Todd County board does not forgive Reichert loan

The loan forgiveness request made at the Sept. 6 meeting of the Todd County Commissioners by representatives from the Central Minnesota Housing Partnership regarding the Reichert Place in Long Prairie was denied at their Sept. 20 meeting.

Background

At their Sept. 6 board meeting, the commissioners heard from Central Minnesota Housing Partnership Community Development Director Jason Krebsbach about hoping to refinance their first mortgage and  their desire to have Todd County forgive a $90,000 loan which was made to cover the costs of an environmental cleanup that was necessary when they rehabilitated the building in 2000.

He explained that the $90,000 was originally supposed to be a grant, but since grant funds could not go toward equity, it had to be a low interest loan.

The refinancing they would be doing now would include rehabilitation efforts including fixing the flat roof, some interior work like the flooring, the parking area and some external work, as needed.

Nothing had been paid on the loan to date.

Kircher had said that this whole thing about the $90,000 was new to him and that he couldn’t see that the county could just hand out $90,000.

County Attorney Charles Rasmussen researched information about the loan and all he could find was the mortgage and the promissory note.

Auditor/Treasurer Denise Gaida said that in the 2000 board notes there was mention of the loan, but no actual resolution or board action could be found on file.

The maturity date is Sept. 1, 2031.

CMHP Executive Director Deanna Hemmesch, who was a program director for CMHP at the time, said the county and the city wanted something done with the property. They needed a local contribution to get some of the funding sources they were applying for because asbestos and lead were found in the building so there needed to be an environmental cleanup.

Gaida asked Hemmesch why they don’t refinance it for the amount they owe instead of asking the county for loan forgiveness, like a person would have to do if they were refinancing their personal mortgage?

Hemmesch said that there was not enough equity to pay everything off. She said they did’nt have enough money in their reserve accounts and once they fixed the things that needed fixing, there would’nt be enough money to pay off the $90,000.

Current situation

Hemmesch said that in her search for more information, her understanding was that the county was going to “grant” the needed $90,000 to CMHP as a one percent loan.

The county sits in the third lien position. There is currently $675,000 of debt against the property and that is the main reason they are asking for loan forgiveness.

The actual cost of the lead and asbestos abatement exceeded the $90,000 from the county.

After further discussion, Commissioner Randy Neumann made a motion to NOT forgive the loan stating that he could not go back to his taxpayers and tell them they were raising the levy, but forgiving a $90,000 loan.

Commissioner David Kircher made the second and agreed he could not tell his taxpayers that either.

Commissioner Gary Kneisl asked how the $90,000 helped the CMHP?

Hemmesch said it was not an amortizing loan and would just sit on the books until it was due.

Rasmussen said that one of the reasons the county had helped was to get it back on the tax roll.

Chair Barb Becker said that the former county auditor contacted her and her understanding was that it was a loan, not a grant.

Commissioner Rod Erickson noted that not much had been paid off on the other loan amounts either.

“This is a larger amount of money. We’ve been struggling to maintain our budgets. We can’t tell the taxpayers that we are throwing $90,000 away,” Kircher said.

Erickson said that they could look at it again at some point in the future.

“Our budget may look different in a year,” he said.

Hemmesch asked if the county would consider deferring the loan or subordinating it?

Neumann said that there was a lot of state and federal funding out there and that the CMHP should pursue it.

Hemmesch said that they were subordinating the second loan, too.

The board voted unanimously to not forgive the loan.

In other business

o Todd County has been approached by Long Prairie Packing Company, LLC to consider selling two county owned parcels that contain the sheriff’s impound lot, Veteran’s Services garage and the Sentence to Serve wood sale lot. 

The cost estimate to provide for full replacement of these lots which would be located in the City of Long Prairie’s Industrial Park is valued at $277,183.

The sale of these parcels would provide for new county buildings, increased tax base and reduction of potential farm vehicle interaction on County State Aid Highway #56.

Further, the sale of these parcels will need to be sold on a public auction to provide opportunity for all interested parties to submit a bid for purchase.

The board approved the minimum bid for the sale of these parcels not be lower than the estimated replacement cost of $277,183 and any associated legal real estate fees. 

o Approved an easement request on the above property as Long Prairie Packing would like to move some overhead power lines to underground. They would be going across a county owned parcel. The easement is for Minnesota Power.

o Approved the continued part-time status of Lisa Herges as County Coordinator/Human Resources at 2/5 time and from week to week through Nov. 15, 2016. 

Herges said she thought the county would benefit from a county administrator, but understood the contention this would cause. She said at this time she would recommend the board hire a coordinator, but have them be the director over the facilities and MIS departments.

Kircher said he would fully support hiring an administrator because this is something they need because of the size of their staff and the size of their budget, but that controls would be put on that position and the commissioners would be the policy makers.

He urged the other commissioners to consider an administrator, too.

o Approved the resolution to set the preliminary 2017 budget at $16,352,220 less program aids of $1,350,255 therefore certifying the preliminary local levy at $15,001,965.

o Reviewed and approved the continuation of the Region Five lease agreement for their offices in the county facility in Staples through Dec. 31, 2021.

o Set the fall road meeting date for Wednesday, Nov. 2 at 9 a.m.

o Approved the Big Swan Lake Improvement District five year budget plan, an assessment to 165 property owners in the amount of $95 per property owner, totalling $15,675 per year.

o The board heard from Solid Waste’s Mike Hanen and Jeremy Clasemann on the market price for the solid waste management tax. The tax requires political subdivisions to identify by resolution a market price if the political subdivision subsidizes the cost of service at a facility.

The political subdivision will be liable for the solid waste management tax based only on the market price amount identified through this resolution.

The market price is identified in state statutes as the “lowest price available in the area” which is $65 per ton at the Morrison County Landfill.

o Approved the Federal Fiscal Year 2017 energy assistance contract and internal controls.

Energy Assistance Coordinator Amy Zimmerman said that they have already received 406 applications. Last year the program in Todd County processed 1,203 applications in the amount of $820,000 or an average of $681 per household. An additional 232 households were helped with crisis funding.

o Approved the hire of Amanda Allen to fill an open position as a Child Protection Social Worker.

o Approved filling a full-time payroll specialist position.

The position has been vacant for an extended period of time and staff from other offices have assisted in ensuring payroll gets processed in a timely matter during this vacancy. 

The position will also assist in the office as there is no support staff at this time.

 

Advertising Deadlines

Deadline for advertisements and copy is Friday, noon.

Staples World

Mailing Address: P.O. Box 100 Staples, MN 56479 Telephone: (218) 894-1112 - Fax: (218) 894-3570 Toll Free: 1-888-894-1112 E Mail: office@staplesworld.com; editor@staplesworld.com

Deadline: Friday, noon

 

Sign Up For Breaking News

Stay informed on our latest news!

Manage my subscriptions

Subscribe to Breaking News feed