City of Rushford staff recently discovered a neglected notation in the schedule for the 2016 Project that provides a surprising reduction in the city’s proposed levy for 2017. The new find will allow for a reduction in required debt service levy and will amend the levy increase needed from 8.19% to 5.3%. The total savings is $31,000.
City Clerk/Treasurer Kathy Zacher and City Administrator Tony Chladek recently met with financial consultant Mike Bubany, of David Drown Associates, to go over long-range financial planning for the city. During the meeting, upon review of a payment schedule for the 2016 Project and Crossover Refunding Bond, it was determined that a transfer from utilities to offset the levy needed to make payments was not noted.
“The page was wrong on the transfer in from utilities. It wasn’t delineated on the payment scheduled,” said Zacher at the Tuesday, October 10 council meeting.
By including the transfer in the schedule, city staff was able to reconfigure the percentage of debt service levy for 2018. It was projected at the September 11 meeting that in order to meet debt service repayment; the city would need to potentially raise the levy to $938,000, a $71,000 in value, over the 2017 figure. It was noted in preliminary projections that while operating expenses could see a 20.81% reduction, debt service would increase 29%, yielding the initially proposed net 8.19%.
Now, the city is able to take the majority of the transfer amount, $26,000 and apply it to the schedule, thus reducing the amount needed to levy to cover debt service. The remaining $5,000 will be applied to the Airport Fund.
“We’re just waiting for the assessor’s numbers to come in and then we’ll readjust for the final levy,” added Chladek.
In relation to the Airport, the $5,000 was added to show commitment by the city to the Federal Aviation Administration (FAA) and the state. The Airport Commission recently met and went over long-range planning goals for the airport. While the majority of projects see a large input of either federal or state funding, the city must show some level of financial commitment for its share to the agencies in order to secure grant funding.
The majority of projects are carrying over from previous planning. Feasibility analysis and secure funding, largely from the federal and state grants, will come prior to any projects getting underway. Some projects, such as those that produce a revenue stream, are formulated differently, but all require some sort of city matching. “In order to receive funding, we have to have it on the list,” acknowledged Zacher.
The council also took a look at a recommendation from the Airport Commission to approve a new, five-year contract with engineering firm Mead & Hunt. Per FAA guidelines, the seek must seek requests for proposals for engineering related to the airport every five years. The city has been with Mead & Hunt for several years.
Two proposals were received; one from Mead & Hunt and one from Bolton & Menk. After review by the commission, it was recommended that the city stay with the former.
“We have a history with them. They already know our facilities and they really go the extra mile,” said Mayor Chris Hallum when asked for supporting documentation for the recommendation.
“With FAA requirements, money can’t be a deciding factor,” noted Zacher. “There was no compelling reason not to stay with Mead & Hunt.” The council approved the item unanimously.
In other news, the city has set November 13 as the date for a public hearing related to final assessments for the 2016 Municipal Improvement Project: Hillcrest Drive and South Burr Oak Street.
“Everybody’s assessments were less than the preliminary,” noted Zacher. Final assessments fall within the city guidelines for assessments as a portion of the total project. The assessments will be applied to property owner’s taxes over a period of ten years at 3.5% interest. Property owners have the option to pay all of the assessment, or a make a one-time lump sum payment, prior to having the assessment applied.
The council also approved renewing the one-year contract with Darr Auction & Realty for the purposing of marketing seven available city lots and the former municipal liquor store building. The current contract was scheduled to expire October 15.
The partnership has seen quite an uptick in interest in city properties, including 23 documented inquiries, showings, and offers. According to Darr, the cost and assessments on the Himlie Business Park lots continues to be a hurdle. Additionally, protected bluff area and a natural gas line easement have thus far prevented the purchase of the lot at 1300 Himlie Drive for the purpose of multi-unit housing. Some discussion was had on revamping lots to reduce the size of some and add land to move buildable land away from the gas line. Rezoning of the lot classification would be required, however, to amend the lots.
“One issue is affordable housing and using land as efficiently as possible,” said Darr. “I do feel encouraged by the amount of interest that there is.”
“The exposure is definitely happening,” added Councilor Terri Benson. “We should take the feedback and make adjustments. Our goal was to get activity on it. That hadn’t happened in a long time. The action part is still a work in progress.”
“Prior to this, we wouldn’t have had this kind of traffic. It’s definitely a benefit,” added Administrator Chladek.
The council also went into closed session at the meeting to discuss an offer to purchase the former municipal liquor store at 409 S. Elm Street. Realtor Rod Darr, of Darr Auction & Realty, was on hand to discuss offer details.
Upon close of the meeting, Clerk Zacher confirmed that no official decision was made by the council, but that Darr had directed the council to discuss a counter offer. “The sale would be contingent upon getting proper approval/paperwork squared away with the State of Minnesota as bond proceeds paid for a portion of the original building with Federal Emergency Management Agency funds,” said Zacher. The proposal that was made requests an answer by October 24. Due to the closed session, Zacher could not verify who made the offer to purchase.
The next regularly scheduled council meeting is Monday, October 23, at 6:30 p.m. at city hall. The public is encouraged to attend.
Leave a Reply