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15. Are the fees and/or interest tax deductible? A) No they are not tax deductible according to IRS regulations. GVhile the City cannot provide tax advice, it maybe possible to gain tax deductibility ofihe interest portion ofthe fees through a home equity loan if you itemize deductions. For example, US Bank was recently offering a 4.49% loan rate on a line of credit with a 10-year repayment term. This requires a 70% loan to value ratio and checking and savings account at their bank. If~your loan to value ratio is at 90%, then the current r°ate would be 5.49%. The rate will move as the prime rate moves, but options to lock to a permanent rate do exist 1'her°e are no closing costs with this loan. (This rate may have dropped with the recent rate cut by the Fed.) The City of Little Canada is not attempting to promote anV bank's products or services over another, but is providing this information as an example. Further, please contact your tax advisor to make sure this program makes sense for your personal situation. 16. What happens to the City if someone defaults on the payment of his or her fees? A) On a short-term basis, the City would have to absorb the delinquency out its cash flow to make debt service payments. But, because this fee is part of the property tax bill, the Ciry will recover its investment either when properly taxes are br°ought current (such as at the lime of sale to another party) or through tax forfeiture proceedings. Even a foreclosure on the property does not negate the fees assessed. 17. Can the City assess fees to individual members of our association even if our association documents require a vote of the members to borrow money or impose assessments? A) Yes, if the HIA is adopted. By creating an HIA, the City is effectively bypassing the association's by-laws and assessing fees directly to the property owners. This is a primary reason the ILIA law was enacted given the difficulty of associations to incur debt or provide for long-term assessment to its members. That is why an HIA is considered "financing of last resort". 'the legislature recognized that if associations were unable to undertake improvements to property, negative consequences could result to individual owners in terms of protecting their investment. By giving individual owners the ability to veto the creation of an HIA, they still retain the power Co determine if a project makes sense to them or not. As has been said many times, the City ofLittle Canada is not interested in•for•cing a project upon you. Rather, the decision is yours and we are simply trying to help,find a way to make a project feasible. 18. Why are rainwater gardens a part of this project? A) Ramsey/Washington Metro Watershed District, as have a number of other agencies, adopted more aggressive storm water treatment ordinances to minimize pollution ofour wetlands, lakes, and streams. The City just adopted new standards in this regard as well in response to State and Federal requirements. Rainwater gardens are designed Co treat the first inch of rain that falls during a storm event by allowing infzlh°ation of water as a means to prevent pollutants from entering other water bodies. These standards have been in place for a few years now. Ciry street projects have had to comply with these new treatment standards as does any development that disturbs over one acre ofsurface area (the City's newly adopted ordinance reduces that threshold to 2Q 000 square feet). Avoiding the requirements is not an option. 19. Does the City need to manage this project for us? A) No, that decision is up to you. The reasons for City invoh~ement have been as follows: L Your association did not have the ability to,finance the project. 2. Your association wanted expertise in the estimating, design, and oversight of the project to ensure the project is constructed as planned.