Equipment for Song’s Mushroom Farm will not be replaced with relocation funds after the Gays Mills Village Board determined at a special meeting held on July 25 that the replacement did not align with the intent of the grant contract.
Song’s Mushroom Farm is located in the former Gays Mills/North Crawford High School building at 207 School Street.
The discussion began with a presentation of three equipment replacement options by Central Business District Manager Julia Henley. All three bids were for replacement of the shelving on the lower floor, with the lowest bid recommended by Henley coming in at $178,097 for aluminum shelves on wooden frames.
“What are the current shelves made from?” inquired Pat Brockway, Gays Mills Village President.
“Iron,” responded Henley.
“And they can’t be steamed and repainted to kill the mold?” Brockway continued.
“No,” answered Henley, saying that according to Mr. Song, the shelving was contaminated with mold spores and needed to be replaced to stop product loss. “He’s a scientist. He has investigated this, and it’s the only solution.”
Henley explained that the replacement of the shelving would stabilize Nam Song’s production, making him more attractive to outside investors.
“Did you offer equipment replacement to the other businesses?” Brockway asked.
“Yes, but the others hosed their equipment down and went back to work,” Henley answered.
“I was always under the impression that this was not available,” commented village trustee Al Zegiel, owner of Heartland Bakery on Main Street, a flood-affected business.
“No, you indicated you weren’t interested,” Henley replied.
“No, I didn’t want to relocate,” Zegiel responded. “No other business was offered this kind of help. We were all looking for flood proofing and flood mitigation assistance.”
“My walking papers were economic development,” Henley said. “The projects I have worked on have created a number of new jobs. This is about job creation, it was never about flood proofing.”
The village turned to Stan Kaitfors of the State of Wisconsin Department of Administration for clarification of whether equipment replacement qualified for grant money. According to Kaitfors, the criteria for use of the Community Development Block Grant-Emergency Assistance Program funds was set by the village government and was meant for any business affected by the 2008 flood. He and village clerk Dawn McCann left the room to find the village’s copy of the contract and contract amendments. The discussion continued in their absence.
“There has been no talk about flood proofing,” noted trustee Harry Heisz, referring to the Song’s project.
“Has there been any done?” asked trustee Earl Winsor.
“Yes,” Henley answered.
“What have they done?” Winsor continued.
“I can’t say specifically,” Henley replied.
At this point, Kaitfors returned and explained that contract amendment six defined use of grant funds as relocation only.
“I am guessing that this was a step toward attracting investors and moving, but there are no guarantees that it will move,” Kaitfors said.
“Does this project meet the contract requirements?” asked Dale Klemme, Director of Community Development Alternatives, the organization responsible for financial and administrative reporting for the grant.
“This would seem inconsistent with the actions taken in relation to the other businesses,” Kaitfors said.
Klemme asked again if the project would meet the requirements spelled out in the village’s contract with the state for the use of the grant funds.
“If I had to make the determination for whether to approve the project, I would have to ask where the relocation portion is at,” Kaitfors replied.
At this point, Zegiel moved that the equipment replacement be denied and was seconded by trustee Geraldine Smith.
“I have to agree,” exclaimed trustee Harry Heisz. “I don’t want to hang the village out on this.”
With Kaitfors again reiterating the project failed to show a relocation component, Henley retracted her recommendation to make the purchase.
“If this doesn’t meet the contract, then I am certainly not comfortable recommending this,” Henley said.
A roll call vote was taken, and all present board members voted to deny the equipment replacement. Gays Mills Village Trustees Aaron Fortney and Barbara Sand did not attend the meeting.
A decision on the funding for the proposed Bistro to be located in the Gays Mills Mercantile Center will be made at the August 5 regular village board meeting.
Kaitfors informed the board that he had received information from Maxine Brooks, the would-be owner of the Bistro.
“We finally received what we asked for,” Kaitfors said. He noted the amount in question is $37,800 and relates to a Small Business Administration loan taken out by Brooks and her husband, now deceased, prior to the floods.
“There are still some questions about what it was used for and it appears the loan was repaid,” Kaitfors said.
“Can we set that dollar figure aside?” asked Brockway.
“I wouldn’t be comfortable even doing that,” Kaitfors replied. “I need to speak to Eileen (Brownlee, village attorney), before making a recommendation.”
Heisz inquired if Kaitfors could have an answer by the next meeting, to which Kaitfors said he would.
The board expects information from Kaitfors and Brownlee in order to complete a draft budget for the remaining grant funds on Aug. 5.
Zegiel asked if the money were not used for the Bistro project, if it could be made available to other businesses.
“Yes, but quickly,” Kaitfors responded.
“Could it be used for other projects?” Brockway inquired.
“I would be open to a request to do that,” Kaitfors responded.
“It’s critical that by the fifth we know what the decision is,” noted CDA’s Lori Bekkum. “There is a request for another buyout. To get it appraised, bid, and torn down would be hard to do by December if it isn’t started soon.”
Village woodworker Greg Vereschagin expressed interest in relocation if funds were available.
Vereshagin’s workshop is located behind his Pine Street home, but the alley access makes elevation untenable.
The board instructed Henley to begin working with Vereshagin immediately, noting there were suitable sites available both above the Marketplace and by the rescue squad building.
With the environmental reviews approved, Brockway and Son were awarded the contracts for the demolition of the former Blackhawk Auto and funeral home buildings, having provided the lowest bids at $10,320 (Blackhawk) and $11,560 (funeral home).
Brockway abstained from the roll call vote, with Zegiel, Heisz, Winsor and Smith all voting yes.
Kahya Fox of Couleecap informed the board that the Rental Flood Elevation Bids were due the next day and bids will go to the board on August 5 for approval. The demolition bids for 326 Orin Street are due August 30.
Additional discussion and possible action on the remaining CDBG-EAP funds is planned at the August 5 board meting. There is over $612,000 available for projects.
The board may seek both a time extension and an amendment for flood proofing and mitigation for businesses.
Proposed or approved projects with budgets to be determined include:
• more signage for the Gays Mills Mercantile Center (grant eligible)
• the Brooks relocation-Bistro proposal (grant eligible)
• the Vereschagin woodshop business relocation (grant eligible)
• three single-family acquisitions and demolitions (grant eligible)
• village overtime reimbursement under project deliverables (grant eligible)
• flood proofing/mitigation of businesses (contract amendment required)
• single family elevations (contract amendment required)
Restrictions in the contract with the state leave the village with only $877.53 to pay for the remaining administrative costs for the CDBG-EAP grant through December 31, 2013. Upon inquiry from Brockway and Klemme, Kaitfors informed the board that funds could not be transferred from other line items within the budget to cover administration expenses.