 Carrie Aaron's is here Marty Helverson, Vicki Schneider, Chad Palachuk, Todd Wolf, Marcus, Mayor Van der Steen, Lori Surkey, and Scott. Very good. But I will call the meeting to order if you will all join me in the Pledge of Allegiance. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Very good. Our final business is the approval of minutes from our October 19th meeting. Do we have a motion? Move to approve. Second. All right, we have a motion in second. Is there any discussion? Hearing none, all in favor please state aye. Aye. Aye. Any opposed? Chair votes aye. Thank you. 3.1 is a claim from Gordon Zastrow for alleged injuries for a trip on uneven team pavement. Chuck? We sent a letter of denial on this, so the proper motion would be to file. Sorry. Do we have a motion to file? Move to file. Second. If there was a second, I didn't hear it. Second. All right. Any questions? Roberta? I have a question. It looks pretty ordinary. Do we have a rationale for denial? You're muted, Chuck. I hit the wrong button here. There's a couple of reasons. One is basically the law doesn't necessarily provide that we would have to pay a claim like this, unless there is actually negligence on our part. And second of all, we do have a sidewalk inspection program. We weren't aware that there was an issue at this particular location. And so again, there wouldn't be a basis for negligence. So for that reason, we are denying. Okay. Thank you. And that's another question. We're looking for a motion to file this document. Move to file. And is there a second? Second. All right. Very good. Any further discussions? Not all in favor. State. Aye. Aye. Aye. Aye. Chair votes aye. All right. Let's go on to. Any further questions or questions for Chuck? No, I don't have any. No, I don't have any further questions. I have a notice. Circumstances and claim for damages. For injuries to ha ha. But I have. But. Chuck. Yeah. So this is another one where we've received the claim and have already sent a notice of denial. So again, the proper motion here would be to file. All right. Not any one have questions for Chuck. Chuck, is this person involved with another lawsuit suing the police department? Yeah, well, this is a claim that is against the city. And of course, the police department is a part of the city. They have not filed a lawsuit against the city. Okay. Yeah, I read this over and I was just wondering if they were gonna take other legal action besides this. Okay, that's fine. Thanks. All right. Can we have a motion to file? So moved. Second. And it was second. Second. Did I hear a second? Okay. Whoever that was, thank you. Is there further discussions? Hearing none, all in favor, state aye. Aye. Aye. Aye. Any opposed? Chair votes aye. 3.3 is the claim from Barbara Selke for alleged injuries that sustained on the sidewalk. Chuck? This is another one where we have already sent a notice of denial. And so we are looking for a motion to file. Any questions for Chuck? If not, could I have a motion to file? Move to file. Motion to file, board. Second. And we have a second. Thank you. Any further discussions? Hearing none, all in favor, state aye. Aye. Aye. Any opposed? Chair votes aye. Moving along to 3.4, which is the resolution authorizing an application to HUD through section 108 of the Housing and Community Development Act. Chad, I expect this is your daily work. Yeah, so what we're planning to do here is use this section 108 program, which is a low interest loan funding program through HUD to fund projects that are serving low to moderate income households and in those types of areas. So the section 108 program allows us to leverage our annual grant allocation to basically as a loan for specific projects. So what we're looking for is to allocate under the section 108 program 3.2, 3,200,000 in loan proceeds to be used towards the purchase of the former Savalot that we're looking to convert into the senior center at a value of about 700,000 and then to use roughly 2.5 million of those funds for renovation dollars. We had a conference call a few weeks ago with HUD and walked through how this program works. And the current interest rate of the loan is 0.63% for 20 years. We would then allocate the debt service payments as future block grant allocations through our yearly allocation process. And estimates are somewhere in the range of 160 to 175,000 a year for principal and interest payments on that debt over the course of 20 years. This program would not go against the city's borrowing capacity as other general obligation borrowing does. And HUD does a calculation and they give us a value each year of what our borrowing capacity is, and ours is about 4.2 million. So we feel that this is a low-cost way of moving forward and funding the renovation as well as a partial of the reimbursement of the city's proceeds for the purchase of the building. The security of this loan from HUD will be a first position lien on the real estate once we get to closing. So before we can move forward with this, we're looking for support from the common council as well as we'll have to do a 30-day public comment period and then submit the application sometime in mid December. Questions for Chad? Bird? Did I hear accurately that the interest rate for 20 years is 0.63? Yes, yes. Chair? Chair? Yes. No, this is Todd Wolfe. Go ahead. Chair, I just wanna let everybody know that obviously Chad and myself and the team we recommend this highly, not, I mean, the interest rate is phenomenal. Also the 20-year term and the fact that it does not affect our geodebt in calculations. Plus, if you think about it, because of the way we're doing the funding, it's not going to come out of our operating cost. So this is kind of a win-win and please understand that other communities use this type of an opportunity for similar activities. So this is something that I think is very beneficial for the city of Sheboygan in the development of our senior center for the future. Thank you. Just to clear. I guess my, I agree with everything that's been said. I guess my question is, and if this isn't, as I understand it, a reallocation of HUD money and CDBG money, what won't be funded or what programs or pieces that might be available for the low-income community won't be available, do you think any? Well, we get 917,000 give or take per year as you recall the finance committee and the council allocates funding to public service projects, to street projects, to park projects, admin costs. So we would just, it would go against potentially a street project or a parks project that we have allocated. So I mean, I don't, given the low amount of money, I don't think it's gonna have a huge, it's definitely not gonna go against public service or the admin dollars. So it'll just be like a park project that we're just allocating each year as part of our allocation. The other thing I just wanna mention is the 0.63% interest is a, what HUD called a temporary or a short-term interest rate. And then the, so they do buyouts of the interest rate every few years, every three, three to five years or something, and then you get into a permanent financing rate. But at any rate, they're still low-interest loans. Potentially in year three, it could be 1.75% interest. That is correct. Thank you. Chair, I have a question. Go ahead. Although I'm in favor of this project, this information does have me a little bit concerned. When does this teaser rate expire and what would be the maximum rate it could be on this adjustable rate mortgage? Well, they wouldn't be an adjustable rate mortgage. It would be this short-term rate until we do a permanent refinancing if you will with HUD and there's no given timeframe as to when they buy these loans out or however they do it internally. They told us they just did one two years ago, I think or something. 2019. So, and I think at that time it was under 1.5% or something. So then you would lock in for the rest of the term. And at that point, the city could decide, is that makes sense and is this working for us or do we wanna refinance this with general obligation borrowing if we can get it at a cheaper rate? There's no payment penalties to buy it out. So, I think it's an opportunity, but I think at the same token, we don't also have to budget general fund dollars to make the debt service payment either because we're gonna use federal block grant dollars. Thank you. Just for a little bit more clarity, I don't know if you said it, I missed it. How long do we have this introductory rate? For three to five years until HUD does a permanent financing. Thank you. Chair, this is Marty. If I may, I believe what they referenced was 30 points above LIBOR, 30 basis points above LIBOR. However, LIBOR will end as we know it on December 31st of 2021. So we'll need to have a different reference point, but it at least does give us a benchmark for now. Marty, why don't you explain to folks what LIBOR is? LIBOR is a interest rate world globally that's, I believe it's based out of Europe somewhere. I mean, England. England, so it's truly just the global market interest rate. So that's one of the most common benchmarks used. GFOA, Government Finance Officers Association emailed this afternoon that there's a plan in place to eliminate LIBOR at the end of 2021. They've got some recommendations out there of other benchmarks that can be used. I did forward that to our city attorney and assistant city attorney to research other documents that that could be affected by. All right. I think this is a great idea. CDBG money really should be focused on lower income persons and programs and areas. And I think that the refurbishing of this particular building will add greatly to a neighborhood which has become, at least the business part of it has become kind of sad. So are there any other comments or questions? If not, I would look for a resolution authorizing the city to apply for this grant through section 108. So moved. So moved. All right. So we have a motion and second. Is there any other discussion? Hearing none, all in favor, state aye. Aye. Aye. Aye. Any opposed? Chair votes aye. All right. Let's go on to 3.5, which is a resolution authorizing the submittal amendment to the community development block grant program for the 2020 program year. Chad, is this yours? Sure. So this is in regards to two revolving loan funds that the city manage and operate. So we have a revolving loan fund for job creation, known as the economic development loan fund. And we have housing rehabilitation loan fund and that's used for low to moderate income residents to apply for housing rehab assistance to fix up their homes. Over the past three years, we've out of both of these programs, we have given out minimal loans, particularly I would say because we like to look at ourselves as a lender of last resort. And that if they can't put deals together, they'll come to us for some gap financing. And given that the market has been prior to COVID relatively good, we have had still people paying on a timely fashion that has raised these fund balances pretty significantly, but we have not given out many loans. So HUD has been kind of on our case about reprogramming some of this funding, clearly really on the fact that their goal is to get this money out on the street to service low to moderate income populations and not be sitting in the interest bearing savings account. So just to give you a little bit of fund balance information, I think the housing rehabilitation loan fund has a balance at the end of 2020 of about 720,000 projected to go up to about a million at the end of 2021. And the business loan program has, I wanna say 1.5 million fund balance. Sorry, Marty's gonna tell me the right number. The business revolving loan fund balance is just under 800,000 projected at the end of, was budgeted at the end of 2020 with now a revised projection of just under a million and at the end of 2021 just under 1.1 million. So given that we're sitting with substantial dollars in both of those programs, we're proposing to reprogram 300,000 dollars out of the business loan program and 200,000 out of the housing rehabilitation program to put into basically the, to make up the difference of the purchase of the building for the Save-A-Lot. So we've budgeted our accepted offers about 985,000 on the Save-A-Lot with closing costs and other fees where we've budgeted at about a million dollars. The idea would be to take 700,000 from the section 108, 300,000 from this reprogrammed funds under the business program and be able to reimburse the city the roughly million dollars that we will have capital outlaid and spent for the closing of the building in January. And then to take the 200,000 from the housing rehabilitation loan program and either use it to purchase the existing senior center building from the federal government or to apply it towards construction on the Save-A-Lot. So we're in negotiations and we've gotten a number of options already from the federal government and the park service as to what to do with that building because it was deeded to the city in 1991, the current center. And there's a number of options with one of them being that we could purchase the building outright. So we would use the 200,000 to purchase the building outright and look at maybe a redevelopment opportunity in that area or apply it towards the Save-A-Lot reconstruction. So at any way that the 300,000 and the 200,000, the 500,000 would go towards senior services related to the new building. Okay, questions for Chad. Bert. For the 300,000 in job creation, is that job creation or is that something different? The 500,000, the 300 and the 200 would not be job creation. It would be taken out of those funds and be reprogrammed into senior services, which is a public facility activity under the federal HUD definitions. You're taking federal money from one federal pocket and putting it in a different federal pocket. That's a good way of saying it, yes. Okay, thank you. Other questions for Chad? So Chad, my question is, again, I think this is fine and really makes sense. Can you tell me why both the business development and the job program haven't worked very well? It would seem to me if we can't spend the money. Well, a lot of it has to do, our current interest rate is APR. So a lot of it has to do with the fact that people are, they can get, for a while, they could get a better interest rate at their lender and they didn't have to go through all the federal red tape in order to get these funds and do yearly job creation counts and all of that kind of stuff. So I think it's, frankly, the red tape requirements that come with federal dollars and a number of businesses, if they've got an established relationship with a lender, have gone to the lender and they can just finance their project fully that way. The other reason I would say is that we're a subordinated lender and we're typically only 50% of the maximum of the project but it has to directly relate to an agreement that the people are gonna create new full-time equivalent positions and some people don't want to agree to that because they want the flexibility of not having to commit to that job creation. So, and then I think the other piece of it is we have a, we've got about a $3 million loan balance, unpaid loans, so our balance sheet is about 3 million and about 350 to 400,000 revolves in a year and that's with nobody paying them off in advance. So we have substantial money coming in and if we don't make some big loans to expanding our new businesses, there's just not a lot, I mean a couple hundred thousand here and there but back in, you'll recall back in I think 2019 we did a $500,000 note to Old World Creamery and prior to that I think we did a $300,000 note to Old World Creamery to create almost 30 new jobs. So it takes projects like that to come in for larger chunks of money but if those aren't out there given the times we're in the money just we keep collecting it but we don't have a means of getting it back on the street. So each of those programs will continue. I mean essentially we're taking all of this from fund balance. That is correct. And okay, so because I think the programs are valuable and they're not workable, that's a different question but at least that's something to consider. So any other questions or comments? I am looking for a resolution to authorize the submittal of substantial amendment to HUD and the community development block grant program for the 2020 program year. I'll move. Second. Any further discussions? Hearing none, all in favor, state aye. Aye. Aye. Aye. Any opposed? All right, very good. And the chair votes aye. Sorry. 3.6 is a referral authorizing the chair with 1402 Union Avenue. So I have to tell you that I've just become a fan of Google Earth and so I mean I know the neighborhood but I was trying to figure out what the building was specifically and if you haven't done Google Earth, it'll just zoom you right in and you can walk around the property and it's for me at least, it's great fun. Sad curiosity, but there you go. So the building, Chad does not look particularly bad on the outside but it seems like it's not worth much or whoever's handling this. Thank you chair. So this building you'll recall the city took from Wisconsin Bank and trust about two or three months ago because of outstanding building code violations. So maybe what you don't see on Google Earth is the fact that all the brick has fallen off the east side of the building and is sitting in the street right away as well as on the north side of the building. So after multiple building code violations, Wisconsin Bank and trust deeded the building over to us for a dollar, we had taken a proposal to the architecture review board as to what we thought could be done with it and to get it fixed and keep it on the tax rolls. So they approved a plan and then Bernie Romer went out and did a half page ad in the newspaper, put a for sale sign on it for about two months and then kind of had a set price of I think $40,000. We received two bids, one for $12,900 and one for $12,500. Clearly there's a lot of work that needs to be put into this and it's gonna take the right person to be able to do that. He did show it to about six or seven other parties but nobody wanted to take on the project of fixing the brick on the east side of the building. So we're recommending moving forward at the $12,900 with Jim Schultz. He's a person that does a lot of good work in the community and knows what needs to be done in the wherewithal to pull this off and then we can keep this building on the tax rolls and ultimately get some tenants back in it versus moving through the raise order process. Questions for Chad or comment? I talked to Chad about this this morning and just wanna reiterate that Chad said that this gentleman does quality work and also I asked Chad when he intends on getting this done and Chad said he'd like to get it done by the end of the year. So that was good news for me that he's gonna move on this project and get it done. All right, any other comments or questions? I've got a question. Go ahead, Roberta. Do we have a recourse if it languishes? We didn't, I mean, we're selling it with the conditions that it's gonna get it done. I mean, the recourse would be following the building code violation process again and getting orders on it, but I mean, he wrote the offer and he wants us to close by the end of, by November 6th so that he can get going on this. So I guess I'm putting some trust in him, but we've had good relationships on previous projects with him and he knows what he needs to do and we're optimistic that he's gonna get it done, but I personally don't want the building back if he's not gonna get it done. All right, any other questions or comments? If not, could we have a motion for sale of this building for $12,900? So moved, Boren. Second. All right, we have a motion and second. Any further discussion? Hearing none, all in favor, state aye. Aye. Aye. Aye. Any opposed? Chair votes aye, motion passes. I think this brings us to our date of, our next regular meeting is November 9th. Do we have any quorum issues at this point? Okay, can we have a motion to adjourn? So moved. Second. All right, I can call in favor, state aye. Aye. Aye. Aye. Any opposed? Chair votes aye. Thank you all, good meeting. Thank you.