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City funds another lease-purchase

Staff writer

Barely two weeks removed from the collapse of a lease-purchase arrangement with Arlie’s Paint, Body, and Glass, the city council is back in the business of financing a business.

Mark Evans, who operates an Airstream restoration business in the business park north of U.S. 56, appeared at Monday’s council meeting to discuss financing details that would allow him to move into the spec building in Batt Industrial Park.

City Administrator Doug Kjellin proposed a sale price of $85,000 for the building, which originally cost $128,780 to build. Similar to industrial park tenants Cardie Oil and Arlie’s, the city would finance the sale and enter into a lease-purchase agreement with Evans to cover the city’s costs.

Evans said the move would accommodate growth and protect inventory.

“My business has increased,” Evans said. “I’m concerned about hailstorms and being able to put them in out of the weather. Having a building of that size helps the image of it.”

Council member Todd Heitschmidt expressed reservations about the proposal.

“We have two issues,” Heitschmidt said. “One is the sale, the other part is the lease. Given our recent history, I don’t know that the council needs to be playing banker on a 100 percent lease. It’s tough enough the city is probably going to have to sell two properties at way less than the taxpayers invested in these.

“I’m not opposed to the sale. We’ve already taken a third off of the price, if we agree to this price or a little bit more, and we’re doing 100 percent financing, I don’t think that’s in the best interest of the taxpayer.”

Evans attempted to reassure the council about his financial status, and said the city’s risk would be much smaller than with Arlie’s.

“I don’t like to get in over my head, I like to go step by step,” Evans said. “I want to make sure it’s affordable and workable. On this, at year five, the balance would be down to $60,002, so it looks quite a bit better.”

Evans said he could make a $10,000 down payment using his current lot and additional cash.

“Well, I’ve certainly wanted to get rid of it, and we haven’t had anybody come with serious offers,” Mayor Mary Olson said.

“I do not like the price, but we are where we are, and I sure don’t like paying $8,000 a year in taxes for a building that hasn’t generated $8,000 in income since we’ve had it,” Heitschmidt said.

The council approved a motion by Heitschmidt to sell the property for $81,000, and the city will recoup the additional $4,000 from acquisition of the lot Evans currently occupies. A down payment of $8,500 is required. The city will waive tap fees for sewer and water, and install an additional culvert.

Kjellin and Heitschmidt will draft the lease agreement.

Confusing mess

Lloyd Meier appeared for a third consecutive meeting to discuss what City Attorney Susan Robson and Kjellin both termed a “confusing mess” regarding a disputed easement involving Meyers’ property in Jex Addition.

“There are issues that have accumulated over the past 40 to 50 years, and every single time this title is touched, it looks like something gets changed on it,” Kjellin said.

“I’m trying to sell this property, you done cost me a sale,” Meier said. “My people are moving out because they bought another house.”

Meier, Robson, and Kjellin argued at length without agreement over a proposed exchange of quitclaim deeds to settle the matter. Meier said he was concerned the quitclaim deed would not protect his right to build or

“I know what you’re saying, Mr. Meier, I just don’t know how we can stop going around in circles on this,” Kjellin said.

Meier agreed to have his attorney contact Robson to facilitate a resolution.

Fireworks

A discussion about a proposed session to work on the fireworks ordinance generated sparks of its own when Heitschmidt questioned the appropriateness of a meeting Olson instigated at the police department with Police Chief Tyler Mermis, Caroline Kelly, and council member JerryKline.

“Yes, we had a meeting down at his place where we gave him the authority to go ahead and make up his list,” Olson said.

“I’d appreciate it if you’d do it an open session or actually plan a work session,” Heitschmidt said.

“That’s the reason I’ve got it here,” Olson retorted. “Would you like to go into a work session with some ideas? Would you? I would, always.”

Council member Chris Meierhoff propsed an alternative.

“I’d prefer to just sit in the council meeting and get it taken care of,” Meierhoff said.

Olson agreed to consider the matter at an upcoming council meeting.

In other business:

  • The council passed a resolution designating City Clerk Angela Lange as bond compliance officer. She will be responsible for conducting annual reviews of city bond issues to ensure compliance with financial, continuing disclosure, and IRS reporting.
  • The council authorized Rose Mary Saunders of Ransom Financial and Sarah Steele of Gilmore & Bell, both of Wichita, to prepare a bond issue proposal which would consolidate long-term loans for the water plant and Cedar Street and Eisenhower Road construction. The bond would include funds for flood levy repair, and would save the city approximately $300,000 in reduced interest payments.
  • No public comments were made during a public hearing for a dilapidated property at 656 N. Cedar. A resolution giving the owner 60 days to demolish the structure will be considered at the next council meeting.
  • A canine policy for the police department was approved.

The next meeting of the council is scheduled for Sept. 4

Last modified Aug. 23, 2012

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