"On the issue of conflicting interest, the city disagrees with your allegation that any city decisions were compromised or improper because of conflicting interests," City Manager Eric Sorensen said in a letter attached to a half-inch packet of documents that was sent this week to Mary Kells, board conservationist in Rochester, Minn.
The state had alleged that Judy Bodway, Winona director of economic development and Port Authority Assistant executive secretary, created a conflict of interest as she policed compliance with wetland law and sought wetland permits and exemptions from the city for the Port Authority.
Sorensen said City Planner Mark Moeller handled wetland filling permits, not Bodway. Both work in the city's Community Development department. Sorensen proposed Moeller report to him, not Bodway, for future wetland filling projects.
Sorensen said he does not understand how Bodway could represent a conflict of interest.
"First there was no wetland violation in the filling of Riverbend," he said. "The project was permitted by the Corps of Engineers, the Minnesota Pollution Control Agency and was exempt from (the) Wetland Conservation Act," he said.
The city issued an exemption to the Winona Port Authority to fill Riverbend, a $4.1 million project supported by a local option sales tax. Riverbend has a Menards store and is the targeted site for a new Wal-Mart, as well as smaller retail stores and manufacturers.
The city was fined $40,000 by the Minnesota Pollution Control Agency for its failure to contain mud that spilled in the fall of 2001 at Riverbend. These problems and what Kells called "inadequate and premature review and approval of the Menards Development" prompted the January audit.
The findings were reported in an October letter from Kells to the city, where she outlined how the city failed to follow the state Wetland Conservation Act of 1991 as it approved exemptions for filling 96 acres of wetlands in Riverbend and 12 acres of wetland on Menards property, with sediment dredged from East Lake Winona.
The state had recommended the city relinquish its authority to Winona County. Outside of major metropolitan areas, counties typically verify compliance with wetland laws. Sorensen said the city wishes to keep this authority, which it has had since 1994.
The state charged that the city changed the Menards site plan after wetland permitting, did not follow a plan to compensate wetlands and ignored a technical evaluation panel's assistance.
Sorensen said the plan grew from 35 acres of wetlands to 43 acres because the city changed its mind about Riverbend uses and sold another parcel to Menards, Sorensen said.
He attached a letter from a Menards lawyer and council agendas showing what he said is proof that wetland law procedures and a technical evaluation panel's were considered.
On the state's charge that the city failed to follow procedures to exempt 96 acres in Riverbend from wetland permitting, Sorensen said this is "not true," and the criteria qualifying the city for an exemption were outlined by a private consultant.
Although the state recommended the city relinquish its permitting control to Winona County, it wasn't required to do so. The city is revising its policy to deal with wetland filling projects and expects to adopt it in March, Sorensen said.
While much of the letter to the state is filled with technical language, Sorensen reveals some irritation with state policy.
"It is perplexing that we need to address these issues over and over," Sorensen said.
Contact reporter Jeff Dankert at (507) 453-3513, or e-mail: jdankert@winonadailynews.com.

