07-13-2016 Council Minutes - Laserfiche WebLink

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MINUTES CITY COUNCIL JULY 13, 2016 situation, and notify all property owners in Canabury Square that have active assessments financed by the 2009 bond issue. He suggested the policy statement be: Canabury quare Active Assessment Payoff Policyl In 2009, the City assisted Canabury Square Condominium Association by adopting a Housing Improvement Area that financed needed improvements at the property. To help with the financing, the City issued 15 year taxable General Obligation Bonds with the condition that no early payoffs of these assessments could be made because the City would not be able to earn enough interest on the principal payoff amount to meet debt service requirements. In some cases, that has made it more challenging for owners with those assessments to sell their units. Based on subsequent requests by some of these property owners, the City is willing to accept early payment of the outstanding assessment on the following basis: • Payoff amounts will be calculated for the outstanding assessment years beyond the current year, assuming payment is made by no later than November 15tH • The payoff amount will be determined by adding the outstanding principal and interest due over the remaining assessment term. • A discount factor will be applied to those payments to reflect an approximation of interest the City can earn on those amounts. The discount factor will be determined at the sole discretion of the City and based on conservative estimates of investment returns in a liquid, interest bearing account. As of the date of this policy, that rate is .5% (.005). • The interest discount factor is subject to change based the City's best estimates of interest earning potential. • The interest discount will be applied based on the example in Attachment A, subject to the actual years remaining. The City Administrator stated that related to this is an additional correction needed for the payoff calculation for Unit #223 that the Council recently approved. He explained that in that calculation, he did not allow for any discounting of the interest payments being made, and instead only allowed for the principal amount. He stated that if the Council adopts this policy, he will advise the owner of the additional discount he would be entitled to should he prepay the active assessment before November 15th Keis introduced the following resolution and moved its adoption: RESOLUTION NO. 2016-7-118 ADOPTING THE POLICY TO ALLOWEARLYASSESSMENT PA YOFFS A T CANABURY SQUARE FOR PROPERTY OWNERS WITH ACTIVE ASSESSMENTS FINANCED BY THE 2009 BOND ISSUE, AS PRESENTED BY THE CITYADMINISTRATOR. rd