City commissioners voted unanimously Wednesday morning to submit an action plan to the state in the hope of getting a grant for the Neighborhood Stabilization Program.
The vote came during an action session that was carried over from last week’s commission meeting.
The state expects to receive an allocation of almost $21 million for NSP programs across the state.
Emporia’s estimated allocation would be $288,431, which would be used to buy foreclosed or abandoned properties to rehabilitate or re-sell.
The city qualifies for the grant because the county had 180 foreclosed or abandoned homes in a two-year period, city housing specialist Jeff Lynch said.
Lynch presented a draft of the action plan and explained how the NSP could be handled.
The city could buy properties in the city or in the county, he said, and there is potential for qualified buyers to use the city’s first-time homebuyer program.
Houses purchased would have to be priced at least 15 percent below market value, based on a recent appraisal.
“We can actually cut our sale price as deeply as we want to,” Lynch said. “Another option we do have, I’ll put in real quick, we can have a non-profit or a CHDDO take over the property and basically we don’t even touch it. I’ve talked to a nonprofit about that ....”
Commissioner Julie Johnson asked what would happen if the home were found to have asbestos or lead-paint issues.
“Those would have to be remedied before the property could be sold. If that ran over allocation, how is that accounted for? Would the city be responsible for any expenses over and above what was allocated for the grant?” Johnson asked.
Lynch replied that he believed the city would be responsible.
Commissioner Bob Agler suggested properties be thoroughly inspected before purchase.
Mayor Jeff Longbine asked why the county considered an NSP and turned it down last week.
“There were liability concerns, mainly because there was confusion on the titleship period of time that was required. I’ve cleared that up with the state and there is no period of time that we’re required to own the property,” Lynch said.
Real Estate Broker K.B. Thomas spoke in favor of the city’s involvement in the NSP.
“I think it’s a good program for the city,” Thomas said. “I’ve noticed that a lot of these foreclosed homes are going about 50 percent of what they sold for three years ago. I don’t think there’s going to be a problem coming out of it. I’ve noticed a number of real estate people theirselves re-buying these properties.”
After the vote to approve the action plan, commissioners adjourned the action meeting and went into a study session.
City Manager Matt Zimmerman provided updates on three utility funds and the general fund.
Water sales remain significantly down from 2007 levels, with income stagnant despite rate increases.
Zimmerman said that the second-largest water consumer, Menu Midwest, is installing new equipment that will decrease its water demand by 20 percent, and Dolly Madison is ready to begin a water-saving project that was delayed when the parent company filed for bankruptcy protection. Now that IBC has emerged from bankruptcy, the conservation project will be resumed.
“It’s a smart thing to do and we know that,” Zimmerman said.
The water fund at the end of the 2009 fiscal year will be used up, he said.
“It does appear that as we raise rates, our water usage goes down,” he said.
The city wants to take steps to mitigate water loss through a meter-replacement program, leak detection and another rate increase.
The commission will discuss purchasing a leak detector to help workers find and repair or replace mains with larger leaks, which will conserve treated water.
Zimmerman also said that the landfill fund is low, and that the plunge in prices for recyclable items has caused the city to keep its recyclables until prices improve.
Zimmerman reviewed a revised Capital Improvement Projects list for the 2010 budget year.
Included among the items slated for improvements were a possible resurfacing 24th Avenue from Industrial Road to Prairie Street, an increase in the KLINK project for Commercial Street, and the possibility of an estimated $880,000 water-main replacement project on Commercial Street from Third to Fourth Avenue and from Fifth Avenue to 12th Avenue. Mains in the 400 block of Commercial Street were replaced when the Lyon County Courthouse was built.
Zimmerman said that the mains were quite old and subject to ongoing leaks. The commission, he said, may want to consider whether it wants to make the replacements before starting the KLINK pavement project on Commercial Street. Otherwise, he said, leaks or broken mains could cause city workers to have to tear up new pavement to make repairs underground.
Street Supervisor Gary Sadowski said that old water lines crisscross the city.
“I know on ... West Street, we pulled a fitting out that was dated in 1897,” Sadowski said.
Zimmerman said that the planning commission recommended approving the CIP when it met Tuesday night. The planners also recommended that the city set money aside for land acquisition for a park west of the Turnpike.
Commissioners also discussed options for health insurance, as recommended by a committee of city employees.
Zimmerman said that Blue Cross-Blue Shield likely will not be able to provide the city a preliminary cost estimate until July. City staff consequently estimated a cost increase of 15 percent.
“We think it’s not unreasonable to assume at this point that you’re looking at a $115,000 increase for health insurance,” Zimmerman said.
Other options could bump the cost up $263,000, which commissioner Agler termed “probably unacceptable.”
One of the options presented by the committee included a provision for an office visit co-pay of $25.
“Do we not have an office visit co-pay now at all?” Longbine asked.
“No, we don’t,” was the answer. “Currently there’s a $1,500 deductible that has to be met.
Longbine said that the $1,500 deductible was considered low, and that deductions of $2,500 or more are common among private businesses.
Zimmerman said that the health committee could meet again in June to come up with firmer plans and figures.
“At this point, I would struggle to support a 35-percent increase,” Longbine said.