Harmony council approves sale of Heritage Grove
Wednesday, June 26, 2013 4:30 AM
At the June 11 Harmony City Council, the city-owned senior housing complex Heritage Grove, was approved to be sold to 3 Rivers Properties, LLC.
Mayor Steve Donney said the Harmony Economic Development Authority had been looking at the sale of the facility for months and up to a year.
Councilmember Jim Bakken said it looked like a pretty good offer. "I think it's time to cut our losses and move on," he shared.
City Administrator Jerome Illg said the city can't know what future years would bring in opportunities.
The purchase agreement saw the facility sold for $2 million. The city, however, has $2.5 million in outstanding bonds attached to the facility that can be required to be paid beginning Dec. 1, 2016. The city's financial advisor, Mike Bubany of David Drown and Associates, explained to the council how it could handle the $500,000 in shortfall.
The city will now be able to collect property taxes on the now privately owned Heritage Grove at approximately $25,000 each year. Bubany explained the city could forego receiving the property taxes for 20 years and pay off the shortfall through taxable General Obligation Tax Abatement Bonds. Interest generated through an escrow account wouldn't be enough to pay off the higher shortfall interest rate. Bubany said the city could levy the difference at around $14,500 per year. Prior to the sale of Heritage Grove, the city had been subsidizing it $40,000 per year, so there would be a decrease in the overall tax levy.
Mayor Donney brought up that the city could use its reserves to decrease the amount of time interest could be gathered on the debt. He explained the city could do a shorter abatement and replenish the city's reserves from the facility's property taxes.
After the meeting, Illg explained the city was moving toward using $250,000 of its reserves and selling tax abatement bonds for the other half of the debt. A public hearing was approved to be held on the use of tax abatement bonds at 7 p.m. on Tuesday, July 9, at City Hall.
An update was given on the First Avenue SW/County Road 35 project. Councilman Gerald Shuck said most of the curb would be replaced since it would be cheaper to do the whole thing instead of it in separate pieces. Shuck also mentioned that Third Street South may undergo a full depth reclamation. These projects are being completed through the county and Shuck said a few details are still being figured out with them.
The council also looked at a plan for a Fourth Street NW bituminous patching project. The project is located by Kwik Trip, which had let the city know that it would be willing to share 50 percent of the cost. It will cost the city around $16,000 to do a three-foot wide patch on the north part of the street and an eight-foot wide patch on the south portion. A 26-foot by 30-foot patch will also be completed just south of the street.
Illg explained that the city's insurance adjuster reviewed hail damage on several city buildings, including the roof of the community center directly above the gymnasium. He said there were some smaller dents and if rust began to be a problem, the insurance would cover the damage. It was mentioned that damage done to the hoop/salt building and Selvig Park bathroom skylight was being evaluated.
In the Arts Board update, discussion was held on future wood statue carvings done by Stanley "Slim" Maroushek that would be placed around town. There would be a total of five new statues, one of which has already been completed and placed in town. Slim had received a grant to complete three more statues. There was concern voiced about where the statues should be placed. It was suggested that they should be placed in well-lit areas, so as to decrease the chances of vandalism. The Arts Board is communicating with Maroushek to determine the best places for the statues.
The council discussed a policy change regarding garbage and recycling services for people who are not living in their houses for an extended period of time. This discussion was brought up at the May city council meeting when resident Tom Jarland asked the city to not charge residents who move south during the winter.
City attorney Dick Nethercut asked if the council would consider those who have moved out of their houses, but are still trying to sell them. Due to the city's contract with Waste Management, the number of households can only be changed quarterly.
Illg recommended a credit be placed on accounts for those who are gone for three or more months. A resident who was gone for that period of time would be able to sign up after returning for a credit. The council approved the resolution.
Emily Ellis presented new roadside signage the Chamber of Commerce created for the visitor's center. In the discussion that followed, the council also decided to look into installing an ADA compliant door in response to the current door window having shattered from a wheelchair. Ellis also told the council about preparations for Harmony's Fourth of July celebration. There are just 700 buttons for sale this year. Ellis said Morem Electric would be sponsoring a boxcar from World War I for people to check out.
Council members mentioned the grass height of some residents' lawns. Mayor Donney said anything above eight inches is not allowed. He also reminded residents to not mow their lawn into the street.
Council members also asked deputy clerk Eileen Schansberg to provide a copy of the city ordinance concerning dogs to those who come in and get tags.
The council approved the 2013public utilities rates. For an average household that would use 5,000 gallons of water and 100,000 kilowatts of electricity per month, the rates would increase roughly 1.62 percent or $3.60.