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Rushford Council works toward June 6 flood loan deadline

Fri, May 30th, 2008
Posted in Government

The final date for approving business flood recovery loans, June 23, is fast approaching, and, as the final stop on the loan approval train, the Rushford city council is feeling the pressure of the looming deadline.

And since the actual report is due to the state on June 23, that means the final deadline for applications is set at June 6.

There are two ways of looking at the current situation: on paper, the loans distributed to date and projections for future loans appear to be a higher number than dollars available. The infamous "spreadsheet" of loans and projections shows a deficit of $209,714 from the original $17 million. So if that is the case, why would the loan committee, EDA, and council continue to approve new loans and additions to previous loans?

That's how it looks on paper.

By reading between the lines and knowing the procedure and participants well, as city administrator Windy Block says he does, one can be assured that in fact, the city will probably end up with a surplus of funds to return to the state.

Some of the funds allocated have been for business relocation costs, which are not likely to be covered by the state unless there's a surplus. So those numbers can be removed from the projections if need be.

There is also a small group of businesses included in the projection who, for whatever reasons, have not actively sought flood recovery funding, but their projected need is still included in the spreadsheet.

The problem with going by "what's on paper" is that it could mean flood damaged businesses applying for "round 2" funding, or those applying for additional loan money to improve existing businesses might be delayed during the wait for businesses who still might apply. What if those businesses don't end up applying after all? Then nobody gets the funding, including those who truly needed and correctly applied for it.

The problem with not going by "what's on paper" and instead relying on the best instincts of insiders familiar with the process is that-well, you're relying on instinct and ignoring what's in front of you in black and white.

For the most part, the council opted for instincts and optimism, approving 15 loans and additions to loans.

Laura Deering expressed her discomfort with going against what she saw "in black and white" in front of her (the projected deficit on the spreadsheet), and consistently voted opposed to any loans or additions that came in officially as "Round 2", and any that involved Category 2 loans (no direct flood damage-money for business expansion.)

Deering explained that she felt the city owed it to the constituents to wait until the June 6 application deadline to allow for potential first-time Category 1 applications before approving Round 2 and Category 2 loans.

Receiving approval on loans or additional amounts were the following: Valley Veterinary Clinic, Masonic Lodge #69, Larry's Carpentry and Lock Service (Larry Johnson), American Legion, Pam's Corner, Variety Plus (in former Dollar Store location), G.S. Woxland, Hammell Equipment, Rushford Foods, Rutgers Real Estate, Farmer's Co-op Elevator, Abundant Life Fitness and Massage (relocation and transfer of recovery loan for Evavold Law Office), Rush Creek Limited (Lessers), Wilkeymeyer Daycare, Mike & Heidi Halvorsen daycare.

Loan approval to Plumbing Services (O'Laughlin) was tabled pending more information regarding a home business permit.

John Stewart of the BDM engineering firm was present to report on the two bids received for the construction of the new Well #5. The low bid of $278,302 from Mineral Services Plus LLC was in line with estimates from BDM and FEMA, and Stewart recommended approving their bid. Council approved.


City attorney Scott Springer was present to discuss the next unpleasant task in flood recovery: condemnation procedures on hazardous properties that have been left unrepaired and in some cases, wide open to the public.

Springer reported that he didn't have to come up with a procedure since the state legislature provides statutory guidelines. Basically, the city needs to procure a letter from a building inspector stating that a property is hazardous and listing the measures that must be taken to deem it non-hazardous. The city notifies the property owner who then has 30 days to take action on the property before it becomes the responsibility of a local government.

Block said that the city staff would move ahead and likely have two properties at the next meeting on which the council would consider taking action. Other Business

• The council approved zoning change requests to allow Featherstone Farms to grow produce on the new school property (vine crops like melons) and on some land at the airport (cabbages). Jack Hedin of Featherstone Farms was present to explain that his business lost a lot of land to the flood, but that he hoped in a year or two to be back at the "home farm."

• The R-P Booster Club donated $500 for the Summer Rec Program, $850 for the Library's Summer Reading Program, and $250 to the flower basket fund. The council accepted the donations and officially thanked the group.

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