for the air compressors to properly function has climbed to roughly $30,000.
“The longer we wait to fix this, the more money we will have to spend to keep it running, so it should be a goal we address right away,” McCardle said, noting the air compressor replacement is estimated to cost $500,000.