The URL can be used to link to this page

Home My WebLink About#12 - Special Assessment Deferral STAFF REPORT DATE: 9/19/2023 REGULAR AGENDA ITEM: Approve Resolution 2023-090, A Resolution Granting Assessment Deferral For Hardship to Eligible Properties SUBMITTED BY: Clarissa Hadler, Finance Director REVIEWED BY: Kristina Handt, City Administrator BACKGROUND: The City’s Special Assessment Policies and Procedures for Public Improvements allow for deferral of a special assessment due to hardship. Pursuant to that policy, “the City Council will consider deferment for the payment of special assessments on any homestead property, owned by a person 65 years of age or older, or retired by virtue of permanent and total disability. A hardship may be deemed to exist when the annual principal installment of all assessments levied against the property exceeds two percent (2%) of the adjusted gross income of the applicant as evidenced by the applicant’s most recent federal income tax return, and total assets (excluding the homestead property) do not exceed six times the adjusted gross income.” The excerpted portion of the policy is attached to this memo. The City Council adopted the Old Village 5 & 6 Street and Sewer Assessments on October 19, 2021. The adopted assessment for most residential properties was $26,200; $13,700 for Street and $12,500 for Sewer. The city has received an Application for Assessment Deferral from a property owner subject to these assessments. ISSUE BEFORE COUNCIL: Should the City Council approve A Resolution Granting Assessment Deferral For Hardship to Eligible Properties by taking the following action: “Move to approve Resolution No. 2023-090, A Resolution Granting Assessment Deferral For Hardship to Eligible Properties”? PROPOSAL DETAILS/ANALYSIS: There are three criteria that need to be met to qualify for a deferral due to hardship; 1. The property is owned by a person 65 years of age or older, or retired by virtue of permanent and total disability. 2. The annual principal installment of all assessments levied against the property exceeds two percent (2%) of the adjusted gross income of the applicant. 3. Total assets (excluding the homestead property) do not exceed six times the adjusted gross income. City Staff has reviewed the application, bank statements, and tax returns and found that the applicant does meet all three of these criteria. FISCAL IMPACT: Special Assessment payments of approximately $2500 per year – decreasing over time -- will be postponed until the applicant no longer meets the criteria for the policy. Interest will continue to accrue during the deferral. OPTIONS: 1) Approve the Deferral by approving Resolution No. 2023-090 2) Deny the Special Assessment Deferral. ATTACHMENTS: 1) Resolution No. 2023-090 2) Special Assessment Policy (deferral excerpt) Resolution 2023-090 CITY OF LAKE ELMO WASHINGTON COUNTY STATE OF MINNESOTA RESOLUTION 2023-090 A RESOLUTION GRANTING ASSESSMENT DEFERRAL FOR HARDSHIP TO ELIGIBLE PROPERTIES WHEREAS, the City approved the Final Assessment Roll for Old Village Phase 5 & 6 Street and Utility Improvements on October 19, 2021; and WHEREAS, under the City of Lake Elmo Special Assessment Policies and Procedures for Public Improvements, certain assessments are eligible for deferral under certain circumstances; and WHEREAS, the City Council will consider deferment for the payment of special assessments on any homestead property, owned by a person 65 years of age or older, or retired by virtue of permanent and total disability. A hardship may be deemed to exist when the annual principal installment of all assessments levied against the property exceeds two percent (2%) of the adjusted gross income of the applicant as evidenced by the applicant’s most recent federal income tax return, and total assets (excluding the homestead property) do not exceed six times the adjusted gross income; and WHEREAS, the City Council may also determine, on a case by case basis, the existence of a hardship on the basis of exceptional and unusual circumstances not covered by these standards and guidelines, if done in a non-discriminatory manner and without giving the applicant an unreasonable preference or advantage over other property owners; and WHEREAS, during the period of deferral, interest shall be applied annually to the unpaid principal balance at the rate established on the original special assessment, or as adopted by resolution of the City Council at the time the original assessment is adopted; and WHEREAS, the deferment shall terminate and all principle and interest becomes due and payable upon the occurrence of any of the following events: (1) The death of the owner when there is no spouse whom is eligible for deferment, (2) The sale, transfer or subdivision of the property or any part thereof, (3) The property should lose its homestead status, (4) The City Council should determine that the hardship no longer exists. A review of the hardship will be conducted every three to five years; and WHEREAS, the City has received application for deferral from certain property owners claiming eligibility for deferral under the 65 years of age or older provision of the policy. City Staff has reviewed the application, bank statements, and tax returns and found that the applicant does meet the criteria for deferral according to the policy. Resolution 2023-090 NOW THEREFORE BE IT RESOLVED, that the City of Lake Elmo grants a special assessment deferral to the following property owners: Property Owners: Michael & Anne Stark Property Address: 3284 Kraft Circle N., Lake Elmo Parcel ID#: 14.029.21.41.0022 Original Assessment: $ 26,200.00 (Street $13,700, Sewer $12,500) Balance to be Deferred: $ 23,123.34 (Street $11,873.34, Sewer $11,250) Interest Rate: 3.25 % ADOPTED BY THE CITY COUNCIL OF THE CITY OF LAKE ELMO THIS 19TH DAY OF SEPTEMBER 2023. CITY COUNCIL CITY OF LAKE ELMO By: _____________________________ Charles Cadenhead Mayor ATTEST: ________________________________ Julie Johnson City Clerk CITY OF LAKE ELMO SPECIAL ASSESSMENT POLICIES AND PROCEDURES FOR PUBLIC IMPROVEMENTS Section V. General Assessment Policies Excerpt (page 12-13) O. Assessment Deferral for Hardships: The City Council will consider deferment for the payment of special assessments on any homestead property, owned by a person 65 years of age or older, or retired by virtue of permanent and total disability. A hardship may be deemed to exist when the annual principal installment of all assessments levied against the property exceeds two percent (2%) of the adjusted gross income of the applicant as evidenced by the applicant’s most recent federal income tax return, and total assets (excluding the homestead property) do not exceed six times the adjusted gross income. The City Council may also determine, on a case by case basis, the existence of a hardship on the basis of exceptional and unusual circumstances not covered by these standards and guidelines, if done in a non-discriminatory manner and without giving the applicant an unreasonable preference or advantage over other property owners. During the period of deferral, interest shall be applied annually to the unpaid principal balance at the rate established on the original special assessment, or as adopted by resolution of the City Council at the time the original assessment is adopted. The deferment shall terminate and all principle and interest becomes due and payable upon the occurrence of any of the following events: (1) The death of the owner when there is no spouse whom is eligible for deferment, (2) The sale, transfer or subdivision of the property or any part thereof, (3) The property should lose its homestead status, (4) The City Council should determine that the hardship no longer exists. A review of the hardship will be conducted every three to five years.