By MaryHelen Swanson

The North Branch City Council came to the table Monday night with no new faces, although three members were returned in the November General Election.

Being sworn in as returning mayor was Gloria Karsky, with councilwomen Amy Oehlers and Kathy Blomquist taking their oath of office as they return to their seats on the council.

Following this action, the council moved into a heavy agenda and the meeting continued until 10 p.m.

On the table was a letter of intent with Blackstone Development which the council approved with the first 3-2 vote of the new year.

Approval of the letter gives the city authority to begin negotiations with the development company for a purchase agreement, development agreement and other agreements as the housing project moves forward in the area known as ESSBY Business Park.

Blackstone was selected by the city in 2005 to be the developer of this project and last June, the city approved a letter of agreement with Blackstone for 40 acres south of 400th Street. When it looked as if the housing project was not going anywhere, because the needed rezoning was not approved by the council, Blackstone was hesitant to move forward.

Later in the year, the council approved a comprehensive plan amendment, and subsequent rezoning for the area. Now, as the new year gets underway, the city is eager to renew negotiations with the developer.

The land included will be the original 40 acres south of 400th, acreage to the north designated for housing and most of the area designated for commercial development. The Chisago County Health and Human Services department has a building under construction in this commercial area right now.

Councilwoman Theresa Furman, one of the dissenting votes, objects to the inclusion of tax increment financing (TIF) for housing in an agreement with Blackstone.

NB city finance director David Stutelberg admitted he doesn't know what impact TIF will have for this project, but said the city can't include workforce housing without it.

"We may not have a letter of intent without TIF," he said.

Stutelberg, in his memo to the council, wrote, "The letter of intent in no way binds the EDA or City other than allowing staff to negotiate a development and purchase agreement with Blackstone."

Once the agreements are negotiated, they will be brought back to the EDA and City Council for approval.

The agreement that was approved calls for Blackstone to pay for all costs for consultants unless the City terminates the agreement. If that happens, Blackstone would be responsible for half of the costs and the City the other half.

Exhibit C of the letter of intent shows that consultant costs could range from $110.00 per hour for the city's legal council, to $450.00 per hour for other financial and engineering consultants. Others fall in between.

As the city faces the challenge of finding new businesses for its industrial park, Stutelberg presented the idea of a reward program, similar to one Cambridge is now using, that the city's economic development commission is recommending.

The council tabled action preferring to send the concept back to the EDA to prepare a more detailed program description. There were many details the councilors felt should be included in advertising for the reward.

As presented this week, however, the program would pay $3,000 for a business tip resulting in a new business locating in the industrial park.

The building would have to be at least 10,000 square feet and have at least seven full-time employees.

Payment for the tip would be paid after the business has been in operation for six months and maintained those seven jobs.

Cambridge launched its program last September. It pays $5,000 and does not require a minimum size on the building, but it does require creation of at least 10 jobs.

Oehlers was concerned about where the reward money would come from.

Stutelberg said it could come from a number of different city funds.

And who would be eligible?

Mayor Karsky said the EDA would not want to exclude anyone. Stutelberg said it would essentially be open to anyone. However, the Cambridge program prohibits city council and EDA members, as well as city employees from benefitting from the program.

Karsky thought the words "we reserve the right to terminate the program at any time" should also be included in the advertising.

Furman had concerns that only two cities in the state had such a program, Cambridge being one.

More details should be available when the issue returns from the EDA.

In other business, the council:

• Agreed to go out for two quotes on prices for blinds for the new library. The Friends of the North Branch Library requests these window coverings as there is heat loss in winter and cooling issues in summer. Since the county owns the building, and East Central Regional Library provides materials and staff, it is assumed that blinds might be included in the city's maintenance responsibilities. The floor to ceiling windows are not tinted.

• Approved committee assignments, with Oehlers remaining as acting mayor, and official designations, with the Cambridge Star being named official newspaper. Their bid was lowest, but the size of type will be smaller than the competitor. Two banks were added to the list of depositories, Horizon and Minnco Credit Union, Thomas Miller remains the city's attorney, WSB & Assoc. the engineering consultants, Springsted as financial advisor, Tautges, Redpath & Co., Ltd. as auditor and Hermann Insurance as insurance agent. It was noted that Hermann has been agent since 2000.

• Approved the 2007 fee scale with a number of increases. The six page list of fees can be seen at City Hall.

• Set several special meetings including a goal-setting session for Jan 27, 9 a.m. - 1 p.m. The ESSBY concept plan will be reviewed at 6:15 Feb. 8 and one hour prior to the Feb. 26 regular council meeting.

• In an effort to create a more congenial atmosphere at council meetings, Mayor Karsky suggested a change in seating arrangements for the councilors. She said it was to provide diversity, mix up the members a little so they can listen to each other better. Councilor Kathy Blomquist said it bothered her when she's talking and councilors Oehlers and Furman are exchanging notes or conversing with each other on the other end of the council table. It was noted that often-made 3-2 votes are associated with position at the table. After unsuccessful attempts to create a new seating arrangement, the mayor said "let's give it a try" (the same arrangement) and try to be more respectful and get along better. She said they could evaluate the situation in a couple of months to see if there is a need for a council retreat on this or any other council issues.

• Noted that there is a work session at 6:15 Jan. 18, and a joint meeting with the downtown revitalization committee at 6 p.m. Jan. 22, directly before the regular council meeting at 7 p.m.

• Discussed how to proceed with interim positions of police chief and city administrator. The executive and police committees would be working on these items with possible actions in February and March.