Appeal sends municipal campus fight back to court

Plaintiffs take case to Court of Appeals, also ask state Supreme Court for accelerated review 

Clint Riese
News Editor

Matters regarding the city’s plan to build a municipal campus at 1432 S. Lake St. are headed back to court.

The plaintiffs in a recent lawsuit against the city of Forest Lake and its Economic Development Authority last Wednesday served Washington County District Court a notice of appeal to the Minnesota Court of Appeals. Lakes Area Business Association, Cameron Piper, Cassandra Piper and William Anderson also requested accelerated review of their appeal by the Minnesota Supreme Court.

The city and EDA last month were granted summary judgment in 10th Judicial District Court. However, Judge John C. Hoffman called the dispute a pure legal issue that is “ripe for appellate review.”

The plaintiffs foresee the appeal being a landmark case with statewide implications.

“This case involves a serious dispute by the parties as to the proper interpretation of the statutes governing public funding of municipal ‘capital improvements,’” stated the petition to the Supreme Court submitted by attorneys Frederic Knaak and Wayne Holstad. “The District Court properly recognized that this is the appropriate case for a clarification of these statutes for the benefit of municipalities and the taxpayers.”

At Issue

The plaintiffs argue that state law was violated when the EDA in January issued more than $22 million in lease revenue bonds rather than having the city issue capital improvement bonds to fund a new public safety/city hall facility.

“The procedure adopted by the city was a deliberate scheme to avoid taxpayer scrutiny and review,” the request to the Supreme Court said.

In addition, the plaintiffs argue that the city, by denying a petition for an election on the bond issuance, failed to comply with state law.

“The statutory requirements at issue need to be interpreted so that the taxpayers and the municipal corporations have the certainty to understand when an election is required for approval of public projects,” the request said.

At the district court level, Judge Hoffman ruled that the city was not required to hold a referendum on the bond issuance.

Regarding the assertion that the EDA’s bond issuance went against state statutes, Hoffman disagreed and wrote that, in fact, municipalities are provided flexibility from statutes that “intersect and seem to be complementary to each other.”

City Stance

News of the appeal came up at Monday night’s EDA and City Council meetings.

Ben Winnick, a member of both boards, during the council meeting questioned the city’s plan, seeing as the litigation timeline will likely overlap with that of the facility’s design, bidding and construction.

“Before we get to that point, we should know, are we just going to barrel straight forward and keep spending money or, this building we’re building for the next 40-50 years, can we step it back a month and wait or see,” Winnick said.

Mayor Chris Johnson said that even if the case was fast-tracked, it would likely take at least six months for a ruling. The awarding of building contracts is scheduled for August.

“I think we need to talk about that. … I think we need to look at those expenditures and timelines and make sure we’re doing the responsible thing,” Winnick said.

City Administrator Aaron Parrish said he would try to schedule a closed session where the EDA and City Council could hear from James Thompson, the attorney handling the case’s defense.