NORTH MANKATO — Following public hearings at Monday’s Port Authority and City Council meetings, the council voted to approve an ordinance authorizing the Port Authority to issue up to $27 million in bonds to help finance construction of a new public works facility on Timm Road.
The ordinance allows the Port Authority to issue general obligation bonds, backed by the “full faith, credit and resources” of the City of North Mankato, to secure funds for the project as needed, according to city documents.
During the council meeting, Tammy Omdal of Northland Securities explained that the Port Authority cannot independently issue general obligation bonds without council authorization. She stressed the approval of the ordinance gives the Port Authority the option to move forward with issuing bonds up to the $27 million maximum, subject to council oversight as the financing process continues.
Preliminary plans of the facility call for a roughly 49,500-square-foot facility consolidating public works operations into a single campus, with vehicle storage, maintenance areas, offices and integrated geothermal and solar systems. The project’s cost estimate remains about $24.4 million, with a planned service life of approximately 50 years and capacity for future expansion.
Also conferenced into the meeting was Mary Ippel of Taft Law Firm, who outlined the legal framework supporting the action, noting that Minnesota law grants port authorities broad authority to establish industrial development districts and finance public facilities following notice and a public hearing.
During the public hearing, residents raised concerns about taxpayer impacts and whether alternatives to a new facility had been fully explored. The city clarified that Port Authority and city issuance do not make any difference on the impact on the taxpayer.
Some questioned whether rehabilitation of the existing public works site or other properties could reduce costs.
Resident Lucy Lowry expressed her feeling that the city was merely “skirting around” a vote by North Mankato residents and Tom Hagen said there appeared to be “little effort” to look at any other solutions.
“Families have to live within their means. Cities must do the same,” Hagen said.
Ippel said the proposed public works facility will be owned and operated by the City of North Mankato, not the Port Authority, and will not be leased. The Port Authority’s role is limited to serving as the “financing vehicle.”
The city could alternatively issue capital improvement bonds on its own, but those would count against the city’s net debt limit and be subject to a reverse referendum, Ippel said. Bonds issued through the Port Authority do not count against the city’s net debt and are not subject to a referendum.
At a previous council meeting Public Works Director Luke Arnold said the city’s current public works site on Webster Avenue site was ruled out for redevelopment following environmental investigations by the Minnesota Pollution Control Agency.
The Timm Road site was identified as the only location that adequately met evaluation criteria including size, availability, cost, suitability and alignment with long-term city plans. The only council member to vote against the issue was Billy Steiner, who expressed his disagreement with the chosen site.
“I believe this council does their due diligence, does ask extra questions to the city staff, double checks and makes sure things are checking all the boxes,” Mayor Scott Carlson said just before voting. “…We are not pushing something without citizen votes. If you totally disapprove of this, and I know there’s a few in here that are adamantly against it, at least in many respects. I would probably expect to see a rally for people to vote against it.”