5.3. SR 09-13-2004
Item 5.3.
MEMORANDUM
FROM:
Mayor and City Council
Pat Klaers, City Administr
September 13, 2004 l
TO:
DATE:
SUBJECT:
Koehler House and Library Expansion Update
The city has recently taken ownership of the Koehler house next to the city library. At this
time the City Council needs to discuss if the city should spend some money on repairs for
health/ safety issues in order to rent out the house; or if the city should remove the house
now in anticipation of the library expansion project taking place within a few years.
Additionally, if the decision is to make repairs and rent out the house, then the next decision
for the City Council is whether or not it wants to make this house available to the Love Elk
River organization for transitional housing.
There are no details available yet regarding a library expansion project. This project has been
discussed in concept only for both design and financing. It is assumed that both the Bailey
house and the Koehler house will need to go when the library expansion project takes place.
The library expansion is not planned for 2005. It is possible that this expansion could
happen in 2006 but it is more likely to happen in 2007. In this regard, if a project happens in
2007 the Koehler house could be available for rent for about 30 months. (Also, please note
that a follow-up library expansion project is anticipated in the 2017-20 timeframe.)
The Mayor, Steve Rohlf, and Phil Hals walked through and evaluated the Koehler house on
August 2, 2004. Steve obtained information regarding health/ safety repairs that are required
in the plumbing and electrical areas. Phil put together information regarding windows, the
garage, the floor areas, and miscellaneous work. (Phil is the staff person responsible for
managing this city property.) In general terms, we are looking at needing to spend about
$10,000 to make this house "rentable." Phil will be at the Council meeting to share the
details of this information.
Love Elk River has indicated an interest in using this property for transitional housing. There
simply are not that many housing opportunities available for transitional housing but the
rent amount will be the big issue with this project. Love Elk River cannot afford a very high
rent for the Koehler house due to the high expenses for utilities.
s: \Council\Pat\2004 \Koehlerupdate091304.doc
The other two properties that the city rents to Love Elk River are done on a "break-even"
basis. In this regard, the city tries to ensure that its expenses for insurance, taxes, recently
completed improvements, and anticipated future repair/maintenance expenses are all
covered within the monthly rent amount. If the city spends $10,000 making improvements
to the Koehler house, then it needs to recapture $333 in rent per month (based on renting
for 30 months). This amount combined with taxes, insurance, and some allowance for
additional expenses (another $300) may make the rent too high for Love Elk River when
they factor in their operating expenses for utilities.
The rental of the KoeWer house to Love Elk River is a difficult issue. I have a concern that
this house may have too many expensive issues arise in the future that the city would be
responsible for after the family moves in; and that ultimately the city will get trapped
financially between the need to make repairs and the need to be fair to the family and let
them remain in the house without a rent increase. I would like to continue working with
Love Elk River and have the city help in providing transitional housing; but with this house I
ultimately have to recommend that we not rent to Love Elk River and that the property be
cleared and house removed as soon as possible.
$: \ Council \Pat \2004 \Kochlerupdate091304 .doc