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Post-Flood and economic stress a concern at Rushford City Council Meeting


Fri, May 15th, 2009
Posted in Government

Going in circles at times, the Rushford City Council meeting on May 11th brought forth concerns from community members looking for understanding on proposed public utility improvements. Projects are slated over a 10-12 year period, depending on financing and assistance available.

Phase 1

Taking the spotlight, the "driving force" behind Phase 1 is the condition of current waterline pipes and the availability of Minnesota stimulus funds. A portion of the city is using century-old pipes with immense buildup and lead portions posing a health risk to the community. With help from the stimulus, the city could acquire funds that would account for 20% of the replacement cost of the sand-cast pipes. The drawback being that in order to qualify for funds, the city needs to be "shovel ready" by August, 15th. If not, the funds would go to other projects in the state, leaving the city and its residents paying the initial estimated cost. As project engineer Dean Otomo stated, "The stimulus has changed the schedule."

To partially fund Phase 1, the city is proposing a special property assessment. There is no current assessment policy, but according to City Administrator Windy Block, the portion paid through assessment to property owners hovers around 30% of the total project cost. Phase 1 has an estimated cost of $3,192,515.00 with an estimated assessment cost to property owners of $755,054.00 (23.65%). Block stressed that the total cost "could be driven down substantially" through funding from grants, special assistance, and reductions in actual contractor bids. It was noted that recent comparative bids have been 30-40% lower than the estimates from Otomo.

The cost will be assessed to the property owner over time. The upgrades will be calculated as follows:

• Water main and sanitary sewer are calculated on a per service basis.

• Storm sewer cost not being assessed. However, a user fee on monthly bills will be considered.

• Street restoration costs are to be calculated on a per foot (linear frontage) cost.

There was obvious frustration from community members from the lack of a final amount due to property owners. Block reiterated that it's "hard to calculate due to outstanding efforts to secure special assistance" that would potentially decrease the assessed amount.

It seems clear that the first phase of the project can be no longer put off with both members of the council and the community acknowledging that the issue has carried on too long. "If we don't do it, we'll continue to watch it deteriorate," said Block.

A detailed progression of all phases is available at city offices.

Phase 4 - Himlie

Business Park

The topic of much conversation around Rushford, the council tried to iron out any wrinkles in its proposal, but was met with more community concern. Unlike the other projects, the Himlie Business Park is not a 70/30 assessment (30% approximate property owner assessment). If parcels do not sell to an investor, the net effect could be increased tax for property owners to recover some of the money.

Community members pointed out that "the city seems to be willing to spend on if we 'build it they will come.'" In a typical construction process, 75% of the money is committed by a developer prior to building. The city's "gambling by building something where only a fraction is committed." It was also noted that "the EDA is the developer in this case," not a private entity.

Mayor Ladewig's stance was that the city was taking initiative, such as in previous industrial developments. Community members were quick to point out that previous developments were "pre-flood and pre-economic stress."

Former mayor Ted Roberton advised the council, "Phase 4 should be delayed until all property owners are fully aware of what's entailed. It's not an appropriate time to spend this money."

Block responded to the concern "The city is searching for funds to mitigate the cost to citizens. There is stimulus for new industrial area to be developed. Take advantage of that or let it go. I believe costs will never be less than they are now. This point needs to be considered strongly."

Roberton responded, "I'm not against the idea of new business, this just isn't the time to do it. The economy has everyone on edge."

Before closing discussion on Phase 4, Ladewig read a letter from proposed hotel developer Tom Serie indicating that he intends to step back for a time to allow the city to review the project.

Proposal for downtown hotel

Community member Daryl Thompson presented information from an ongoing project by downtown businesses to keep a hotel and/or banquet complex in the heart of the city.

Thompson represented a "driven and inspired core group" that has made significant progress in the endeavor. He informed those in attendance that two sites, a preferred and an alternate, have been located and that both sites have good visibility, sizeable lots, and existing utilities.

The group, representing 43 downtown businesses, has also gathered financial support from those willing to make an investment in the community, not the profits. The group already has considerable financial commitment and if enough cash flow is generated, the project will continue. Once the set financial commitment is met, education and hypothetical planning can commence, including the footprint and configuration. The underlying goal of this effort is to have the structure downtown where it can support businesses and they can support it.

Community Education

The city park and recreation program (excepting aquatic) is dealing with a liability issue in its 2nd-7th grade summer programs. The issue stems from the lack of funds to set up licensed, insured transportation. Block informed the council that "it is not in good conscience to sponsor the current program setup." The decision has been deferred until after a parents' meeting scheduled for May 19th. Community education has taken over the summer recreation program for children under 2nd grade.

Community Development

The council voted unanimously to approve two recommendations from the EDA regarding flood recovery loans.

Category 1 flood recovery assistance from "Witt Long-Term Care Pharmacy Building" will be transferred to the "Nordby Jewelry Building." In addition, the vote confirmed that no flood assistance will be used in the demolition of the former Witt building.

H-Boys, Bluff View Trailer Park have asked for a reinstatement of unused funds, if they become available. The funding would allow for the construction of three storm shelters for residents of the mobile home park.

Three volunteer board positions are still available with the city; the Municipal Electric Board and the Tree Board. Interested persons should contact city hall.

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