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D. Meeting Date: 2/9/94 Agenda Item: P 2 CITY OF FALCON HEIGHTS REQUEST FOR COUNCIL CONSIDERATION ITEM DESCRIPTION: Proposed cooperative agreement for financing and construction of street and related improvements between the City of Falcon Heights and the Roseville Independent School District Number 623 for improvements at Falcon Heights Elementary School at 1393 Garden Avenue SUBMITTED BY: Susan Hoyt, City Administrator Peter Bachman, City Attorney REVIEWED BY: Currently under review by John Thein, Assistant Superintendent of Roseville School District EXPLANATION /SUMMARY: The proposed agreement between the City of Falcon Heights and the Roseville Area School District 623 provides for certain guarantees for the city and school district in carrying out a special assessment for improvements to Falcon Heights Elementary School. The city has the funds available to loan for financing these costs from its sanitary sewer fund for a five year period to cover the 250,000. Even with this outstanding loan, the sanitary sewer fund would have enough money to pay for unanticipated sewer reconstruction and to cover any shortfall in revenue created by MWCC rate changes. The proposed agreement guarantees that the city will not incur any loss in interest revenue or out of pocket costs for this special assessment to the school district. In very brief it includes the following: 1. The special assessment shall not exceed 250,000. 2. A five year payment period with equal, annual payments of principal shall be established with interest starting the day after the special assessment is levied and with the first payment due on the first Monday in January, 1995. 3. The compound interest rate shall not fall below the city's current rate of return on all of its investments or 6.1%. 4. If the city's interest rate of return on all its investments exceeds 6.1 in the city's most recent quarterly financial report, the interest on the special assessment shall be adjusted upward to capture the additional interest that the city is earning on its total investments. 5. All attorney, engineer, and other consultants (if used) fees associated with these improvements and special assessment shall be covered by the school district. Staff time and out of pocket costs for $600. This shall not include inspection costs that are routinely associated with city building activity. 6. The school district waives all rights to public notices and public hearings under Mn. Statute Chapter 429.