03-27-2019 Council Packet - Laserfiche WebLink

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STAFF REPORT TO: Mayor Keis and Members of the City Council FROM: Heidi Heller, City Clerk DATE: March 27, 2019 RE: Request for Interest Reduction on a Canabury Square HIA Deferred Assessment BACKGROUND: In 2009, the City of Little Canada assisted the Canabury Square Homeowners Association finance a much needed large improvement project on the entire building. The City created a Housing Improvement Area (HIA) at Canabury Square and sold bonds to pay for the project. An HIA assessment was then certified to each unit’s property taxes for a 15 year payment schedule beginning in 2010. Initially these assessments were not allowed to be paid off early since the City was paying interest on the bonds and needed the assessment payments and interest in order to make our bond payments. In 2016 due to several inquiries from the condo owners, the Council changed the policy to allow the Canabury Square assessments to be paid off at any time, but the owners still had to pay the full 15 years’ worth of interest since the City needed that interest for our on-going bond payments. A one-half percent discount on the interest was given to those who paid their assessment in full starting in 2016. In February 2018, the City refinanced the Canabury Square bonds with an inter-fund loan, and notified the Canabury Square residents that they could now pay off their HIA assessments without having to pay the full 15 years of interest. Their payoff amount would now be the balance plus interest for the current year. The HIA assessments have been treated the same as any other assessment that the City certifies to a property, which follows State Statute 429.061. Interest on all assessments (both payable and deferred) is accrued annually and added to the principal balance in one lump amount. If an assessment is not paid by November 15 of that year, the next year’s interest amount is added to the balance. City staff has always followed the assessment policy and has found no evidence of the City making exceptions for assessment payoff amounts. Rosalie Jackson is the property owner of a condominium at Canabury Square and currently has a deferred HIA assessment with a 2019 balance of $17,210.97. Her assessment was initially certified to the property taxes and she made payments from 2010-2013 when she lost her job. She then asked that the assessment be taking off her taxes and deferred since she was over age 65 and qualified for a deferment. The balance of $12,796.26 was then deferred starting in 2014 and has been accruing $735.78 of interest annually for six years. On November 16, 2018, the 2019 interest was added to her balance. Ms. Jackson is in the process of applying for a loan to pay off