Chatfield council agrees to loan
settlement offer from local business
Tuesday, December 03, 2013 3:05 AM
Chatfield Economic Development Authority coordinator Chris Giesen visited the city council at its regular meeting on Monday, Nov. 25, to consider an offer from Bernard Bus Service to repay a revolving loan.
The bus service had received a $511,088 revolving loan in 2008 after their business property had been damaged from the August 2007 flood. The money had been received from a Flood Recovery Program started by the state.
Approximately $306,000 was available to be forgiven if the business met certain loan requirements. Currently, the business has paid back $48,000, but fallen behind roughly $75,000 in recent payments.
"We want to make sure we keep this business going," shared Giesen. "We also want to protect the investment the state and city have made."
He pointed out that no direct Chatfield dollars had been invested, but that the revolving loan dollars would come back to the city for future economic development.
Giesen explained the business was offering a settlement of $125,000 for the repayable portion of the loan. Approximately $30,000 would be rolled over into the forgivable portion of the loan if the business would move out of the city. To protect the forgivable part of the loan, the business offered real estate mortgage on property owned in Rushford and Chatfield.
Giesen said the offer would also require the city to release liens on the mortgage and bus property as the buses are sold and the payments made.
Admitting it wasn't the preferred method to deal with the issue, Giesen said the Chatfield EDA and Department of Employment and Economic Development had approved the plan.
Councilman Mike Urban said the decision in the EDA meeting had not been made lightly. However, the EDA members mostly just want the payments to be as current as possible.
The council approved the settlement offer.
In a related note, Councilman Robert Pederson said the city should look at asking the company to remove some of their old buses from the Twiford Street area since they were giving them leeway on the loan.
"We're doing this because we're all in the same boat. We're all from Chatfield," added Mayor Russell Smith.
Fees, rate schedule
In other business, the council approved the first reading of Ordinance 409, which outlines fees and utility rates.
A new fee for 2014 will be for a $45 demolition permit. Water rates will go up 3 percent and sanitary sewer rates will go up 6 percent.
Young said this would show as a total 5.4 percent increase.
The council will bring the ordinance back for a second reading, approval and publishing of the ordinance at the next meeting.
Street, utility project
Dillon Dombrovski from civil engineering firm WSB & Associates, Inc., visited the council to seek comments on its proposal for the 2014 Street and Utility Improvement Project. Young clarified that WSB was offering their services for the project, which would address improvements on St. Albans Place, Twiford Street and Bench Street and the west Chatfield area. The project is estimated to cost $1.4 million.
He mentioned that local engineering firm G-Cubed had done all the engineering work for the Lonestone subdivision and lift station and had submitted a proposal for utility work near EZ Fabricating.
Young explained WSB had included that work in their proposal.
Dombrovski explained their proposed cost would only decrease by a portion of what the G-Cubed proposal would cost. Certain surveys and reviews would still need to be completed by WSB for their additional work.
The council approved the proposal from WSB.
Patrol Officers Union
The council approved the labor agreement with the Patrol Officers Union after reviewing the union's requests for their contract renewal, which occurs every three years.
Approved was the compensation time that could be carried over, change in vacation schedules and increase in pay during court time.
Rejected was a pay increase by 3 percent over and above any other pay grade increase made in December, shift differential pay at $.50 per hour for extra time worked between 6 a.m. and 6 p.m., and using the fitness center while on duty.
Young said the union was concerned about the city's ability of keeping experienced officers over the long term. He pointed out Chatfield did well in comparison with other cities in starting pay and in the first few years, but not so well in pay for more experienced officers.
He asked the city to commission an officer pay study within the next 12 months. The results of the study would form a new contract in a couple years.
The council approved that measure as well.
Councilman Ken Jacobson said the new Ford Explorer for the police department needs lights replaced. The council approved the replacement for roughly $5,500.
After consulting with VFW members, the American Legion is moving forward with the proposed new memorial in the city park. Action will be taken during the first week in January so the veterans' name engraving can begin and installation of the memorial may take place sometime in early spring.
There were congratulations all around for the Chatfield High School football team, which had advanced to the state championship game.