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Denison City Council allows housing agency to use $10,000 more in LMI funds to complete house

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The Homes for Iowa house is pictured on its lot at the intersection of Avenue C and 2nd Avenue North, waiting to be rolled off a trailer and onto its foundation. Photo by Gordon Wolf

To make sure the Denison Community Housing Agency has enough funds to complete its first Homes for Iowa housing project, the city council on Tuesday approved a motion that the agency could use $10,000 more from the city’s low- to moderate-income (LMI) fund.

The council had already approved the agency’s use of up to $165,000 in LMI funds, but as it is the agency’s first experience with a Homes for Iowa project, some unforeseen expenses were encountered.

City Manager/City Engineer Terry Crawford said the budget for the project is approaching the $165,000 mark.

City Clerk Lisa Koch said increasing the amount of LMI funds to the housing agency will not require a budget amendment because the entire $300,000 in the fund is budgeted every year and just remains in that fund if it is not used.

The house was delivered from Newton to Denison earlier this month.

Homes for Iowa is an Iowa Prison Industries affordable housing initiative. The houses are built near the Newton Correctional Facility by offenders, who are trained in the skilled building trades.

Crawford listed the following work that needs to be completed.

Installing front steps; quotes are being requested for that.

A finish board needs to be added to the bottom of the house where it meets the foundation.

Electrical hookup; Crawford said that should have been figured in, but he is taking quotes for that work. He is estimating an expense of $1,000-$1,200. Denison Municipal Utilities will provide the power from the service to the electrical box and the electrical contractor who submits the low quote will connect the service to the meter socket and wire that into the house’s electrical panel.

Flooring was an expense that had been budgeted for. Crawford has a quote from a local provider but is seeking a couple more quotes.

At the housing agency meeting on October 12, it was noted that eves have to be added to the house.

At Tuesday’s city council meeting, Crawford answered a question that had been raised at the previous week’s housing agency meeting – if the wrong house had been delivered to Denison because there was no hole in the floor for the steps leading to the basement.

Crawford explained the contractor, Frazier Contracting, of Denison, is cutting the hole in the floor as part of its work.

“The reason the hole wasn’t’ put in when it (the house) was constructed is that one of the beams has to be cut. If that had been done before the house was transported, it would have moved more while traveling and there would have been more cracks,” Crawford explained.

Frazier is building the basement steps, which is part of the work that was already in the budget, but walls and handrails have to be put along the sides of the basement steps. That was something that hadn’t been included in the original budget.

Councilwoman Jessica Garcia asked if the city should have been aware that the walls and handrails were needed. Crawford agreed but added had it been in the original plans, Frazier would have quoted it; it is a difference of being in the original quote or being quoted now.

Crawford added that the housing agency hopes to get a double-wide driveway poured and a curb cut completed where the driveway meets 2nd Avenue North. The public works department will pour the driveway, which means the only expense out of the budget would be for the concrete.

Garcia also asked when the council could see the interior of the house. Crawford said some temporary steps would have to be put up to the doorway.

He hopes the house will be on the market before bad weather arrives, which he added would mean pretty soon.

The housing agency will sell the house at cost, which would be $175,000 if all the LMI funds current allowed are expended on the project.

Koch explained that the house is being marketed to a family that meets the LMI guidelines. If it is sold to an LMI-eligible family, the housing agency could use the funds paid for the house for any purpose they decide upon, and not necessarily only for another LMI project.

If the housing agency is unable to market the house to an LMI-eligible family and it is sold to someone who doesn’t meet those income guidelines, the money paid for the house would have to go back into the city’s LMI fund.

Mayor Pam Soseman said the housing agency wants to sell the house to an LMI-eligible family and continue with a rotation of Homes for Iowa houses.

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