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<br />The other two properties that the city rents to Love Elk River are done on a "break-even" <br />basis. In this regard, the city tries to ensure that its expenses for insurance, taxes, recently <br />completed improvements, and anticipated future repair/maintenance expenses are all <br />covered within the monthly rent amount. If the city spends $10,000 making improvements <br />to the Koehler house, then it needs to recapture $333 in rent per month (based on renting <br />for 30 months). This amount combined with taxes, insurance, and some allowance for <br />additional expenses (another $300) may make the rent too high for Love Elk River when <br />they factor in their operating expenses for utilities. <br /> <br />The rental of the KoeWer house to Love Elk River is a difficult issue. I have a concern that <br />this house may have too many expensive issues arise in the future that the city would be <br />responsible for after the family moves in; and that ultimately the city will get trapped <br />financially between the need to make repairs and the need to be fair to the family and let <br />them remain in the house without a rent increase. I would like to continue working with <br />Love Elk River and have the city help in providing transitional housing; but with this house I <br />ultimately have to recommend that we not rent to Love Elk River and that the property be <br />cleared and house removed as soon as possible. <br /> <br />$: \ Council \Pat \2004 \Kochlerupdate091304 .doc <br />