Rather than get annexed, this northern Minnesota community is becoming its own city

Bemidji is the first city on the Mississippi River, but there will soon be a new second.

Northern Township recently won its petition to become Minnesota’s next city, avoiding annexation by Bemidji. Though rare, it’s part of a recent trend in the state where a township incorporates to maintain a rural, small government identity instead of being gobbled up by a neighboring big city.

Here, it was a border battle decades in the making that came down to water, both wastewater treatment and protecting the area’s greatest asset: Lake Bemidji.

The township encompasses 40% of the shoreline where a majority of properties rely on aging septic tanks, long identified as a lake contamination threat.

When a historic resort in the township approached the city about connecting to municipal sewer after its septic system failed, Bemidji changed course on a previous offer to the township to supply the service, saying the area would need to be annexed in order to connect.

In spring 2025, after reaching an impasse with the city, the township filed a request with the Minnesota Office of Administrative Hearings. Northern Township wanted to become a city and build its own wastewater project after securing $6 million in federal grants. Bemidji countered with a petition to annex 910 acres of township lakeshore to the east and north.

The opposing petitions sparked a two-week trial last fall that turned town hall and city hall into courtrooms. More than 400 residents packed the 4H Building at the Beltrami County Fairgrounds in September, sharing passionate comments on the boundary changes and what it would do to property taxes and services.

Palmer-Denig arrived at a decision Feb. 10, denying the city’s petition and granting the township’s. Bemidji is working through the appeal process.

“[T]his decision will have a significant impact on this community. Litigation often inspires ‘sharp elbows,’ but successfully living together will require a different approach,” Palmer-Denig said in the 70-page order.

As the ruling stands, the transition from Northern Township to the city of Northern will be official after a mayor and four city council members are elected in November.

Karrie Nelson, owner of Ruttger’s Birchmont Lodge, the resort that was a catalyst in the petition fight, was pleased with the ruling. She lives in the city with her husband, but their lodge is in Northern Township.

“I was frustrated they were trying to annex additional properties to provide sewer to when we still don’t have it at our house,” she said.

When the Nelsons purchased the 120-year-old resort in 2018 and began renovations, the work was stalled by the failed septic system. Nelson said they could have replaced septic tanks, but she was implored to do what Ruttger’s could for the whole community.

“If we put our own system in, that kind of would put a kibosh on the city or the township making further efforts” to get a sewer system, she said.

“It’s been a struggle to wait, but I do know that really is the best case scenario for the whole community and the lake, which is the one thing we absolutely depend on in this area for our tourism.”

With more townships than any state, Minnesota has experienced a slight decline as some of the state’s 1,700 townships become cities, or unincorporate altogether.

Northern Township marks the fifth time in the past decade that Minnesota — with 854 cities and counting — gained a city and lost a township, the original form of local government. The heyday of incorporation in the 1960s saw 15 townships turned into cities.

Like Baldwin, the boundary fight along Lake Bemidji boiled over in recent years, but Northern Township considered incorporating as early as 1977, according to reports in the Bemidji Pioneer newspaper.

Northern Township already operates and feels like a rural suburb. There is a church and elementary school that is part of the Bemidji school district. The incorporation has no impact on the district, nor will it impact the rural fire association.

Bemidji and the township have previously entered orderly annexation agreements, which establish a planned city growth area with a set reimbursement to townships over a period of time instead of a forced, often contentious, annexation.

An orderly agreement in 1977, for township land north of town surrounding the hospital, prohibited Bemidji from annexing any land prior to 2000.

When a 15-year orderly agreement ended in 2020, the township’s population had lost about 1,000 residents, said Chris Lahn, township administrator.

Lahn said that on the heels of the orderly annexation, many residents thought “enough is enough.”

The city presented six options in 2022, including one that would allow the township to connect to municipal sewer as a paying customer. The township thought that was the best option and applied for federal grants, securing $6 million from the Environmental Protection Agency to construct a collection system that would connect to the city.

But in 2023, the city recanted its offer, Palmer-Denig said in the ruling.

The township, “unwilling to consider ceding more of its territory,” she wrote, “concluded that the path forward required it to develop its own municipal system, and to incorporate to be able to engage in the type of financial planning and funding work required to realize that goal.”

The proposed annexation would have removed 30% of the township’s tax base with 120 parcels along the lakeshore.

Her decision also looked at proposed timelines as the wastewater project had another catalyst. In addition to the resort’s request, a county road reconstruction project west of Lake Bemidji State Park is going out for bids in March. The county didn’t take a position on annexation, but she wrote that “jurisdictional uncertainty could result in increased costs” and delays in reconstruction.

Palmer-Denig said that “only the township’s plan would serve the entire annexation area within the next few years” because the city would not serve eastside lake properties for another 10 to 15 years.

“The city has not established that it can better serve the entire annexation area,” she wrote.

But the judge said “sentiment in the township is not universal.” Some preferred to be annexed while others questioned why the city didn’t act sooner when it had known the environmental concerns for years.

The city and township in a 2007 joint plan found all properties in the proposed annexation area should be connected to municipal sewer by 2025, the ruling stated. A joint study from five years ago also found the majority of septic systems around the lake fell into a high-risk category.

Bemidji Mayor Jorge Prince said in a recent court filing that he received a letter from Lahn on Feb. 13, just three days after the ruling.

The letter said the township wanted to discuss the city’s original offer about connecting to Bemidji’s wastewater system.

But instead, Bemidji sent the letter to Palmer-Denig requesting another hearing and to amend her ruling. The city is not fighting the incorporation, but asking the judge to reconsider whether northside portions of the lakeshore would be better annexed to Bemidji. The city had a seven-day window to request an amendment and has 30 days to appeal.

In a statement to the Minnesota Star Tribune, Prince said Bemidji “is continuing to exercise its legal options.”

“The City will have no further comment at this time while these legal proceedings play out,” Prince said.

“We were assuming, since the border is set now, the decision is in, that it’s at least worth a conversation again,” he said.

The judge encouraged the city and township to “engage in good faith dialogue.”