Legislators hear concerns from Chatfield officials

GRETCHEN MENSINK LOVEJOY/CHATFIELD NEWS Taking part in the legislative forum hosted by the city of Chatfield are, from left, Chatfield Center for the Arts board President Carla Gallina, Chatfield Economic Development Authority (EDA) director Chris Giesen, Chatfield School Board member F. Mike Tuohy and City Councilor Mike Urban.
Gretchen Mensink Lovejoy

Chatfield’s City Council and administration, Chatfield Center for the Arts (CCA) representatives and the school superintendent entertained a visit from local legislators last Tuesday evening at the arts center during the city’s annual legislative forum held to keep state legislators Sen. Carla Nelson, Sen. Jeremy Miller, Rep. Nels Pierson and Rep. Greg Davids informed as to what projects the city is working on and what its legislative priorities are as the year ends.

Equitable education funding

Chatfield Superintendent Ed Harris presented information regarding the school district’s needs in relation to state funding and district enrollment. He shared an outline of the district’s 2020 legislative goals.

“A fully funded and equitable educational system is key to providing a quality education that supports Minnesota’s economic prosperity,” noted the proposal.

The district is asking the governor and the Legislature to support the following: Increase the general education basic formula by 1 percent for the 2020-2021 school year and index future increases to the general education funding formula, local optional revenue and long-term facilities maintenance revenue by at least the inflationary rate; reduce the special education cross-subsidy by at least 25 percent in each of the next four biennia beginning in 2021; make the 2019 safe schools funding ongoing, inclusive of both facilities and student programming and extend the funding to all education cooperatives and intermediate districts; allow school board renewal of all existing and future operating levies; and expand small schools revenue as proposed in House File 16/Senate File799 as “the next tier of schools not currently included still struggle financially because they still lack critical mass for economies of scale,” according to the proposal.

Harris pointed out to the senators and representatives that the Chatfield district has approximately 890 students, or 110 too few to garner enough state operating funding to adequately maintain its programming to the standards it would like to adhere.

“I tell people it’s like running a trucking company where you have to run with full-size trailers, but they’re only two-thirds full,” he said. “Our structure is not as efficient, and therefore our revenues (are not keeping pace).”

Chatfield city clerk Joel Young acknowledged that the Nov. 5 operating levy referendum that failed to garner $275 or $350 more per pupil was not reflective of the community’s willingness to support its students’ educations. There have been various school and city elections that have increased property taxes, meaning that the tax rate has gone up and some citizens may be feeling stretched. Young cited the new municipal swimming pool as one of four referendums that have passed, adding that the “community has been so supportive.”

Sen. Nelson spoke to Harris, saying, “You made reference to the point of efficiency, and that’s a really good point.”

City grant funding precedent

Chatfield Economic Development Authority (EDA) director Chris Giesen outlined in a memo what his department would like to see happen in relation to the Minnesota Department of Employment and Economic Development’s (DEED) decision to seek the return of grant funding that the city received in 2013 and has applied to redevelop property on Twiford Street, where there will soon be a new Dollar General store opening.

In 2013, the city of Chatfield was awarded a grant from the state of Minnesota to improve infrastructure in Twiford Street. Previously, the city and its EDA had acquired six parcels of land so the parcels could be assembled into one property that is large enough to host a business, and to clear the dilapidated housing from the property, according to the memo.

At the time of application for the grant, the city had secured a purchase agreement from Family Dollar to construct a store on the property. Several months later, when Family Dollar and Dollar Tree merged, the new corporation cancelled many expansion projects, including this one.

Subsequent to the Family Dollar retraction, the Cobblestone Hotel chain entered into an enforceable option and a preliminary development agreement on the property while owners attempted to assemble financing for a hotel. After they failed to do so, Dollar General and the city entered into a purchase agreement for the property, and subsequently completed the transaction.

During the course of this development, the city has spent approximately $325,000 to acquire the properties, clear the titles and improve infrastructure to the property. “The city has acted in good faith,” noted the memo.

“The city has been notified that it will no longer need to pay back the Department of Employment and Economic Development (DEED) loan once the retail store opens for business, which is appreciated,” the memo stated. “However, the city does think that the current claw-back provision, which has never been applied to another city, needs to change in order to protect other cities in the future.

“The city does not dispute the rational for some type of payback of the loan in certain circumstances, however, we do think that the current interpretation of the claw-back provision is too tight. Specifically, while the city understands that the state values the retail jobs that will be in place once the store opens, we believe the state should also recognize the value of the construction jobs that are created, which presumably pay a higher rate of pay. Furthermore, the claw-back provision needs to recognize the fact that the city cannot control events after the sale of the property is completed.

“In our case, we included language in the development agreement to assure the timely completion of the construction and opening of the store. The city respectfully requests that legislation be introduced to modify the claw-back providing in such a way that it recognizes the issues we have pointed out. In addition, in recognition of the effort put forward by the city in this case, we ask that the repayments made by the city be returned to the city.”

Nelson and Miller surmised that the precedent being set by DEED’s outgoing commissioner was actually an effort not to set a precedent, as determining that Chatfield could be excused from repaying the DEED grant – for which the language in the grant application reads that the “commissioner may” choose to require repayment within the five-year period – could set a precedent that the next commissioner would not want to uphold.

“The word ‘may’ was the cause of our frustration,” Young said. “Once we lost control of the property, we can’t cause them to go any faster. In fact, we’re still vulnerable even up until after they’ve closed on the property.”

Young and Giesen assured the legislators that the Dollar General store is set to open at or before the end of December, fully satisfying the requirements if grace is extended to the city by DEED.

“It seems to me that if you’re making progress on the project, there should be some kind of grace period,” Miller said. “I’m thinking the commissioner didn’t want to set a precedent on her way out.”

Other city matters

Giesen also told about the Minnesota Investment Fund (MIF) monies used to assist E-Z Fabricating in expanding its production line, relaying that the company had outgrown its existing facility.

Chatfield School Board member F. Mike Tuohy, attending the forum in the stead of board members who could not attend due to impending snow, concurred that E-Z Fabricating had outgrown the building originally rented from his sons and that it has grown enough that it was his understanding that it had to move back into the rented building after expansion was completed.

Conversation included the value of tax increment financing (TIF) as well as an inquiry from City Council member Mike Urban about the Safe Routes to School funding and what might come of it in the next year, particularly whether there might be any consideration for the Lonestone subdivision’s sidewalks or corners.

Giesen interjected that currently the EDA is examining streets closer to the high school.

Arts center busy

Chatfield Center for the Arts board President Carla Gallina spoke about the center’s busy calendar and its growing expenses and revenues as its programming reaches people from outside of Chatfield.

Her illustrated 2018 report showed in graphs and statistics how busy the CCA has become from its beginnings as an empty school building. The report listed that over 8,000 people attended events at the CCA, 180 children performed there, 15 artists displayed their works, 14 families celebrated life events, 12 businesses networked, and five boards convened there.

Building usage ranged from individuals and local businesses – taking up 32 percent of the usage – to regional nonprofits, the city of Chatfield, Chatfield Public Schools, CCA Potter Productions concerts, CCA Chosen Bean concerts, Wits’ End Theatre and the CCA’s own community outreach efforts.

Gallina brought to the legislators’ attention that the number of events at the CCA increased from 81 events in 2018 to 96 events in 2019. The center received a grant that allows for somebody there full-time, and another potential grant would allow the hiring of an artistic director.

“We’re really excited about where we’ve been and where we’re going,” she said.

Young contributed that the city understood that once it agreed to use the 2015 state bonding grant given for the renovation of the CCA, that changed the city’s discretion to use the building as it pleased, but that accepting that grant has made all the difference for the CCA’s future.

“We view this as a true partnership of state funding and matching funding,” he said. “We appreciate that we’ve gotten to present to the House and that the Senate stopped here on tour this fall.”

Gallina concluded, “We’re committed to keeping this building open to the public for as long as we can. The operating costs have changed, but our ability to put Potter Auditorium to work has, too.”

Discussion briefly turned toward how, even as the CCA becomes a destination, the city struggles to find capacity for people wishing to dine in town before or after events. Young acknowledged that means economic growth for Chatfield’s downtown, but also that solutions must be found to mitigate event attendees’ potential frustration at not being able to find somewhere to fill up.

The legislators agreed that one has a better time going out on the town when there’s good food awaiting.

Other issues

The city’s 2020 budget was brought to the legislators’ attention as Young updated them. He touched on the ambulance service’s funding challenges in the face of Medicare reimbursement shortages, local government aid (LGA) being returned to the level at which it stood in 2003, and thanked the state for its investment in Highway 52’s improvement this past summer, effectually spiffing up Chatfield’s Main Street.