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Rushford flood loan requests exceed funds


Fri, Jun 13th, 2008
Posted in Government

There's not enough money left in the flood recovery bucket to meet all outstanding requests; that was what the Rushford city council learned at its June 9 regular meeting.

The news came after Mayor Ladewig acknowledged the city's concern and empathy with residents in other parts of Fillmore County experiencing the effects of recent flooding.

Rushford's flood recovery loan application deadline had been the previous Friday, June 6, and nearly twenty previously unsubmitted requests came in. Loans already approved are a "done deal," but now the council will be faced with having to somehow prioritize this final group of loans, if all are approved by the loan committee and EDA; the two groups have set a precedent of usually approving all loans that have paperwork in order, and then passing them onto the council for final approval.

A philosophy supported by council member Laura Deering of allowing equal opportunity for every flood damaged business to meet the June 6 deadline has frequently clashed with an "early bird gets the worm" philosophy endorsed by city manager Windy Block and, generally, the rest of the city council.

The previous two weeks had produced a "flurry of activity" (among loan applicants), resulting in the fund "projected to be close to $500,000 in the hole!", according to Block's weekly newsletter.

Block did admit early in the meeting that apparently his "math was a little off" when, in the previous meeting he, in his words, "spouted off" a prediction that the city would, in the end, be giving back approximately a half million to the state. If all loans currently in play are approved, this prediction would be about a million dollars off, which doesn't likely trouble Block since his stated belief has been that it's far better to spend all the recovery money than it is to send any back.

Deering, who has consistently warned the council against exactly the predicament in which it now finds itself, didn't appear to feel any joy in being "right". When councilman Larry Johnson asked Block, "So, now we're approving things in the negative (fund balance)?", Deering turned to him and said quietly, "Yes, we are."

Eight loans came before the council at this meeting, many of them "added needs" loans for businesses previously approved, but two were brand new.

One of those loan requests, although small, was unusual and received a lot of discussion. RINTek (Rushford Institute for Nanotechnology), already a recipient of a half million dollar loan to develop its business, requested $16,000 in a forgivable flood loan to replace the floor of its current location, which happens to be the basement of the city hall.

Deering, Johnson and Nancy Benson all had questions about this loan. The practice has been that landlords have applied for funds for damaged buildings, not renters.

"As the landlord, shouldn't the city be applying for this loan?" asked Deering. Block said that the city, as a municipality, was not eligible to apply for business flood recovery loans.

Deering's expressed belief throughout the process has been to push for consistency, and she could think of no other business renters who'd applied for and been approved for flood recovery.

Kevin Klungdvedt of RINtek was present. When asked whether he had any comments, he declared, "We're just trying to get you a new floor. It seems pretty clear cut to me."

Klungdvedt and partner Dan Fox of RINtek have not gained a reputation for patient and cooperative tones of voice when discussing RINtek's needs at council meetings. Klungdvedt muttered disparagingly at Deering's negative vote on the matter, even though her lone "no" vote still meant that the $16,000 flooring loan was approved.

Other loans approved at this meeting included new loans for Nordby Jewelry, Plumbers Services (O'Laughlin), and added needs or Category 1-A loans for Rushford Hardware, American Legion, Darr Junction Plaza, Tri-County Publishing, and Reliable Pest Management. All the loan applications from the previous two weeks, the final group, will be decided at the next council meeting, June 23.

Trailer Court

The purchasers of Bluffview Trailer Court, Henry "Stumpy" Becker and Mike Hammel, now known as the H-Boys LLC, were present to seek the council's support in their hope to be grandfathered in regarding zoning and things like setback codes as they attempt to rehab the park that was damaged in the flood.

According to Scott Springer, city attorney, the matter is ultimately a legal one determined by whether the damage incurred was less than 50% of the market value, which appears to be the case. The council voted unanimously to support the new owners in their efforts to be ruled by previous codes.

Library

Librarian Susan Hart was present to explain why the library would be paying approximately $27,000 to a professional fund-raising group out of Winona to help secure funding for the new library. According to Hart, the group has an impressive success record.

"Working conditions (in the library) have passed the limits of tolerance," Hart said. "We're moving forward."

In a related issue, the council acknowledged the passing of library board chairman, Dennis Lockwald. Mayor Ladewig proposed that the city draft a letter of gratitude to the Lockwald family for Dennis' service to the city. Deering recalled that Lockwald was instrumental in bringing internet to town in the days following the flood.

The council approved and welcomed Bonnie Prinsen to the library board to serve out the rest of Lockwald's term, which ends in December.

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