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By LeAnn R. Ralph
COLFAX — The Colfax Village Board has approved borrowing $120,000 for the Dunn Street project to make the final expenditure for Tax Increment Finance District 4 by the February 22 deadline.
The original plan was to borrow $100,000 on an interim basis for the Dunn Street project, but recent interest in building a three-plex on Dunn Street would require $120,000 for necessary improvements, said Scott Gunnufson, village president, at a special meeting of the Colfax Village Board on February 15.
Gunnufson said he had recently met with an individual who would like to start work on the three-plex this spring.
When the potential developer has costs available and knows more about the plans, he/she will make a presentation to the village board, he said.
The three-plex would be located south of the first house built in the East View residential development. The $20,000 would go toward putting in utilities in the street for the three-plex, Gunnufson explained.
Adding $20,000 to the amount the village is borrowing will create some flexibility. If the three-plex is going to be built, the village must be ready to move forward with the utilities, he said.
The financing will be part of TID-4, so the loan will not be on the property tax levy, said Josh Low of Ehlers Inc., the village’s financial consultant.
The $120,000 will be refinanced later when the village finances all of the street projects for this year, he said, noting that the interim borrowing now will allow expenditures on TID-4 before the end of the expenditure period February 22.
The Riverview Avenue project (from High Street to Viking Drive) includes 500 feet of street and curb and gutter, storm sewer reconstruction, water main reconstruction and sanitary sewer reconstruction for a total estimated construction cost of $240,300.
The High Street project (from Riverview Avenue to Oak Street) will include 100 feet of street and curb and gutter, storm sewer reconstruction, water main reconstruction and sanitary sewer reconstruction for a total construction cost of $96,100.
The Dunn Street project, which will cost an estimated $87,500 for engineering fees and construction, will involve 215 feet of sanitary sewer extension and pavement reconstruction but does not include water main or storm sewer.
Ehlers sent out Requests for Proposals to Dairy State Bank and Bremer Bank, Low said.
Dairy State Bank was the only financial institution to respond, and the interest rate on the loan will be 1.4 percent, he said.
The payment on the loan for $120,000 — which, with interest, would be a total of $121,000 — would be due March 1, 2022, but the payment will not have to be made because the entire amount will be refinanced before then, Low said.
It is up to the village board to decide whether the amount will be not to exceed $100,000 or not to exceed $120,000, he said.
If the three-plea does not come through, the extra $20,000 can be used to reduce the bond size for the other projects, Low said.
Gunnufson asked if TID-4 would be able to pay the amount of $120,000.
The extra $20,000 will not make much practical difference to TID-4’s ability to pay off the amount, Low said.
In a tax increment finance district, property taxes assessed on new construction go into a special fund to help pay for infrastructure improvements instead of being paid to the village, the school district, the county, and Chippewa Valley Technical College.
When the tax increment district is closed out, the money that remains is paid to the individual taxing authorities.
Each tax increment finance district has a deadline for making final expenditures.
The extra $20,000 for Dunn Street would pay for installing sewer pipe and a manhole for the new building, said Rand Bates, director of public works.
Sewer is already installed to the end of Fourth Avenue, and water main already exists on Dunn Street. The project would involve the 75 feet of sewer pipe, the manhole and patching the road. The developer would be responsible for running sewer and water lateral to the three-plex, he said.
The sewer main runs down Fourth Avenue to Main Street, Bates noted.
The developer hopes to have numbers on the three-plex within the next couple of weeks, Gunnufson said.
The Colfax Village Board unanimously approved the resolution to borrow up to $120,000.
Voting in favor of the motion were Gunnufson, Stene and Village Trustees Mark Halpin, Logan Michels, Anne Jenson and Margaret Burcham.
Village Trustee Carey Davis was absent from the meeting.