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Rushford Council meets with auditors


Fri, Aug 1st, 2008
Posted in Government

RUSHFORD - The July 28 meeting of the Rushford City Council was eerily close to "business as usual" for this group that has been accustomed to dramatic, often difficult decisions over the past year.

Thomas Wente from Smith, Schafer and Associates, Ltd, the city's auditors, made a presentation on the recent audit.

The bottom line seemed to be that financially, the city is not in as bad of shape as it could be given the year it's had, and that Rushford is not immune to typical small town issues, such as its limited "ability to effectively segregate its accounting duties and to prepare annual full disclosure financial statements in accordance with generally accepted accounting principles."

The auditors commented that "it would not be practical for the City to devote the resources required to overcome this limitation."

The other potential weakness noted by the auditors is the lack of "a formal policy on the level of unreserved fund balance that should be maintained in the general and special revenue funds as recommended by the State Auditor."

The council approved a letter written by the auditors to the IRS on the City's behalf requesting a ruling on the forgivable loans. Specifically, the city is requesting that the loans "be classified as nontaxable contingent payment loans to the qualifying business."

The letter also asks for a ruling stipulating that the loan proceeds "are not includable in income under Section 61 as gross income does not include the receipt of loan proceeds."

Finally, the letter asks that since the loans should be classified as nontaxable contingent payment loans, that there be no information reporting requirements.

Standing water

Jerome Gudmundson presented an informal petition signed by approximately a half dozen of his neighborhood. Because of rapid development in the Pine Meadows and Tyrol Hills areas, storm water collects in the low spot of the "old" school property, directly across the street from Gudmundson's, causing significant seepage into his dwelling and those of many neighbors, according to Gudmundson.

City Engineer Dean Otomo did an informal preliminary report that stated the cost of an open ditch (on the school's property) would be approximately $177,000.

The big question, according to city administrator Windy Block, is who would pay for that project.

A drainage study was done by Bluff Country LLC in 2003 when developers Mike Sexauer and Richard Holle were considering a sub-division on the property northeast of the school property.

In a letter, Sexauer had requested that the city broker an agreement with Richard Holle and R-P School for cost sharing for any future development those parties may have. Minutes from December 2003 show the council voted to acknowledge receipt of the letter, but to decline any involvement in facilitating any agreements between these three parties.

Minutes also show that a joint meeting was going to be held with the School, Sexauer, Holle, City and Village about the drainage issues and future plans.

Holle eventually decided costs were too high for infrastructure to create the housing development and sold the land to the school district, the current owners of that land.

But Block also stated that he doesn't believe the issue is entirely the school district's responsibility, either.

The council directed Block to initiate a discussion with the school district on the matter.

Other Business

The council:

• approved zoning recommendation variance requests for Janel Crawford (upgrade a one-car garage to two) and Terri Mathison (new backyard deck).

• accepted a $6,656.86 donation from the LaCrosse Rotary Foundation, Inc., to the Rushford Ambulance Service.

• met for a work session immediately following the regular meeting for the purpose of learning and asking questions, with no official actions anticipated. The work session was treated as a public meeting.

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