Preston council discusses Anderson lot
purchase, updated on Twenty-14 bond
Wednesday, July 09, 2014 4:52 AM
"The Anderson lot sales refer to seven lots in the subdivision located by the golf course. The EDA was instructed by the county that these lots would be coming up for sale through state forfeiture," Cathy Enerson, Preston's economical development authority (EDA) director, announced during the Preston City Council meeting on Monday, July 7.
There are several options available for the city if it is interested in purchasing the property.
First, there is an opportunity for conveyance, meaning the city could purchase the lots for $250, but the land can only be used for public use.
Enerson informed the council the EDA is recommending a second option.
"What the EDA is looking for is the opportunity to increase the tax space and population of the Anderson subdivision by having additional single family homes built there," she said.
Essentially, the EDA asked the council to purchase the property at public auction, so the city would be able to control use of the land.
"Those lots could end up going to neighbors wanting to extend their property, not to discount any of the neighbors, but they would just want to increase their lot size. So the public infrastructure at the site is then not necessarily bringing new population or tax base to the community," Enerson continued.
The EDA did not put a cap on the dollar amount but there is a total of $7,600 in back taxes and assessments owed per lot, so she is anticipating the cost to be greater than that total amount.
The city would also have the option of purchasing the lots before the public auction if it would use it to create an affordable housing type of political subdivision.
Though the EDA has $39,000 in its fund, Enerson confirmed all those monies are currently spoken for, leaving the city to cover the cost of the purchase.
"Why do we want to get in the real estate business? We're spending money pretty fast," Councilmember Robert Maust countered. "Someone will buy them at the sale and so whoever buys them will keep them on the tax payroll."
"When it came to us, we wanted to explore the possibilities and not ignore the situation rather than later wishing we would have looked at this," replied councilmember and EDA board member Charles Sparks.
"Andersons had no luck hooking anybody to build up there, so what kind of luck are we going to have? We've been spreading ourselves a little thin this year already," commented fellow Councilmember David Collett.
After much discussion, the council decided to table the item until more information is gathered from the county and state on the property.
Consultant Mike Bubany of David Drown Associates, Inc., gave the council a good news/bad news update on the Twenty-14 project bonding.
"The good news," he began, "is that the AA stable rating for Preston was reaffirmed. The piece of disappointing news I have is the market moved up slightly."
The bond did receive five bids with Robert W. Baird & Co giving the top bid.
Bubany explained, "Baird doesn't intend to hold this thing. They intend to piece it out and resell it for a profit. Usually what they would do is sell it for a discount...but what they did is, instead of selling it at par, they resold it at a premium. So while the bond was $4.15 million they actually went and sold it for about $78,000 more than what we need. So that means they give us back some of their resale, which is $32,000."
The city did receive a good faith deposit of $83,000, which is two percent of the total bond money.
The council moved to approve the bond sale resolution.
City Administrator Joe Hoffman informed the council that the Utility Commission may choose to assess a portion of the water and sewer improvements needed for the north industrial park development. These services will extend underneath Highway 16 to serve Preston Dairy and Farm and the Gehling development and, in the future, other developments.
"To ensure that if the Utility Commission and city council do wish to assess that project, which in fact we'll need to in order to be eligible for bond amounts, there are a number of resolutions and steps the city must follow," he added.
The first resolution reviewed by the council involved initiating proceedings and ordering preparations on the 2014 north industrial utility improvements.
The council approved this resolution and moved to the next, which highlights the feasibility report and the calling of a public hearing in regards to the improvements.
The council approved this and determined a public hearing will be set for the next council meeting, July 21.
Preston Police Chief Matt Schultz approached the council to discuss an invoice for the LETG software of $3.507.90.
Previously, in September of 2013, the council approved the purchase of this police records management system based on the quotes received at the time with an anticipated cost of $2,350.99.
However, it became clear with this second invoice that the initial payment was only for the setup, while the second invoice is for the one-time payment for the system itself.
"All area departments have the same system. It streamlines the process; if I need to look up information for a background check, it is just a click of the mouse instead of searching through piles of paper," Schultz said of the system.
The council voted to pay the invoice with the police department's forfeiture fund, which normally pays for overtime and training, but noted if the department needs more funding it may come back before the council.
Revolving loan fund
The EDA, represented by Enerson, recommended raising the lending limit of revolving loan fund (RFL) A from $15,000 to $25,000.
She explained that with the percentage of support projects receive from the banks, the $15,000 cap has been a little low in the past few cases, leaving a gap between what the borrowers can receive from the banks and what they can receive from the EDA.
Currently, there are two funds, A and B, A is setup to assist in commercial and improvement funding, while fund B is for business expansion and job creation, according to Hoffman. He noted, to date, no funds have ever been given from fund B.
This increase would be a guideline change, which will come before the council for approval annually.
The council approved the change and moved on to review the loan request for Jones and Bond, LLC.
Owners Justin Jones and Craig Bond requested a loan of $21,250 from the EDA to aid in the purchase of equipment and inventory from the former business, Preston's Service Plus, which they recently purchased.
The council approved the loan amount and conditions.
CUP for Nehemiah Services
The Rev. William Edwards addressed the council to request the approval of a conditional-use permit for the Preston United Methodist Church.
"What we are is a licensed out-patient treatment program. The group or individuals would be meeting primarily on Sunday afternoon after church services," he explained.
Edwards had been contacted by social services and corrections to provide services in Fillmore County as he has in Dodge County. The church wrote a letter of support to the city on behalf of the opportunity and Edwards.
The Planning and Zoning Commission, who held a public hearing at 5 p.m. in regards to the permit, with no input from the public, recommended the approval of the permit.
The council moved to approve the health clinic R-2 permit.
Hoffman relayed he had received documentation from Stantec Consulting Services for engineering work with the final design, bidding and construction throughout the street project, though the council had previously authorized their services.
The remaining Main Street bricks which were removed are available to the public and will be located next to the city shop.
The next council meeting will be held on Monday, July 21, at 6 p.m.