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Rushford approves Hwy. 43 bidder, moves financing forward

By Kirsten Zoellner

Fri, May 30th, 2014
Posted in Rushford Government

The start of the anticipated Highway 43 project through the heart of downtown Rushford is drawing closer. Sealed bids were opened May 22 and the bid was awarded May 27 to McHugh Excavating of Onalaska, Wis. in the amount of $2,969,218. The amount did see some minor adjustment, but is very close to engineering estimates. MnDOT is currently reviewing the bid before signing off on it. The city is anticipating getting the green light from the state by June 15.

“We feel we got a good price. We’re good to go,” said Josh DeFrang, engineer for Otomo Engineering. The firm had no concern over only two bidders, largely in part to a thorough pre-bidders meeting with potential contractors. “We found out which companies were hungry and which weren’t,” he added.

Discussed in length at the pre-bidders meeting was the city’s desire to see the project move as quickly as possible, potentially utilizing multiple crews and extended work shifts, to minimize impact to the downtown, school, and Farmers Cooperative Elevator. Details will be hashed out at a construction meeting between the city, engineers, and the contractor. DeFrang did stress that the areas in front of the school and in front of the elevator would be done first. The target project end date is November 15. A structured fee penalty is built into the project should the contractor exceed that date.

While it was estimated that the project could have started earlier, Otomo Engineering found no issue with the perceived delayed schedule. “We’re comfortable getting it done,” noted DeFrang. “The road ban came off just two weeks ago. We don’t feel that we’re behind schedule at all.”

The road is expected to be closed to traffic and a detour has been selected. The north end bridge will be closed for the duration of the project and the south end bridge open. It was suggested that the roadway open to local traffic only once the gravel base was laid, but it would likely create issues with flex points due to settling and compaction. Keeping all traffic off the road also eliminates detour confusion and trucks attempting to utilize downtown streets. The streets immediately to the west and east on the interior side of the north end bridge are impassable for trucks due to a steep hill and a tight turn. All truck traffic is being rerouted around town, utilizing I-90 and Highways 76 and 16.

“People are just going to have be patient. We’ll do our best to do this safely and efficiently,” stated City Administrator Steve Sarvi.

The city has granted authority to financial consultant Mike Bubany, of David Drown Associates, to being negotiating for general obligation improvement bonds. The city intends to certify special assessments in the amount of $410,000 to affected property owners. The state has pledged $1.55 million towards the project, expected in the next 4-6 weeks, and a Public Facilities Authority loan for $1,156,730 will cover utility costs associated with it. The remaining $1,350,000 will be bonded.

To meet revenue requirements, the city will follow its capital financial plan, using the expiring levy for the 2004 TIF Bonds to apply to the new debt. This amount will ensure that the project does not adversely affect the city’s current budget. The bond will be for a term of 20 years and is expected at a 3.8 percent interest rate, barring unexpected market fluctuation.

Bubany did address a few talking points, seeking direction from the city. Of the three issues, the least was the city’s high debt level, according to Bubany, since the city has anticipated this project and its impact for some time and has structured measures to counter it. “I’m not concerned with your ability to get the funds in question, but I want to get you the best deal I can,” he noted.

An ongoing issue for the city, also noted by the recent audit, was low cash reserves. This is largely due to continued slow reimbursement from FEMA for 2007 flood damage, estimated at $800,000, as well as the city having used cash, to date, for engineering associated with the Highway 43 project. FEMA reimbursements are expected to be collected in 2014. In addition, Bubany noted the proposed bond issue will reimburse the city for engineering paid to date.

The third concern plaguing the city is a decreased market value. In the last year, the city’s overall estimated market value was reduced more than $6 million. Completely out of the city’s hands, noted Bubany, the decrease came following sales falling below assessed county values. “You still have all the same stuff, it just has less value. Investors view a decreasing tax base as a negative credit factor,” explained Bubany, who stressed a negotiated sales option, as opposed to competitive bond sales, will aid the city’s plight in securing funding.

“The city has faced so many challenges. We’ll do better by negotiating; explaining the challenges. In a competitive sale, there’s no interaction. We will lay it out. It’s a good story to tell… a very dynamic story. Usually it’s just ratios and percentages, but this gives us a chance to humanize it,” he added. The city will look to comparable competitive sales when applying for funding.

In a summary of outstanding debt, Bubany noted that if accepted as presented, the city would see its debt per capita rise above the set $6,000 limit by $28 in 2015. However, another strategy presented would drop the contingency amount by $6,000 below the typical 10 percent, allowing the city to not breach the threshold. “We drew that line in the sand and I don’t want to cross it,” noted Councilor Mark Honsey, echoing remarks from the rest of the council.

In other news, the city is proceeding with a proactive approach to restoring native prairie and slowing the growth of invasive plant species on Magelssen Bluff and the east Rushford bluff utilizing goats. The method, using intense rotational grazing through a series of moved solar-powered, electric netting-enclosed paddocks, has been used successfully in both rural and metro applications throughout the country and limits the need for expensive machinery and ineffective herbicide application, as well as personnel time involved.

The contractor hired for the job, Driftless Land Stewardship of Bagley, Wis., has used the application successfully in the past and is fully insured by the state for the work. Jaime Edwards, a Nongame Wildlife Specialist for the DNR, has been working to set up the program and anticipates the program will take 150 days, beginning this week, and is scheduled to encompass two years. The bluffs rank highly within the state for diversity of native plant and animal species and the program is expected to increase that status. “This is a rich natural resource,” stated Edwards.

The goats, 63 of which are expected on each bluff, are “browsers” by nature, preferring scrubby brush, leaves, bark, saplings, and seedlings, as opposed to grass and other plant material. The goats will be sent through paddock areas for an anticipated 20-30 days. By doing this repeatedly, invasive plant species will be set back in growth and native plants will be stimulated. Future prescribed burns will carry through remaining areas, preventing reestablishment.

“I can see restoration of the native prairie, but the real hidden agenda is rattlesnakes, right?” asked Councilor Vern Bunke. “My concern, with a concerted effort to tourism, is getting people into the bluffs. I think it’s counter-intuitive to create a somewhat hazardous situation for those who want to hike, go birding, camping. I can see taking it back 100 years to what it was; quite unique,” he continued.

Edwards disagreed with Bunke, citing no spotted Rattlesnakes on Magelssen Bluff, but a large den on the east Rushford bluff. “Eliminating the brush actually helps reduce encounters,” she stressed. Restoring the native prairie, while not increasing snake numbers, will actually keep the snakes from meandering about the bluffs, as their habitat is improved.

All affected land owners have been contacted and the site for the bottom end of the fencing paddocks has been flagged, allowing a buffer between the fencing location and resident property lines. The goats, Spanish Boer and Kiko breeds will be adult does and immature wethers. Edwards noted that the contractor has had little problem with the process and that most calls for concern are over animal safety and welfare, such as water or perceived injury or fighting. “Usually, they’re not a used to farm animals.”

Water will be brought to the location and the contractor will be on site the first week to deal with potential issues. After that, a local person will be hired to check fences and animals. According to Edwards, the goats rarely escape the enclosure and when they do, they go up and not far, as they stay near their food source and herd.

If land owners see flagging on their property and do not want goats in that area, they are advised to contact Jaime Edwards at (507) 206-2820 or Jaime.edwards@state.mn.us to have flagging/fencing moved.

The next regularly scheduled council meeting is Monday, June 9, at 6:30 p.m., at city hall. The public is encouraged to attend.

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