GC recommending approval of Vista pre-annex agreement

By LeAnn R. Ralph

GLENWOOD CITY — The Glenwood City Council’s Committee of the Whole is recommending that the city council approve the pre-annexation agreement with Vista Sand for a 400-acre mine directly south of Glenwood City.

The committee of the whole, which includes all of the city council members and the mayor, met Monday night to take public comment on the pre-annexation agreement, to meet in closed session to discuss the agreement and to negotiate with representatives of Vista Sand.

About 15 people attended the meeting at the Glenwood City Community Center.

Jeanne Jeske said in addition to concerns about water wells in Downing, the city council should be concerned about wells west of the proposed sand mine.

The city council should also be concerned about property value guarantees for those properties, she said.

So far, her property value has already gone down $57,000, Jeske said.

She did not give a time frame for the property value decrease as to whether it had occurred in the last month, the last year or the last several years.

Jeske said air quality was a concern for her as well.

Scott Teigen, who owns land where the sand mine would be situated, said he was looking forward to the mine employing 40 to 50 people currently commuting to the Twin Cities for work.

The sand mine will allow them to be at home more so they can attend their children’s sporting events at school, he said.

Anders Helquist, an attorney for Vista Sand with Weld, Riley, Prenn and Ricci, said that the Jeske property and other properties west of the proposed sand mine were part of the property value guarantee.

The property value guarantees are not being done behind closed doors, and Vista is not going door-to-door to offer the guarantees, so that is why Jeske does not yet know about the property value guarantee, Helquist said.

Two years ago when Vista Sand was proposing to build a sand loading facility in Dunn County near Knapp, property owners in the area said Vista representatives had offered them “hush money” to not voice their opposition to the facility.

Proposed changes

Vista has accepted all of the city council’s proposed changes to the pre-annexation agreement, Helquist said.

The Glenwood City Council met in closed session one week earlier to discuss the proposed changes.

Helquist said Vista was proposing a royalty payment to the city of two cents per ton of sand and was proposing to allow trucking of the sand from 6 a.m. to 6 p.m. every day.

The trucks would not run from 7:15 to 8:15 a.m. on school days, he said.

Vista’s engineers also are working on a list of down-gradient water wells to include within the half-mile radius of the mine, Helquist said.

The company is proposing that Scott McCurdy of Cedar Corporation review the list and approve it, he said.

Vista also is proposing to offer up to $5,000 per well for the guarantee and to include cash as an option that would be kept in a city-controlled escrow account, Helquist said.

Property values

As for the property value guarantees, Vista is proposing to guarantee an additional $2.5 million in property value and would include the Jeske property, Helquist said.

Exceptions to the property value guarantee include commercial and industrial properties as well as property owned by the state, county or a bank, such as a foreclosure property, he said.

The property value guarantee also would not apply to former industrial properties in Downing that have been identified as contaminated, Helquist said.

If a property owner wants to sell and receives a bona fide offer that is 50 percent of the market value, Vista will pay the difference, Helquist said.

Studies have shown that property values drop by 30 percent one-third of a mile from a mine, he noted.

Vista is proposing to cap their liability for property values at $600,000 per year, Helquist said.

All of the properties included in the guarantee total $3.5 million, he said.

The $600,000 assumes that everyone included in the guarantee will want to sell, and 50 percent of the market value totals $1.8 million. Spread out over three years, that amounts to $600,000 per year for Vista, Helquist said.

School district

Terry Klinger, city council member, wondered about the agreement with the Glenwood City school district.

Helquist said he had sent a proposed memorandum of understanding to the school district early in February but that he had not yet heard from the school district’s attorney.

Terry Dunst, the attorney representing the city council, said he had talked to the school district’s attorney about a month ago, but that had been before Vista had sent the memorandum of understanding.

Vista has agreed to everything the city council proposed except for the property value guarantee as far into Downing as Downing had wanted, Dunst said.

Counter proposals

After 30 minutes in open session, the committee of the whole adjourned to closed session and returned to open session at 8 p.m.

Mayor John Larson is proposing that three properties owned by Larson and his wife be removed from the property value guarantee, Dunst said after the council returned to open session.

The city council also is proposing that one property on county Highway G and that two properties near the intersection of G and state Highway 128 be added to the guarantee, he said.

As for water quality, the city council is proposing that if there is a problem within the agreed upon area that the water quality agreement be extended to the next property, and if there is a problem there, be extended to the next property, Dunst said.

Engineering fees also are a concern, and council members do not want to cap the engineering fees at $10,000, he said.

R.J. Sikes of Vista Sand said the company wanted to cap the engineering fees at $10,000 annually so that the sand mine is not “over engineered.”

A cap of $10,000 may be all right today, but ten or 15 years from now may not be adequate to cover engineering fees, Mayor Larson said.

If Vista runs a clean operation, the engineering fees will be less, but the city will not know that until the sand mine has been operating for a while, said Ben DeGross, council member.

The city council also is proposing a three-cent increase on the royalty payments every five years, Dunst said.

Sikes said Vista would be agreeable to the changes suggested by the city council.

Several council members said they wanted to read the final draft of the agreement before voting on it.

Klinger said he would like to see the agreement with the school district before approving the pre-annexation agreement with the city.

The committee of the whole approved a motion recommending that the Glenwood City Council approve the pre-annexation agreement with the changes that had been agreed to verbally during negotiations, pending the city council’s review of a final draft of the agreement.

City council member Dave Graese made the motion, and council member Nancy Hover seconded the motion.

Klinger, Scott Schone, Graese and Hover voted in favor of the motion.

DeGross and Crystal Booth voted against the motion.

If the Glenwood City Council approves the pre-annexation agreement with Vista Sand, the next step will be for Vista to make a formal request that the city annex the site of the proposed sand mine from the Town of Glenwood.

If the city council does not approve the annexation, the pre-annexation agreement would be null and void.