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Council tables decision on $98,000 DEED grant repayment as staff, EDA weigh options
Summary
City staff told the Spring Grove City Council that a $98,000 DEED grant used for downtown fire-site cleanup will need to be repaid; the Economic Development Authority asked to delay payment and consider placing funds in a high-yield account. Council tabled the matter until a budget meeting.
Mayor Bryan Wilhelmson and two council members met April 21 as Clerk/Administrator Jana Elton explained that a $98,000 DEED grant used for cleanup of the downtown fire site must be repaid because the grant’s terms cannot be fulfilled as written. Elton said the Economic Development Authority wants to postpone payment and is exploring placing the money in a high-yield savings account until two annual installments are due.
The issue surfaced during Old Business when Elton summarized the grant’s status and the city’s options. "These funds were used for cleanup of the downtown fire site," Elton said, and she added that because the DEED grant was written for a mixed-use building the city cannot meet the original grant conditions as drafted.
Elton described the EDA's preferred approach: "The EDA would like to hold off on payment as long as possible and wanted to look into putting their funds into a high yield savings account to accrue interest until the payments need to be made in two installments per year." She said staff and office employees are researching whether that approach is viable and whether the EDA should cover the full repayment or split costs with the city.
Council Member Michael Hagen moved to table the repayment discussion until a budget meeting where staff can present options; Council Member Morgan Buckland seconded and the motion carried unanimously. The motion leaves the timing and funding arrangement unresolved pending the budget meeting.
The council’s action was procedural: no funds were shifted and no repayment schedule was set. The EDA and city staff will prepare financial options for the upcoming budget meeting so the council can determine whether to absorb the repayment, split it, or pursue alternative remedies with the grantor.
