Others have provided good advice about the technical skills a good
sysadmin should have. They're totally right (I'm a sysadmin/developer,
and what they described is what works best for me...)
I don't understand your business at all or the state you're in, but is
having a full-time, on-site sysadmin really necessary? By restricting
yourself to local candidates you've just shut out the majority of people
with the skillset you're looking for.
Rails is still young. Finding someone with Rails experience who prefers
system administration is a challenge no matter what. It may be that
there simply are no people in your area who A) have the skills you
require and B) need a new job.
I'm not trying to tell you how to run your business of course, this is
just something to consider. Are you sure you're going to have enough
work to keep someone busy ~40 hours a week? And are you sure they need
to be close enough to touch?
Good luck at any rate. Wish I was looking