Under the tutelage of financial consultant Mike Bubany, of David Drown Associates, the Rushford City Council approved a refinance that should net them $58,090. The note review is a $594,000 2012 General Obligation Tax Abatement. The note is now callable and the first opportunity for the city to refinance through the Minnesota Rural Water Association’s Midi-Loan Program. The new note will have a non-traditional, flexible five-year call term and net interest rate of 1.85%, according to Bubany.
“Late last week, I was getting contacted by investment brokers and one of them projected savings in the $30,000 range on this,” he stated during the June 30 meeting. “That’s why I feel we did well on this.”
Fees associated with the refinance are already built into the gross savings. It is not a rated bond due to extended time required for rating; time in which rates could move again. The savings were created using a potential bond and when compared against rated bonds, savings appeared to be just as competitive. “It’s another reason why I feel warm and fuzzy on this deal,” said Bubany. “Based on what other cities are getting, this is far more.”
The city will also be reaping some revenue from the sale of lot 3 block 2 in the Himlie Business Park, 1109 Miller Circle, to Horihan properties, LLC. The land and assessment value is $175,521 and the sale is slated to take place on or before December 31, 2020. Owner Creighton Horihan intends to use the property to construct a 25,000 sq. ft. structure to include office, warehouse, and workshop space, as well as provide another three to five jobs for the community.
The deal was brokered for the city by Rod Darr, of Darr Realty. “This is a full price offer, with the buyer paying half the assessments,” explained Darr. As of early October, 2019, the current balance on assessments was $53,000. That number has since dropped and the buyer will pay half of the actual balance. All fees are standard, but there is a possibility of deed tax, estimated at under $404. The cash offer includes $2,500 earnest money down. “There should be no surprises anywhere,” added Darr.
Mayor Terri Benson noted that plans were initially reviewed and approved by the Economic Development Authority (EDA) Commission. “Based on what would be built, plus the three to five jobs, we were very encouraged by it.” Outgoing commissioners Jared Brown and Scott Ledebuhr were able to vote on the decision before their terms ended and Benson added their experience was valuable in the decision.
“The common language was, ‘This is a no-brainer,’” stressed City Administrator Tony Chladek.
Construction on the facility would be this year and Darr stated Horihan had indicated a desire to have it done before the snow flies, if possible. “Room is an issue for him right now,” he added. “I would expect we’d see something this year.”
The council also approved a change order with Zenke Construction to extend the completion date for the 2019 Street and Utility Improvement Project. The extra time is needed to complete the raising of manholes and stop signs and to address grass areas that aren’t taking. Part of the issue may be related to the scheduling of blacktop companies. City Engineer Derek Olinger, of Bolton & Menk, has been in contact with Zenke Construction and had no concerns with the extension, according to City Clerk Kathy Zacher.
“We’re not worried they’re not going to do this, but we have to have on record that we’re allowing more time, because there’s always that threat of liquidated damages,” said Zacher. “We have them on contract to have done by a certain time. It’s legal paperwork we should have in place to protect ourselves. If he sees we’re considering liquidated damages, he’ll move a little faster.”
“They’re one of our better contractors,” added Chladek.
Lastly, the council approved the R-P School Foundation Bluff Land Triathlon event. It will be held at Creekside Park, Magelssen Bluff, and on city trails August 15. The city provides liability insurance coverage for the physical properties where the event is held. The Foundation will have a COVID Preparedness Plan in place soon once there is a better understanding of the number of participants and any modifications to the state’s plan.
A number of vacancies exist on various city commissions. They include three seats on the Airport Commission, Planning Commission, and EDA Commission. One seat is open on the Electric Commission. Interested persons should contact city hall.
Additional updates included a coming decision on whether or not to hold the annual Root River Jams event. Organizers will are planning to hold the event on August 15. Factors including weather and COVID restriction, creating limited capacity will play into the decision. “It’s the opposite of what we’re trying to do, which is bring people to town,” noted Chladek. A decision is expected by June 26.
The Public Works Department continues to work on getting the Rushford Aquatic Center ready for limited opening. “They’ve made really good progress and are testing all the chemical components. It’s looking really good,” said Zacher. Decisions on an opening date and whether or not the city will limit users to just those within the Rushford-Peterson School District still need to be made.
The new All Terrain Vehicle/Utility Task Vehicle ordinance is moving along smoothly with 30 permits issued to date.
The next regularly scheduled council meeting is Monday, July 13, at 6:30 p.m. The public is encouraged to attend. At this time, it is unclear whether the meeting will be held at city hall or virtually via Zoom. Please contact city hall if interested in attending.