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Rushford council listens to rental housing plan

Fri, Jun 30th, 2006
Posted in Government

RUSHFORD - I came to educate, was how Tom Serie, president of F&L Management and Development of Luverne, Minn., described his job at a joint meeting of the Rushford City Council and the EDA prior to the regular Rushford Council meeting on June 26. After detailing the history of his development company, Serie explained how the Essential Function Bond program works.

Serie enumerated the perks of the program: bonds issued by the EDA would be Federal income tax free and would allow a much lower rate; there would be no real estate taxes on the buildings as long as they are owned by the EDA; the EDA could pay five percent of the rent in lieu of taxes. He told the group the projects pay for themselves at no cost to the city.

F&L builds needed units that the private sector cant and will not build; units are sold to a private owner as soon as possible after construction. Calling the units senior friendly, Serie said typically senior citizens move into the units, selling their homes to young families with children who then attend the local school. The units are not, however, low income housing; anyone may rent them. Serie estimated the units would rent for $970 per month.

A housing needs study included in the project costs is always completed before any development occurs. After the study, the EDA would need to make the decision if they wanted to proceed and whether they wished to hire F&L. If chosen as the developer, F&L would look at available land and select the location. F&L would also conduct public meetings about the project to keep the entire community informed

F&L identifies local contractors and gives them the job if their bids are 105 percent of the low bids. The units built by the firm follow basic floor plans with dual fuel electric heat, wood floors, extra insulation, and sprinklers systems in lawns. Serie informed the group he would be comfortable building sixteen units in Rushford. F&L guarantees the rental of the units and charges a set fee of $32,000 for a fourplex ($8,000 per unit) for its work.

Claiming to have never had a troubled project, Serie shared a long list of projects F&L has been involved ina total of 152 projects located in Minnesota and North and South Dakota since 1991and encouraged Rushford to check with other towns to see if they were satisfied.

Pointing out that a one percent increase in interest rates would result in an additional $64 per month for each unit, Serie urged the group to hurry their decision. Closing his presentation, Serie declared, Once you lose elderly people to somewhere else, theyre not coming back! He added that they take their savings accounts with them as well.

Sewer rates

After tabling the issue on June 12 to have consulting firm BDM rework their rate suggestion, the council followed BDMs bottom line recommendation for the city sewer rates. Sewer rates will increase by approximately 20 percent with city sewer rates set at $23.28 for 2006; thereafter a three percent yearly increase in rates will be necessary. Rates for Rushford Villages South Rushford sewer users will go from $10.63 to $19.20 for 2006 and will also have a three percent increase each following year. City Administrator Windy Block told the council that the citizens of Rushford have been subsidizing the South Rushford customers lately. If the rates there had been comparable, the sewer fund would not now be in the red. According to City Clerk Kathy Zacher, South Rushford has had some increases over the years, but the formula has changed since the agreement between the cities. Now, 85 percent of costs come from the sewer plant and 15 percent from the collection system.

With the new rates in place, approximately $2.8 million may be accumulated by 2027 toward the construction of a $7-8 million new sewer plant, depending on upkeep expenses through the years. The new rates provide for planned system improvements in 2007 and 2017.

Various sewer connection fees were checked by BDM as well at the request of the council. After the council learned a $3,000 connection fee would only make a few years difference is getting the fund out of the red, they opted to go with a more conservative $1,000 connection charge, deemed middle-of-the-road by BDM. The new rates will go into effect July first.

Fire Department

Assistant Fire Chief Paul Engrav appeared before the council to request approval to prepare bid specs and advertise for a new fire pump truck. The fire department is interested in getting bids on a 5-man cab, 2006 demo model which will probably cost $200,000. Funding for the truck will be split between the city and the townships. The council approved the process; Engrav will prepare the specs within ten days, bids will be opened July 19, and the matter will be brought back to the council at the July 24 council meeting.

The fire department also requested permission to build an addition on the front of the fire hall meeting room to store and display the refurbished antique 1924 fire truck. The non-heated space would have two large windows to display the truck and a garage door to the south for access. All current landscaping would remain in place; Construction Management has already approved the plans. The fire department has $13,000 in its building fund; private donations have already been coming in to help. The council okayed the project with a cap of $25,000. The fire department will need to get two quotes before proceeding.

Other business

In other business the council:

renewed its contract with City Attorney Terry Chiglo for another year;

learned the Rushford Police department received a $480 grant funding compliance checks for year #8 from the Department of Alcohol and Gambling Enforcement (Department of Public Safety);

set a public hearing July 10 at 6:30 regarding the amending of zoning ordinance dealing with conditional use permits for home based businesses;

okayed spending up to $7,000 on electrical system up-grade long-term planning by Tom Nigon of PowerPlus who would utilize and build on previous plans;

acknowledged donations from the Lions of $900 for large print books for the library and $1,000 for summer rec program expenses;

decided to request conveyance of the tax forfeited property adjacent to Lamplighter Lane (south of the street) to the city of Rushford for public use;

selected Laura Deering as the replacement council member by a coin flip after two tie votes (Other applicants included Dennis Lockwald, Vern Bunke, and Herb Highum.);

after closing the meeting for a review of performance evaluations of City Administrator Windy Block, reopened the meeting to present the council consensus that Block has performed above expectations and set his base salary at $58,000.

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