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Fairmont properties could net rehab funds

FAIRMONT — Commercial properties and single-family owner-occupied homes in a targeted area north of Blue Earth Avenue and east of Downtown Plaza may be eligible for $885,000 in rehabilitation grant funding.

Originating from the U.S. Department of Housing and Urban Development, the money is awarded through a Small Cities Development Grant from the Minnesota Department of Employment and Economic Development and administered locally through Minnesota Valley Action Council.

On Monday, Judd Schultz of MVAC updated the Fairmont City Council on the status of the funding, which will be available when DEED gets the contract from HUD.

The money will allow for 18 qualifying single-family owner-occupied homes to be rehabilitated, with a grant maximum of $25,000 per home. On the commercial side, eight businesses will receive $40,000 each in grant funds. The remainder of the grant, $115,000, will be used for the administrative portion of the process.

City staff has been working on securing the grant since last summer, sending out surveys and going door to door in the targeted area to gauge interest.

“We will be doing some direct contact with all the commercial business owners and all the households that sent in surveys and indicated they were interested and eligible for the program,” Schultz said. “We will be doing direct outreach letting them know what they have to do. They’ll have first crack at that money, and at some point we’ll do some marketing to the entire target area.”

In addition to direct mailings, the city will post information on its website and on social media.

Awarding the commercial grants will take a different approach than the usual first-come, first-served method.

“Since we have a very large number of interested commercial building owners, we’re going to establish an application period, and we’ll accept applications through that period. Then we’ll put them all in a hat and draw eight, and they’ll get first chance at the money,” Schultz said.

In the event that any of the applicants drop out, another random draw will be held with the remaining applicants.

“With so much interest, that’s probably the fairest way to do this,” he said.

Schultz said the majority of the work on the rehabilitation projects probably would be done in the spring using qualified contractors.

Turning to another matter, the council set a public hearing for 5:30 p.m. July 27 on the establishment of a natural gas franchise fee. The city has been working with Minnesota Energy, Fairmont’s natural gas provider, in developing the proposal, which calls for Minnesota Energy to collect $2.50 plus a therm charge each month from city gas customers and then forward that money to the city.

Paul Hoye, city finance director, said the cost to the average homeowner would be less than $50 per year.

He estimated the city could collect about $280,000 annually from the franchise fee, with that money earmarked for street improvement projects. This method would help the city eliminate a portion of the assessments and bonding that currently is used to finance street projects.

In other business, the council:

o Unanimously voted to modify the city’s lake access policy that involves residents installing docks on city-owned property. The current policy, established in 2015, called for a $500 annual fee for a dock with a maximum of two lifts. The new policy mandates a $500 charge per lift unless both watercraft are owned by the same person, and residents are prohibited from subleasing.

o Learned that an informational meeting for businesses and residents along the Lake Avenue construction corridor will be held at 5:30 p.m. Thursday in the open-air shelter house at Sylvania Park. Construction is scheduled to begin July 27, and the meeting will provide an opportunity for questions to be answered.

o Approved two professional services agreements with Bolton & Menk. The firm will receive $346,000 for engineering services for the Lake Avenue construction project and $59,250 for preliminary engineering on the wastewater treatment facility improvements.

o Heard from Cathy Reynolds, city administrator, that Presentation College has completely moved out of the SMEC building, and other options for the building’s use are being considered, including other college classes. UHD maintains its therapy department in a portion of the building.

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