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Page 2 2. The City of Lauderdale may make its payment toward the end of the contractor's project billing, probably late November or early December of 1993. This is to assist you with budgeting for the project, which is not included in Lauderdale's 1993 budget. The City of Falcon Heights will withhold a portion of the final payment until summer, 1994. However, this will not be the Lauderdale portion of the payment. 3. The City of Falcon Heights is prepared to make this a three to five year loan for the City of Lauderdale at 8% compounded interest, if this is considered desirable by Lauderdale. The 8% interest reflects the interest market. It is higher than the 6 1/2% that the City of Falcon Heights is charging its property owners for their share of the cost because these costs are assessed to the property and don't rely on a contract as a guarantee. 4. The work done in the City of Lauderdale will be covered in the contract between the contractor and the City of Falcon Heights. All guarantees and warranties will apply to the work in both cities. And, Lauderdale may contact the City of Falcon Heights engineer regarding questions about the project and the quality of workmanship. Please let me know what you and your council think about how to handle this. (I'll also have our attorney review it.) In the interest of moving things along, I've told our city engineer that he should be available to respond to your questions about the project. Again, I thank you and your council for your willingness to work with the City of Falcon Heights on this project. Both the city council and staff have enjoyed the small, but fruitful opportunities that the two cities have initiated. The Falcon Heights council looks forward to working on more activities with Lauderdale. And, if in the future, these projects include coordinating street projects, we'll begin the process at an earlier time in the project planning. V y truly yours, Susan Hoyt City Administrator