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MINUTES <br />CITY COUNCIL <br />JUNE 8, 1999 <br />INTEREST The City Administrator reported that the City currently has deferred <br />RATE ON assessments on 35 properties. These are accruing interest from a low <br />DEFERR~D of 6% on some assessments to a high of 12%. The majority are at 10%. <br />ASSESSMENTS In reviewing this situation, staff has been discussing the possibility of <br />lowering these hi~;her interest rates effective January oF2000 to a rate <br />comparable to what the City will sell bonds for this fall. <br />Fahey indicated that the City has to ensure that the bond interest rate is <br />being covered. The Administrator pointed out that most of these bond <br />issues have either been paid off or refunded. <br />Morelan pointed out that while interest rates are currently low, they could <br />increase and then the City would have to adjust these rates upwards. That <br />would be a much more difficult process to accomplish. <br />Fahey suggested that the City would have to conduct a periodic review to <br />ensure that interest rates are equitable. <br />The City Administrator also pointed out that public hearings would have <br />to be held to adjust the interest rates. This could be done in the fall when <br />bonds are sold and an interest rate determined for these bonds. <br />Pedersen su~gested that perhaps some sort of interest rate index should be <br />enacted to avoid the need to have hearings to make interest rate <br />adjustments. The City Administratar indicated that assessment procedures <br />are governed by State Statute, but suggested that he would research this <br />suggestion to determine if it can be done. <br />Mrs. Scalze introduced the following resolution and moved its adoption: <br />RESOI, UTION NO. 99-6-138 - ACCEPTING CITY STAFF'.S <br />RECOMMENDATION REI.ATIVE TO ADJUSTMENT OF <br />INTEREST RATES ON DEFERRED ASSESSMENTS <br />The foregoing resolution was duly seconded by LaValle. <br />Ayes (5) Scalze, LaValle, Morelan, Pedersen, Fahey. <br />Nays (0). Resolution declared adopted. <br />BIAGINI The City Administrator reported that he just received a draft of the <br />D~VELOPMENT Biagini Development Agreement and suggested that this matter be <br />AGREEMENT discussed by the Council at its next meeting. This will give staff an <br />opportunity to review the a~reement and prepare a recommendation for <br />the Council. <br />10 <br />