04/28/1997 Council Minutes - Laserfiche WebLink

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COUNCIL MINUTES APRIL 28, 1997 for collection through taxes. He noted the interest rate may increase depending on the year the connection is made since the current interest rate is used. Mr. Nyhus stated he contacted a plumbing company which indicated dewatering may be a problem if the conditions are similar to today. Mr. Ahrens agreed this is a consideration. Mr. Powell explained this will vary depending on recent rainfall and snow depth. With regard to the interest rate to be charged, he clarified it is 2% points over the bonding rate. Steve Leese, 74 Marvy Street, inquired regarding the option of reducing assessments to allow them to pay one-half up front and the remaining one-half when the property is sold. He stated the proposed assessment is a high amount. Council Member Kuether asked what would happen if the property is never sold. Council Member Neal explained he did purchase a home whereby he assumed the assessment fee and it was again passed onto the new buyer when he sold. Mr. Leese asked about the process for lot splits. Council Member Kuether explained the property owner would have to make application. Darrell Phillips, 158 Marvy Street, asked why the City adds 2% to the interest rate above the bond. Mr. Powell stated this has always been the City's practice and policy. Mr. Ahrens added all cities add to the bonding rate to cover their costs. Mr. Phillips noted tax payers are always paying on these bonds and he questions the need to add 2%. Mr. Schumacher noted the significant cost to the City associated with the sale of bonds and explained a portion of the 2% goes to cover a portion of that high cost. Council Member Lyden asked if there are other creative means to fund this project, other than bonding, such as using some of the Area and Unit Fund. Mr. Ahrens stated he would need to discuss this with the Finance Director to determine whether it is a viable option. Council Member Kuether agreed it would be nice to be able to do this but she would oppose establishing a precedence and questioned what would happen when the next area is improved. She noted this is not the first area under this type of consideration. Mr. Powell noted the City is already proposing to pay $246,000 from the Area and Unit Fund to bring the project cost down to $560,000. In addition, it is proposed to assess these oversized lots for only a typical residential lot of 10,000 square feet. He noted the 25 possible future home services are also being subsidized until the time in the future when MUSA is extended and the lots subdivided. Mr. Powell stated a project has never been assessed this way before (subsidized and lowering to typical residential lot size) which brings the cost down to a level manageable for the property owners. • Sara Weinke, 7442 Leonard Avenue, asked if construction of the proposed improvements will impact their existing systems. Mr. Ahrens noted there may be a potential impact to wells during PAGE 5