Black Dog Annexation Draw Angry Protest SP Dispatch 1961

August 31, 1961
By ROBERT WILLIAMS AND DON HEINZMAN
Staff Writers
Strongly-worded salvos were fired from two quarters today in protest over the annexation of the tax-rich Black Dog power plant to Bloom-ington.

The opposition came from John Metcalf, Burnsville school district superintendent and a state senator, and from the Savage Area Commerce association.
Both also deplored the petition by Bloomington to annex all of Burnsville township.
Metcalf warned that Bloomington's annexation of the Black Dog plant will cost the school district thousands of dollars, and he predicted his district will die within two years if"Burnsville township is forced to consolidate with Bloomington.
Previously, it was thought the annexation did not affect the school district.
Metcalf said he has been advised that Bloomington's annexation of the Black Dog plant will affect the interest rate Burnsville school district 191 will have to pay on future bond sales.
The district's bonding consultants, Moody and Springsted of St. Paul, in a letter to Metcalf, said the NSP property representing approximately 26 per cent of Bloomington's valuation has assumed liability for $4,800,000 of Bloomington's $18,000,000 general obligation bonded in- debtedness.

Add t h i s to Burnsville school district's bonded in- debtedness of $2,500,000 and
the answer is the Black Dog plant has a bond liability of over $7,300,000.
The consultants strongly suggest that bond buyers and rating services will consider both debts on the Black Dog plant and pos- sibly change Burnsville's investor rating from the present "Baa" to possibly the next lower rating "Ba."
Assuming that Burnsville had a Ba rating (the rating now held by Bloomington) on its last bond sale in February, the lower rating would have cost the district an extra $13,915.
If the Burnsville district is rated Ba, local banks may not bid for the bonds.
"In our opinion," write the consultants, "reduction of your current rating will mean additional interest costs of not less than a
quarter of 1 per cent."
Burnsville's last bond issue in February under the lower rating would have cost the district an extra $13,915 at the higher rate.
Comparing Burnsville with Bloomington in the sale of bonds, Moody and-Springsted explained that in February Burnsville sold bonds at an interest rate of 3.42 per cent, while in July Bloomington sold Ba rated bonds with ma- turity of 1982 for 4.35 per cent.
"Discounting the .28 per cent increase of the bond buy- ers index between the time your bonds and those of Bloomington were sold, its bonds cost .65 per cent more than yours," the statement says.
"Applied to your issue, this would have made a difference of over $36,000 or, an addition- al 19 per cent in interest cost."
Metcalf said he voted against the amendment in the 1961 legislative session that permitted the annexation of the power plant. The amend- ment was made by Sen. W. B. Dosland (C, Moorhead) after Sen. Paul Thuet, (L., South St. Paul) had moved for re- consideration of the bill
Metcalf said few senators realized the impact of the legislation at the time and that if Thuet and Dosland didn't realize it, "they shouldn't have put it in."
"The only answer is, he's a meddler," Metcalf said of Thuet. "He wants to make a big name for himself."
Metcalf was asked if he knew of any connection be- tween Thuet and NSP.
"The only thing I know is that NSP has hired him to appraise land for condemna- tion purposes in Dakota and Washington counties.
The Savage protest was made in a letter from K. W. Westerber, president of the commerce association. Cop- ies have been sent to J. Ros- cue Furber, vice president of NSP; G o r d o n Miklethun, Bloomington mayor; Joseph Robbie, chairman of the mu- nicipal commission, and Gov. Andersen.
"Our group is appalled that the Bloomington council should indulge in a malignant maneuver that no respectable citizen of these or any other communities could possibly condone.
"The recent award to
Bloomington as an All-Amer- ican city has been tainted by both definition and connota- tion resulting in a loss of favorable p u b l i c relations that may never be restored, due to the selfish monetary gains of a few clever leaders in the Bloomington commu- nity," the letter states.
The association added that "it is unfortunate that management of NSP , in arriving at the decision, did not investigate the ac- tivities of our association to bring about a stabilized tax base for industry and home owners through co- operative area planning and avoid the many mis- takes that has hampered Bloomington during its for- mative years.
"Removal of a prime in- dustry at this time from our municipal tax base will cer- tainly create a setback in our present plans that will take years to overcome," the association said.
It added that any continu- ance of the petition to annex all of Burnsville "must be considered an affront to the intelligence and future of every resident on this side of the river."
Meanwhile, a mass public meeting has been called for 8 p. m. today in Burnsville high school, to inform resi- dents of the present status of the controversy and map plans for future action.