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Erik Burgess, Published March 29 2013

Oakport water tower’s future could be contentious

OAKPORT TOWNSHIP, Minn. – Township officials could soon be in hot water over the future of its sole water tower.

The Oakport Authority Board is renegotiating a 35-year lease with AT&T for telecommunications antennae attached to the tower, a structure the township will no longer own in 2015 when it’s annexed into Moorhead and the tower becomes the property of Moorhead Public Service.

AT&T pays Oakport $1,000 a month for the antennae, but the new deal would end monthly payments and the company would instead make a one-time $121,000 payment to the township.

MPS General Manager Bill Schwandt said this could be in breach of the 1990 joint powers resolution among the township, MPS, Moorhead and Clay County, which set forth the annexation date, brought water service to Oakport and led to the construction of the water tower.

“We don’t know if we like the idea that you’re going to cash out of this thing right before we take over,” Schwandt said.

AT&T’s current 25-year lease with the township started in 2008, but was up for a five-year renewal in November. A contractor for AT&T approached the township with the long-term renegotiation. Schwandt said MPS wasn’t part of the conversation, even though more than 33 years of the lease will occur when the utility owns the water tower.

“I think they may have the authority to do it,” Schwandt said. “It just is like this doesn’t seem like the right thing to do.”

The MPS attorney is reviewing whether Oakport is in breach of the joint powers resolution, and if the utility has to honor the AT&T contract.

The five-person Oakport Township Board unanimously approved the renegotiation bid earlier this month, but is set to discuss it one more time on Monday.

The MPS board has scheduled a special meeting Monday morning to draft a letter of objection in hopes that Oakport continues a monthly contract with AT&T, which the utility would assume when it takes over the tower.

For township Chairman Jeff Schaumann, the new deal makes sense for Oakport.

If a monthly lease is still active when MPS gains control of the Oakport tower, those funds would likely go toward all of the utility’s customers and not solely the township, whose taxpayers funded the tower, Schaumann said.

Schwandt said he believes Oakport is getting a bad deal on the renegotiation. Agreements of this sort typically bring in $10,000 to $20,000 a year for communities, he said, and Oakport is only asking for a $121,000 lump sum for 35 years, about $3,500 annually.

“We would rather have $15,000 for the next 35 years versus $121,000 upfront, especially since we’re not going to get any of that $121,000 possibly,” Schwandt said.

But Schaumann said AT&T is allowed to cancel the lease at any time, meaning monthly revenue is by no means guaranteed down the road.

“We believe the number that’s on the table today represents the most that this particular group is willing to do,” he said.

Funds from the antennae leases go toward community services such as mosquito spraying, Schaumann said. A lump-sum payment allows the township to continue putting that cash directly into the community.

“If I were in their shoes, I’d want to try to protect an income stream, too,” Schaumann said of MPS. “But we are elected by the residents of Oakport Township to represent their interests, not to represent the interests of Moorhead Public Service.”

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Readers can reach Forum reporter Erik Burgess at (701) 241-5518