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Oct 23, 2007 4:36 pm US/Central
Rushford Approves Flood Assistance For Businesses
RUSHFORD, Minn. (AP) ―
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DEED Commissioner Dan McElroy said Rushford's new aid package is unprecedented in terms of state aid for flood victims. (File)
Eric Humble
After business owners raised concerns about not being able to pay back flood-relief loans, Rushford city officials approved a new assistance package that forgives 90 percent of them.
The loans would be forgiven over five to 10 years, while the remaining 10 percent of the $17.5 million aid package would come in the form of low-interest loans with payments starting after three years, according to the agreement the City Council approved Monday.
City officials also changed the agreement so that any loan repayment money would go to the city instead of to the state.
The aid is a part a $35 million package for the seven-county flood-ravaged area that's being administered by the state Department of Employment and Economic Development.
"This is a huge step," said Rich Bjorlo, a retired accountant who advised city businesses following the August floods.
Mayor Les Ladewig agreed, saying it will give people a sense of security "knowing that they won't have to pile loan upon loan to get back into business."
Bjorlo and Ladewig were among several who spoke last week at a meeting held by the Senate Economic Development Budget Division. Several business owners told the panel the loans would only worsen the situation.
DEED Commissioner Dan McElroy said Rushford's new aid package is unprecedented in terms of state aid for flood victims.
"It is the single-largest disaster grant we have made to any city and it will help put the community firmly on the road to recovery," McElroy said in a written statement.
While Bjorlo said the new plan will help Rushford businesses more than the first proposal, he said owners will still face hard times for several years. The total loss to businesses in Rushford was estimated at $27 million.
"We will never come out ahead," Bjorlo said.
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