WASHINGTON — An update on the Neighborhood Stabilization Project by Andy Myszak of Myszak & Palmer Development was the second contentious issue of the Washington City Council meeting Monday night.

The $4.1 million grant project, started in 2010, included the construction of 19 new homes and remodel of a 20th home on the city’s west end. It also included the infrastructure for Westwood Crossing, phase II of the effort to improvement the neighborhood, which includes 37 rental units and a community building.

Myszak said the 19 new houses are complete, and the remodel will be finished in about two weeks.

“We’ve sold eight homes to date and we have an offer on the ninth right now,” Myszak said, adding there was an influx of applications following a Times Herald story in September on the homes. “The intent is to wrap this project up by the end of the year. Once they’re sold, they’re on the tax roll.”

The city has until March 2013 to sell the homes according to the grant terms. Councilman Mike Singleton asked Myszak to confirm that the city is in no way responsible for any unsold homes when the deadline arrives. Myszak said the Washington Housing Authority will take on any homes remaining unsold at that time, and they still will have to follow the terms of the grant as far as income qualifications.

“They started out at $95,000, and now they’re $79,000,” said Councilman Jim Greene. “Who pays the difference?”

Myszak replied, “The grant.”

A patron at the meeting complained that he purchased one of the first homes at a price of $95,000 and now they’re selling for $79,000. He felt it was unfair he had to pay full price and now other buyers won’t. Myszak and Mayor Joe Wellman explained the houses must be sold, and just like any other house sale, if it’s not selling for the asking price, the price is dropped.

“You’re just saying the price of the house is driven by market value?” asked Singleton.

Myszak replied, “Exactly.”

Another hot-button issue was the phase II rental properties called Westwood Crossing and use of the community building. There will be eight multifamily units made up of 37 apartments, and Myszak said there are already 85 applicants for the units. He said six of the buildings are complete, and the remaining two should be ready by the second week of November. Those residents also must meet specific income guidelines.

Two home owners present, and several council members, said they were unaware any neighboring structures would be rentals. The home owners also said they’ve been told they can’t use the community building.

Myszak said Westwood Crossing has always been a rental project, and all neighborhood residents should be able to use the community building.

In other business:

• A resolution was read stating the city accepts the Kiwanis Cabin, located on city property in Eastside Park, as a gift from the disbanding Kiwanis Club, which has provided 90 years of service to the community. Wellman said the cabin will continue to be an asset to the community. Kiwanis will include deposits already made for upcoming rental dates.

• An ordinance for appropriation and tax rate for 2013 was introduced and will be up for adoption at the next council meeting. The proposed tax rate is $2.3887, and the proposed property tax levy is $4,414,343.

• Elaine Wellman with Daviess County Community Foundation, representing Jeanne Fields, made a $254 check presentation to city parks Superintendent Mike McLemore. The money was from the 20th Century Chevy Car Club Fund, started in 2006 to provide improvements and maintenance at Eastside Park, which the club uses annually for its carfest.

• Wellman also had a $344.50 check for Little League from the Midwest Natural Gas Corporation Fund, but no one from Little League was present to accept the check, which is designated for improvements and enhancements to the sports complex.

• Cindy Barber, Extension economic and community development associate, presented information to the council on a program called “On Local Government” to be available Monday from 11 a.m. to 1 p.m. The topic of the streaming video will be the 2012 property tax. It can be viewed at the Washington Carnegie Library or online, and interested individuals should register by noon Friday by contacting Barber at 254-1060, ext. 279, or cabarber@purdue.edu.

• Trick-or-Treat hours in the city were set for 5 p.m. to 8:30 p.m. Oct. 31.

• The next city council meeting was moved to Nov. 13 because of Veterans Day observance on Nov. 12.  

• The Board of Public Works and Safety approved the closing of S.E. Second St. from Main Street south to the German American Bank parking lot, and Main Street from S.E. Second Street west to S.E. First Street for German American’s first Kids Fall Festival from 5 p.m. to 7:30 p.m. Oct. 29. Roberta Graber was on hand to explain the event to the board. She said the police K-9 unit will have a demonstration, there will be a fire truck there, games and prizes, food and pony rides. She said the bank hopes to make the festival an annual event.

• A request from First Baptist Church to close N.E. First Street between Walnut and Hefron streets from 4 p.m. to 8 p.m. Oct. 28 for their annual harvest festival also was approved.