City plans to rent farmland to recoup assessment

by Joni Astrup

Associate Editor

The Elk River City Council has agreed to settle the issue of deferred water and sewer assessments on the Houlton Farm by reducing the amount the owners owe by $120,000.

Under the plan, the city would recoup that money by renting out crop land at the farm.

A view of the river from the farm. Photo courtesy of the City of Elk River
The Houlton Farm has frontage on both the Mississippi and Elk rivers. File photo

The Conservation Fund has been working to secure funding, including assisting the city in seeking a $2 million grant, to buy the 335-acre farm and turn it into a nature-preserve-type city park.

Along the way, the issue of deferred special assessments has surfaced. The assessments are from a 1992 project that brought city sewer and water to the western area of Elk River. The Houlton Farm was assessed $142,178, which was deferred under the Green Acres program. As of late last year, the assessment plus interest totalled about $350,000, and would have to be paid if the land were sold.

Representatives of the farm’s ownership group had raised a concern about the outstanding assessments last year.

In a 4-1 vote Tuesday, the City Council approved a letter that outlines an agreement between the city and the Houlton-Olson Family to settle the matter.

The City Council’s consensus is that the assessments need to be paid, according to the letter.

“That withstanding, the city would be willing to reduce the outstanding assessment amount due from the Houlton-Olson Family by the amount earned over seven years of leasing the tillable acreage at the current lease rate,” according to the letter from Elk River City Administrator Cal Portner.

The current lease, which expires on Dec. 31, 2014, is $104 per acre for 165 acres or $17,160. Over seven years, that would total $120,120.

The agreement is contingent on grant requirements allowing the city to lease the property for seven years following the expiration of the existing lease at the end of this year. That would allow the city to recoup the $120,120.

The remaining assessment principal and interest (less the $120,120), would have to be paid by the Houlton-Olson Family before closing on the sale of the property, the letter stated.

Mayor John Dietz voted against the letter outlining those terms. He said there is no guarantee that the city would get $17,160 a year from leasing the farm land. Council Member Paul Motin raised similar concerns.

Motin, however, joined with the other council members in approving the letter.

Council Member Barb Burandt said she has done some checking and the $104 per acre figure is not unusual. She also said she isn’t aware of any available farm land that has gone unrented and feels the risk of the city not being able to lease the property is very low.

The Houlton Farm is located west of downtown near the Orono Dam. It has frontage on both the Mississippi and Elk rivers.