By MaryHelen Swanson

The North Branch City Council, in unexpected action, moved to red tag the construction of Abundant Life Churchís new building in late moments of the councilís meeting Monday night.

Unexpected it was for the councilors as well as city staff and the Abundant Life representatives on hand. There was no inkling of what was to come from the printed agenda.

The action came as the council was about to award the bid for street improvements to Bauerly Bros. for that portion of 392nd Street that abuts the Abundant Life property west of town where they are building a new church.

Under conditions of the conditional use permit (CUP) received by the church, the church is responsible for the road improvement.

The church, as has been noted at past meetings, had two ways to handle the road project: pay for it entirely by themselves (including hiring an engineer to develop plans and specifications and hiring the contractor) or take advantage of the cityís offer to include the improvements in a bonding package assessing the costs back to the church over a period of 15 years.

Before the council could act on the bid award, Lynn Basich, a Roseville attorney representing the church, got up to announce that written objection will be coming from the church over having to pay for the cost of the road improvement.

Further, she said, referring to Article 10, Sect. 1 of the Minnesota Constitution, churches are exempt from taxation and she said an assessment is a tax.

City Engineer Julie Dresel said she was aware of another community with a similar issue but that it had not been tested in court.

She said churches are allowed to be specially assessed. Further, she said Abundant Life is expected to do the road as per the CUP.

She also reminded everyone that the project began with a petition from the church.

Basich said the church wants to do what is best for everyone, but again reminded the council that the Minnesota Supreme Court says an assessment is a tax.

Mayor Gloria Karsky said she was surprised by the announcement and not entirely pleased, but wanted to settle the issue amicably.

At this point City Administrator Joe Lynch said the city might have to halt the project until discussions are held between the church and the city.

City Planning Director Alan Cottingham reminded everyone that the city has gone through with this request in good faith and asked again if the project needed to be halted.

City Attorney Tom Miller said he disagreed with the churchís attorneyís legal position on the tax exemption. At this point the bid award was tabled to Aug. 23.

Then Lynch asked the council members what they wanted to do about the CUP. Mayor Karsky asked that the CUP be pulled and brought to the meeting to re-examine the issue of the street improvement.

When the issue was returned to the table later in the meeting, it was noted that condition #2 stated that the church would pave 392nd Street at its expense.

Miller was concerned about the churchís new intent not to abide by the conditions of the CUP. He suggested the city begin the process of revoking the CUP, following due process. The city should consider stopping construction until this is resolved, he said.

Miller also said the church appears to be presently in volitation of the CUP. He said he was worried about allowing the construction to continue. Basich pointed to the fact that there is no date when the paving must be done and that in the CUP is states all state laws must be followed.

Miller asked if the church would hold the city harmless from any damages. Basich said construction would continue.

Miller then said he would have to recommend red tagging it. Basich asked how the city is harmed by the construction.

Miller said the more of the building that is up, the more damages the church can claim against the city for a project they would be unable to use.

Basich said she didnít agree, and that the church is concerned with how the road is to be funded. Basich also said technically the church would not have to voice objection until the final assessment hearing slated for later in the fall.

Miller said that was wrong.

He said the city made an offer to help the church with the funding of the project.

The church, apparently, still has the option of not using the cityís offer to help fund the road project. But the city feels the church still must abide by the CUP conditions. City finance director Dave Stutelberg said the project can be pulled from the bond package and the money, which has already been received through a bond sale, can be returned to the bond holders.

It was then Miller told the council (by this time only three members were present) that they could direct staff to stop construction by red flagging the project. Lynch asked the church representatives if they had plans for the road.

ìNot at this time,î was the reply. Then Councilman John Pace moved and Councilwoman Kathy Blomquist seconded the motion to red tag. It passed.

In other business, the council:

ï Awarded the bid to Bauerly Bros. for the Viking Park Street Improvement project, minus the lighting. Costs per lot are expected to be $5,100, which can be paid upfront by the homeowners or placed on the taxes as a special assessment and paid over 15 years;

ï Adopted a resolution, 3-1 (Councilwoman Blomquist opposed, Councilwoman Amy Oehlers absent) approving the purchase of property from William Sandison and Jerome Peterson with conditions. The property is in Gateway South by Perkins Restaurant. Parcel one of the property will be sold to the EDA, parcel two gifted to the EDA. The intent to to conduct a turnaround sale of both parcels to a developer. Lynch said the transaction would go through only if the city has a negotiated developerís agreement. The council wants it to include specific number of jobs at living wages and create a value on the property that the city is satisfied with.

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