02/12/1996 Council Packet - Laserfiche WebLink

Home Search

COUNCIL MEETING JANUARY 22, 1996 conversations with Alan Brixius, on more than one occasion, he had told her repeatedly there is a letter of credit from D. Erickson's Brandywood Development for about $225,000.00 to cover the reconstruction of 12th Avenue from Birch Street to the end of Brandywood. She said that she kept asking him, "are you sure it is there? How can you be sure it is there?" Mr. Brixius said I know that the money is there, he kept saying that it was definitely there and had to be used up within a certain time frame or we would lose it. Ms Dahl said she checked with her own bank and was told that this was not a problem. The banker said that all the City had to do was renew it for as many years as it was needed through the bank that the letter of credit was drawn on with the developer, which in this case was D. Erickson. Ms. Dahl said that former Mayor Reinert said that they had to approve Trapper's Crossing in order to pay for City water and sewer along Birch Street and 12th Avenue and that the money from Brandywood for the road had to be used in a timely manner. She said that at the beginning, the money was definitely there and now it isn't. Lino Lakes, being a public body is subject to audit scrutiny, why can't we find it and where was it put? Ms. Dahl asked who would like to respond to this? Mr. Ahrens said that when he was first apprised of this project, the money that Ms. Dahl referred to in Brandywood was mentioned to him. He said that he went through the complete file looking for it because obviously it would be a benefit to the City if the City could find $250,000.00. He said he was not able to find any reference to this money in letters and documents, agreements or anything else. Mr. Ahrens said he is not aware of a letter of credit.. He said he is not saying that it is gone or that it is there, personally he as not be able to find it and the people he has talked to have not been able to track it down either. Mr. Ahrens said that he has not been able to track down the escrow amount referred to by Ms. Dahl. Mr. Schumacher said to Ms. Dahl that she had indicated that she had a discussion with Mr. Brixius regarding a letter of credit for Brandywood. Ms. Dahl said yes. Mr. Schumacher said that he was sure that there was a letter of credit for Brandywood and a financial agreement such as the City puts together for all subdivisions. He asked Mr. Ahrens if he had found anything in the Brandywood file regarding that letter of credit. Mr. Schumacher felt that there was some confusion between a letter of credit for the project we are talking about here (Trapper's Crossing) versus the letter of credit for the subdivision itself. He explained that every subdivision that goes in has its own financial package and the developers have to have that before they can market their project. They need to know what it is going to cost. Mr. Schumacher said that the City cannot come back at a later date and say oh we forgot something. The City puts together a financial analysis for the developer and for the City to determine exactly what these costs are going to be. He said he was sure that for Brandywood, this same situation occurred where a letter of credit was given for the development of Brandywood and all the improvements within the project. However, referencing that the $250,000.00. Mr. Schumacher was interrupted by Ms. Dahl who said that the amount was $225,000.00 and it was foor the reconstruction of 12th Avenue. She said that she discussed this at length with Alan Brixius because she wanted to know where it was, how it got there and how he knew. He said it was definitely there. She said Mr. Brixius said this several times to her. PAGE 11