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515 Little Canada Road, Little Canada, MN 55117-1600 <br />(651) 484 -2177 / FAX: (651) 484 -4538 <br />MEMORANDUM <br />TO: Mayor Fahey and Members of the City Council <br />FROM: Joel R. Hanson, City Administrator <br />DATE: June 3, 1999 <br />RE: Concept Discussion — Lowering Interest Rate for Deferred <br />Assessments <br />MAYOR <br />Michael I. Fahey <br />COUNCIL <br />Beverly Scalze <br />Jim LaValle <br />Steve Morelan <br />Bob Pedersen <br />ADMINISTRATOR <br />Joel R. Hanson <br />The City currently has 35 deferred assessments for reasons such as senior citizen <br />deferrals, development deferrals, etc. These deferred assessments accrue interest and <br />given that the deferrals have occurred over a period of time, the interest rate varies. <br />Some interest rates are as low as 6 percent while others are at 12 percent. Many are at <br />10 %. <br />We are currently in the process of notifying those property owners with deferred <br />assessments of the balances that are owing. In looking at these deferrals and the various <br />interest rates, staff has had some discussion about lowering the higher interest rates to a <br />rate comparable to what the City would assess our 1999 projects at this fall. (Best guess <br />would be 6.5% - 7 %.) It would be staff's suggestion not to increase the interest rates on <br />deferrals that might be below that figure. <br />A public hearing would be necessary to change interest rates on a deferred assessment. <br />I would ask the Council to discuss this concept at Tuesday's meeting and provide staff <br />with direction as to how you would like to proceed. <br />Page 28 <br />