MONROE - The City of Monroe Common Council is poised to take the unusual step of backing a portion of mortgage debt for its city administrator to purchase a family home in Monroe.
The council Wednesday passed a resolution 7-2 making available a limited guarantee of up to 30 percent of the initial principal of the administrator's mortgage debt to a local lender. According to the resolution, Phil Rath, who became the city administrator Dec. 6, has not been able to secure financing for the purchase of a home in Monroe for his family.
Rath's family is still residing near Clinton, Wis., east of Beloit.
The resolution also states that, according to city code, the administrator is required to establish residency within the city within six months.
City Attorney Rex Ewald, who drafted the resolution, said the guarantee facilitates the requirement of residency, and fits within the "public purpose" for use of city funds.
The city, officials said, is not spending any money for the purchase of a house - only offering a guarantee to a lender that a portion of the mortgage will be paid if Rath is unable to fulfill his obligation.
Ewald said Rath has been "caught up" in the current housing market and the tightening of bank lending practices.
Chuck Koch, council president, said having the city administrator living within the city limits was important for the city.
"So he can respond in proper time to anything that might come up," he added.
Dan Henke asked if it would help to have the city act as an intermediary for directing payments to the lender.
"I don't think we need additional incentives," Ewald said. ""I'm confident this is going to be enough."
Michael Boyce and Thurston Hanson voted against the resolution.
Boyce said council members were made aware of financial problems Rath had during his interview process, which is a reason why he was not the city's first-choice candidate.
Boyce also said the city's guarantee sets a bad precedence and "sends the wrong message to the community."
"The city is not in the business of lending money to buy a home," Boyce said. "I don't think people will appreciate the city lending money."
The city code that requires residency for the administrator to be established within six months also allows the council to waive the requirement.
Rath was not reached for comment after the meeting.
The council Wednesday passed a resolution 7-2 making available a limited guarantee of up to 30 percent of the initial principal of the administrator's mortgage debt to a local lender. According to the resolution, Phil Rath, who became the city administrator Dec. 6, has not been able to secure financing for the purchase of a home in Monroe for his family.
Rath's family is still residing near Clinton, Wis., east of Beloit.
The resolution also states that, according to city code, the administrator is required to establish residency within the city within six months.
City Attorney Rex Ewald, who drafted the resolution, said the guarantee facilitates the requirement of residency, and fits within the "public purpose" for use of city funds.
The city, officials said, is not spending any money for the purchase of a house - only offering a guarantee to a lender that a portion of the mortgage will be paid if Rath is unable to fulfill his obligation.
Ewald said Rath has been "caught up" in the current housing market and the tightening of bank lending practices.
Chuck Koch, council president, said having the city administrator living within the city limits was important for the city.
"So he can respond in proper time to anything that might come up," he added.
Dan Henke asked if it would help to have the city act as an intermediary for directing payments to the lender.
"I don't think we need additional incentives," Ewald said. ""I'm confident this is going to be enough."
Michael Boyce and Thurston Hanson voted against the resolution.
Boyce said council members were made aware of financial problems Rath had during his interview process, which is a reason why he was not the city's first-choice candidate.
Boyce also said the city's guarantee sets a bad precedence and "sends the wrong message to the community."
"The city is not in the business of lending money to buy a home," Boyce said. "I don't think people will appreciate the city lending money."
The city code that requires residency for the administrator to be established within six months also allows the council to waive the requirement.
Rath was not reached for comment after the meeting.