Habitat, City ‘moving forward’ since July agreement
St. Croix Valley Habitat for Humanity is current on all its loan payments as of Tuesday, Sept. 12, after 13 months of no payments on a $400,000 loan from the city, according to Assistant City Administrator Julie Bergstrom.
The loan was originally given to Habitat in 2012 to fund the Eco Village project, with a 10-year repayment term.
In July, SCVHH and the city reached and signed a forbearance agreement, through which the city agrees not to take legal action against SCVHH, provided Habitat meets the terms of the agreement.
According to the forbearance agreement, SCVHH still owed $262,952 plus interest, attorney's fees, costs and expenses as of July 11, when the agreement was signed.
In the agreement, the forbearance period goes through Jan. 31, 2018. During that time, SCVHH must pay both principal and interest on a monthly basis, and must pay an additional $48,152 before Jan. 31
Provided SCVHH meets the terms of the forbearance agreement, a loan modification agreement will take effect Feb. 1, 2018. Under the agreement, SCVHH will pay a total of $188,872 remaining principal. Provided timely monthly principal payments are made, $77,720 of interest could be waived.
So far, Bergstrom said, things have gone very well.
"They've fulfilled everything in their agreement to date," Bergstrom said. "And I don't know any reason why we can't be successful in this reorganization of their loan."
Habitat and the city were also able to reach an agreement through which Habitat traded a vehicle it did not need to the city. The market value of that vehicle was applied to the outstanding loan.
"I think things are groing great," Bergstrom said.
Habitat interim executive director Randy Boser said much the same.
"I can't change the past," he said. "I can only affect the future. And so, that's my goal is to move this organization forward in an effective, sustainable way."
SCVHH has put a lot of work into stabilizing its finances, he said.
Boser said SCVHH has three sources of revenue: One is the mortgages that Habitat homeowners pay. Those, he said, cannot be changed.
The second is donations and grants from individuals, groups and organizations. The third is profits from the Habitat for Humanity ReStore, now in Roberts.
To ensure Habitat has enough money not only to continue to repay the city and its other debtors, Boser said he is not only pursuing grants and donations, but has also looked at cost-cutting measures.
Boser said Habitat was able to sell some equipment it owned that was useful, but not necessary to SCVHH's work. He's also hoping SCVHH will be able to rely more on volunteers than employees. SCVHH has moved its River Falls office to the ReStore building in Roberts, which he said will save about $13,000 to $14,000 each year.
As required in the forbearance agreement, Boser has been keeping in regular communication with City Administrator Scot Simpson, he said.
He said Habitat is making efforts to have more open communication with the community as well.
In addition to paying off the loan from the city, Boser said his goal is for SCVHH to be able to build one home on a lot it owns in Hammond in the spring. A recipient family has been identified, but nothing will move forward until funding is in place. He's now seeking sponsors for that home.
"We are focused on moving forward," Boser said. "I want to get this home started next spring. I think that will really show the communities and our donors...that we're...doing mission-related work."
He said he hopes that will be a sign that SCVHH is moving forward.
Though the home in Hammond won't likely be a net-zero house, Boser said it will be built with energy-efficiency in mind. For example, it likely won't have solar panels, but it will likely have things like highly-insulated walls, a high-efficiency furnace, etc.
In the future, Boser said he'd like Habitat to get back to doing about two or three homes each year.