At the June 4 city council meeting, a number of issues pertaining to the city’s future were on the table including housing, street improvements, and the proposed veterans home.
City Administrator Joe Hoffman, Public Works Director Jim Bakken, and City Engineer Brett Grabau led a discussion on potential street projects for 2019 or 2020. The Pleasant St. area project was divided into four areas. Grabau explained it will cost about $600 per lineal foot, or $210,000 per block to reconstruct the streets, including utilities. The Pleasant St. area could total $5 million for reconstruction. Other smaller projects including Maple St., Cottage Grove Hill, and the Branding Iron area were also discussed.
Hoffman said project costs have went up more than financing costs. To accomplish these street upgrades or a portion of them would significantly raise the debt per capita for the city. Hoffman showed how $55,000 will be freed up after a 2007 bond is paid off and with the inclusion of extra funding that has been set aside with the 2018 levy. Due to those funds a $1.5 million project would result in no levy increase. A $4 million dollar project would increase the levy by over 10%. Utility work would also result in a significant increase in sewer rates.
Councilman Charles Sparks said the question is, can we afford to do it? We can’t justify that much expense. Hoffman noted the city will be spending nearly $200,000 to acquire the property for the veterans home. Councilwoman Holly Zuck remarked she would prefer putting the money toward the veterans home. Hoffman said there are a lot of needs in our community that perhaps would be a better investment.
Councilman Robert Maust argued that the city would save in the long run by taking advantage of lower interest rates, insisting a quarter point raise in interest adds 10% to the total cost.
Mayor Kurt Reicks said we need to decide what is feasible and what tax payers will accept. A motion to do a feasibility study on a portion of the project that could cost $2.4 million failed. A motion to wait until 2020 to do a street project passed with Maust and councilman David Collett voting no. Maust insisted there is no gain in waiting, it only will cost us more money.
With the approval of the Omnibus Bonding bill and the governor’s signature $10.2 million has been appropriated for the Preston veterans home project. The state of Minnesota will need to own the land for the project to enter the federal queue. The next step is for the Minnesota Department of Veterans Affairs to apply for federal funds by April 2019. A motion was made and unanimously approved to exercise the option to purchase the approximately 15 acres of land. Hoffman noted there could be as little as two to three years wait time or up to five years. He credited Rep. Greg Davids for bringing the need to have a veterans home to our attention and both Davids and Senator Jeremy Miller for their legislative efforts.
Cathy Enerson, EDA director, described the recently completed housing study for Preston. The study was done by University of Minnesota, Morris, student Evan Aanerud with the assistance of EDA member Jon DeVries. The updated housing study forecasts a downward population trend through 2030. A 10% growth is expected around Rochester with a decline in rural communities.
With the current trend, 57 properties will be needed between now and 2030. If the city can capture the opportunity that comes with Destination Medical Center, it will need to create 127 properties between now and 2030. DMC will bring families and couples. Housing will also be needed for those who are retiring and empty nesters. The challenge will be to attract and retain families.
Housing must be available at the level people can afford. There is also a need for affordable rental housing. Some existing housing will be replaced and some will be new. The EDA paid the $500 cost of the study.
John DeVries offered to donate his time in phase two and three. He expects there will be some cost to the city in phase two for infrastructure investment. Over time he predicts it will be revenue positive, adding there will be a huge cost not to do this. If the population drops to about 1,250 by 2030, the city’s tax burden will fall on fewer households. DeVries said Preston is an employment rich community. Also, as housing prices rise in Rochester the commute becomes more affordable.
The council adopted the housing needs study and EDA recommendation to move forward on phase two and three. New Construction Incentives, New Developed Housing Rehab incentives, and the promotion of the USDA Housing Programs and City Housing Programs on a Livability Website Tab were approved as recommended by the EDA.
Other business in brief
• The POP site (old Texaco station) on the 300 block of St. Paul SW is in tax forfeiture. Hoffman said the city has three options: take the property for public use, purchase it for legal use, or allow it to go to auction. There is another option in this case, because it is a blighted property, which would allow the city to purchase the property for less than market value.
Maust and Collett did not see why the city would want the property. Hoffman said if the city purchased the property it would be responsible for demolition of the building and the removal of two one-thousand gallon tanks (diesel and kerosene). Any contaminated soil would need to be removed. About 85% of that cost would likely be reimbursed through the Minnesota Petroleum Remediation Program.
Reicks insisted we should clean up the blighted area. Hoffman added we should determine the value of the property when it is cleaned up. Staff will gather some more information, cost for demolition and tank removal, and bring it back for the council’s consideration.
• An outdated circuit breaker needs to be replaced in the library. Haakenson Electric has submitted a quote to do the work for $2,648.84. There was some discussion about which pot of money it should come from. A motion for the funds to be expensed from the Town Hall Remodeling funds was approved, with Maust and Collett voting no.
• Approval was given to hire Ann Thacher as a seasonal employee for the Tourism Center.
• Council members were invited to attend the Preston Emergency Services annual picnic on June 20.