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Serving Northern St. Louis County, Minnesota

Setterberg appointed as mayor

Marshall Helmberger
Posted 11/9/21

TOWER— Dave Setterberg is Tower’s new mayor following council action here on Monday. The council voted unanimously to appoint Setterberg to fill the remaining term of Orlyn Kringstad, who …

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Setterberg appointed as mayor

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TOWER— Dave Setterberg is Tower’s new mayor following council action here on Monday. The council voted unanimously to appoint Setterberg to fill the remaining term of Orlyn Kringstad, who resigned as mayor in September.
Setterberg was first appointed to the council in January 2020 to fill the seat left vacant by the resignation of Steve Abrahamson. But Setterberg easily won election to a four-year term on the council just over a year ago. Setterberg had served as acting mayor under Kringstad and has filled in at the position over the past several weeks.
In accepting the mayor’s job, Setterberg gives up the remaining three years of his current council term. He’ll face the voters again in November 2022, should he choose to seek election as mayor or another council seat.
With Setterberg appointed as mayor, the council appointed Tom Suihkonen as a new member of the council. Suihkonen, the husband of current ambulance supervisor Dena Suihkonen, was the only applicant for the position. Suihkonen was not present at the meeting and will presumably be sworn into office at the council’s next meeting, set for Monday, Nov. 22.
Suihkonen’s appointment will expire next November, so he’ll need to face the voters next year if he hopes to remain on the council.
In other business, the council set a special meeting to hear presentations from representatives of at least one community foundation and Frandsen Bank and Trust about options for investing the Gundersen Trust. On Monday, the council heard from Steve Wilson, a member of the trust board, who has been looking at options to improve the trust’s abysmal returns. The roughly one-million-dollars in principal in the trust could be generating tens of thousands of dollars a year to support the city and enhance recreational opportunities in the community, but poor investment decisions over the years have left the trust barely able to cover its legal and auditing expenses in recent years.
Wilson cited a 2018 decision by the board to limit the trust’s investments to only the lowest-yielding instruments as “ill-advised,” noting that the decision had cost the trust as much as $400,000 based on the returns the trust would have achieved since then in an S&P 500 index fund.
“Let that sink in a moment,” said Wilson.
Wilson said the trust board had been hampered for years by its own lack of investment expertise along with faulty recommendations and advice from its auditors and legal counsel. The trust board, over the past several months, has sought to chart the best path forward, with advice from a new attorney who specializes in trust management.
Wilson said the trust can either continue to self-manage, which he strongly recommended against, or it can rely on an investment advisor from an area bank, or turn over the assets to an existing community foundation, which would invest the funds on behalf of the trust. Wilson said the foundation could set a pre-determined amount of income, typically four or five percent of the principal in any given year, from the trust, which would be available for community grants or funding city operations. Based on the current principal in the trust, the fund could likely generate between $40,000-$50,000 a year under such a scenario. In recent years, the trust has essentially yielded nothing for the community.
The trust board is asking the council to weigh in on the path forward. Ultimately, any decision would need approval from the court which currently oversees the trust.
In other action, the council:
• Rejected a motion by council member Joe Morin to give retired city maintenance supervisor Randy Johnson $1,773 to compensate for potential lost interest he could have gained if the city had sent his outstanding sick leave payout to a state-run fund as was required in the city’s union contract. The city had failed to send the funds to the state when Johnson retired in 2018, but Clerk-Treasurer Victoria Ranua, who took over at city hall in 2019, did submit the funds last year once she learned of the requirement.
The council decision came after lengthy discussion with city attorney Mitch Brunfelt, who said the council had no obligation under the union contract to pay Johnson the money, but could do so if they felt like it.
“It’s your discretion,” Brunfelt said, although he noted that the council’s decision would likely set a precedent for another employee who retired shortly after Johnson.
Ranua noted that Johnson had received a considerable payout from the city at the time of his retirement, including $23,299 for unused sick leave and an additional amount of at least $11,334 as part of a medical flex spending account that he could draw on to cover medical expenses. Brunfelt said some of the payments to Johnson were unusual because they were negotiated by Johnson outside of the union contract.
After considerable discussion, Morin made the motion to compensate Johnson for the lost interest, but his motion died for lack of a second.
• Set a budget working session for Wednesday, Dec. 1, at city hall. The session will begin at 5:30 p.m.
• Heard from Morin that the city may be able to obtain a used grader from St. Louis County to replace the city’s existing equipment, which needs major repairs. Morin said public works supervisor Ben Velcheff would investigate further and provide more information at an upcoming council meeting.
• Heard from Morin that the final draft of the police contract with Breitung Township is done and should be ready for council action at their Nov. 22 meeting.
• Appointed Morin to serve as acting mayor.