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Rushford council sorts out aid issues

Fri, Sep 28th, 2007
Posted in Government

By Bonnie Prinsen & Tom Driscoll

RUSHFORD - "We've heard from so many entities about our unique unity as a community," said Council member Nancy Benson at the regular meeting of the Rushford City Council last Monday, Sept. 24. "Money should not now tear us apart." "We need to remember we're still all in this together."

Benson's comments came during what is becoming a regular and dominant feature of council meetings here: the flood update. On the agenda for this meeting was a resolution giving Mayor Les Ladewig and City Manager Windy Block the go-ahead to begin the application process for state flood relief money, and the authority to sign agreements in the city's name.

Chuck Pettipiece, the consultant hired to assist with the flood relief dollars, said that the resolution would help "cover all the pieces" to the complex application puzzle with which the city is now faced. The resolution passed unanimously.

Looming largely unspoken in the room was the week-old news that with the involvement of the Department of Employment and Economic Development (DEED), the nearly $160 million relief package suddenly looked quite different than what some thought was the original spirit of the bill. Specifically, businesses learned that they would only receive thirty percent of the aid in forgivable loans, and there was ultimately no talk of outright grants.

Discussions and negotiations with DEED brought thirty percent up to fifty, but some still felt dissatisfied with the formula and worried about the future of business in the region.

Mayor Ladewig, however, expressed his dismay that word had spread through the press that "Rushford is dissatisfied" with the proposed implementation of the relief package. Sounding a little like a scolding father, Ladewig said, "we certainly don't want to receive the biggest aid package ever offered in this state" and seem ungrateful."

"We're grateful as God's green apples to have received this award," he stated.

And yet, having been told by a number of sources, including State Senator Sharon Ropes, that the city has every right to ask for different conditions for the aid distribution, such as more than fifty percent in forgivable loans, not everyone in the community is willing to concede that gratitude for the fifty percent is in order.

Pettipiece confirmed that the city could "certainly ask for more" than the fifty percent, but he was pessimistic about the chances for success, as the state would then have to approve the city's request. Pettipiece said that it would be "an uphill battle to set it (forgivable loans) over fifty percent." Pettipiece suggested that asking for more would slow the whole process down, because it would trigger the state to request more detailed information.

The local EDA was meeting the following morning to look over possible guidelines for the application process and eventual distribution of funds; the EDA was also expected to make a recommendation on whether the city would request more than fifty percent in forgivable loans, which the council would then take up at a Special Meeting Thursday, Sept. 27.

At the Thursday Meeting

At the special Council session on Thursday evening, Pettipiece explained that on Tuesday morning, the EDA had approved the basic "MIF structure" of Rushford's common application to DEED for disaster recovery. Flood-aid to local businesses will come from MIF, the Minnesota Investment Fund.

"I've been in contact with deputy commissioner of DEED, Paul Moe," said Pettipiece. "DEED recognizes that businesses have a better handle on their own needs. But to move the process forward, let's submit a common application with the total-dollar request. Get approval. We'll leave out the details of our procedures."

The "procedures" Pettipiece referred to on Thursday comprise the details of forgivable-and-repayable loan share, that is, the proportion of low-interest loan to be paid-back to the State or paid-into a City account for future economic development.

"Let's leave that whole area wide-open in the common application," Pettipiece advised. We need better information on the affordability of individual businesses to take on additional debt," he concluded. "We need to get our surveys back, and businesses need to complete their applications to the SBA. And we need to get that data to DEED."

After polling the Council for consensus, Mayor Ladewig added, "We support the request to submit the common application in to DEED. There's a pot of money available. It's most important now to get the application in."

Back to Monday's Meeting

City Attorney Terry Chiglo asked permission to pose a question. "As a business owner, and not as your city attorney, I have a question." Chiglo wanted to know the definition of the word "grant," as it had been bandied about during the flood relief process, but no longer seemed to be in official use.

"To me, a grant is when you meet certain criteria, and they say 'here's your money,'" Chiglo explained. But to Chiglo, it seemed that now the talk was always about "forgivable loans" and recently, he hasn't "heard anything about grants."

Block told Chiglo several times that his question was, "not in the right order" of the entire process. But Chiglo was persistent.

Ladewig said, "The word 'grant' is missing by design," in the language of the resolution, but added that it wouldn't necessarily be "missing by implementation."

"Is a forgivable loan the same thing as a grant?" Chiglo asked.

Pettipiece offered that a loan that's forgivable after five years essentially "becomes a grant after five years."

Council member Laura Deering asked whether Pettipiece could bring a list of definitions to the next morning's EDA meeting so that everyone could "be on the same page."

Long Term Recovery

Council member Deering has taken an active role in long term flood recovery for Rushford, and had several suggestions to make from a recent meeting with a long-term recovery expert.

Regarding the Rushford Relief fund that has been growing at the Associated Bank, the council decided to begin the distribution process by going through donations and pulling aside any that were designated for certain groups in town, such as police.

Of what remains in the fund after designated donations are removed, sixty percent will be distributed to those with the greatest need. The other forty percent of what remains will be reserved for "things that may come up in the next 60-90 days," suggested Deering.

Deering also suggested the idea of hiring a director with experience in disasters and long term recovery to navigate the city "through pitfalls others may have encountered" in areas like fund distribution. An advantage would be that this person would be "from the outside, unbiased, and could bring that objectivity to the table," Deering said. The council listened and did not take action.

Other communities in the region will meet with Semcac on Oct. 5 to develop a point system for distributing their local funds. Deering suggested that the council adopt the same point system. In her opinion, to just give anyone who's filed somewhere for flood relief an equal share of the local fund would not give anyone "a significant amount."

Included in the council's motion about the relief fund was the stipulation that they would follow the advice coming out of the October 5 meeting to begin fund distribution as quickly as possibly.

Chiglo suggested that it might be time for the city to step out of the fundraising business and turn the job of collecting donations over to a local 501c3 organization like the Rushford Community Foundation.

Residents are moving into fifteen FEMA trailers, in Brooklyn, and thirty-four more are being brought to the Larsen Lane area in the industrial park. The trailers will be available for 18 months. Block informed the group that it will cost approximately $93,000 for road, sewer and water in the undeveloped area. Tri-County Electric estimates an additional cost of $35,000-$40,000 for electrical service, part of which may be recoverable if the co-op can remove and use the equipment again after the eighteen months.

Other Business at

Thursday's Meeting

• Rushford Village requested a meeting to discuss outstanding sewer and waste treatment issues.

"We're back to where we were about a year ago when we last talked to the Village about this," stated administrator Block. After discussion of additional outstanding issues, like police protection, the Council unanimously approved a resolution authorizing the Mayor to draft a letter to the Village outlining out the City's position.

• Municipal Liquor manager Johnsrud has contracted with a consultant for approximate cost of $6000 to conduct a market survey. Results will be available in 2-6-weeks.

• As a result of the flood, the City has approximately $300,000 of outstanding bills to pay. City Clerk Kathy Zacher explained, "We need to pay people who perform services. I've gone over these bills with FEMA. Our request for reimbursement will go up-and-down the chain, and we should be paid in 3-4-weeks." Council unanimously approved paying the bills prior to FEMA reimbursement.

• Council member Benson asked about the draft procedures for demolition of structures. Block replied that concerns about fraud were being addressed in the draft, which he expected to be ready for the next regular Council meeting scheduled for Tuesday, Oct. 2.

• Monday, Oct. 1 is final day for curbside pickup of flood debris. Afterward, collection and disposal will be the responsibility of individuals residents and businesses.

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