Bagely to vote on gas system

I first started at the Bemidji (Minn.) Pioneer as an intern in the summer of 1996. That would begin six years as a news reporter, sports reporter and copy editor for a small, six-day-per-week daily newspaper in northern Minnesota. I wrote a large range of stories from multiple beats, to features to sports, my favorite being the coverage of the Red Lake Reservation High School basketball team named the Warriors. Here is a collection of my stories from my time at the Pioneer.

BAGLEY, Minn. -- Voters here will go to the polls Monday for a special election to decide essentially whether two cities -- Bagley and Fosston -- should pursue construction of a municipal natural gas system and whether Bagley residents would allow general obligation bonds to fund the project.

The Bagley City Council has plans to build the system with a favorable vote -- and should Bagley be interested, so would Fosston, which would benefit from the installation of the gas line as well.

Natural gas would be the fourth utility owned and operated by Bagley Public Utilities. It currently operates water, sewer and electric utilities. The project would cost Bagley an estimated $1.35 million.

According to Mayor Steve Beltz, the council was approached by Northern States Power Co. of Minneapolis, the company that would install the gas lines, last summer when the Clearbrook City Council voted to bring in a line.

This would give Bagley the opportunity of saving installation money because NSP would already be working in the area and could install a line to Clearwater County Road 22 -- about three miles north of here -- Beltz said Friday in an interview.

What could save Bagley even more money is the city of Fosston is considering sharing gas line installation costs, according to Beltz. That would result in a partnership that could save both "a couple of hundred thousand dollars."

Fosston is holding a public hearing Tuesday for its residents to discuss the project, Beltz said a strong push by Fosston's commercial sector has made the idea popular there, but Fosston Mayor Arvid Clementson has said it would be impractical to construct a line should Bagley residents vote "No."

The first question on Bagley's ballot askes whether the city should proceed with the project, and the second question asks residents whether they would allow the city to use general obligation bonds to fund the project.

A"Yes" vote on the first does not obligate a voter to switch to natural gas, Beltz said. It only gives permission to the city to construct the line.

And, Beltz said, general obligation bonds would allow the city to borrow construction money at a lower interest rate because should gas line revenue not cover the cost of payments, city tax dollars would be guaranteed to cover the payments.

Revenue bonds would require the city to borrow at a higher interest rate, because the lender is taking a bigger risk if the line is not profitable.

According to Beltz, commercial property owners are extremely interested in natural gas because it would lower their heating costs, which is probably the main reason residents would chose to switch as well.

He added some business owners in town have organized to campaign for a "Yes" vote because they do not live in town and therefore do not have a vote.

The second reason the city is interested in natural gas is it is considered an economic development tool and can attract businesses, he said.

Beltz said the city conducted a survey to gauge the interest level of Bagley's residents shortly after a public hearing last fall, and the results were favorable.

Seventy percent surveyed said they would allow the city to construct the municipal gas system, and enough -- 30 percent -- indicated interest in switching to natural gas within the next two or three years to pay for the installation of the gas line, he said.

"The consumer payments would pay for the line. If the revenue didn't pay for it, we would have to use city tax dollars to pay for it," Beltz said. "But our intention is that if it isn't self-supporting we won't install it."

If the project passes Monday, NSP has told Beltz that residents could be connected this coming fall, but that also depends upon the number of people interested.

"Obviously, if the guy at the end of the block is the only one hooking up, we're not going to tear up the whole street," he said. "If you're the only one interested in your neighborhood ... you have some selling to do."