Agenda Packets - 2003/08/25 (2) - Laserfiche WebLink

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Item No: 9G Meeting Date: August 25, 2003 Type of Business: Council Business City of Mounds View Staff Report To: Honorable Mayor and City Council From: Charles Hansen, Finance Director Item Title/Subject: Resolution 6082 Setting an Interest Rate and Administrative Fee for Special Assessments Certified During 2003 Certification of several special assessment levies will come up over the next month. These need to have designated an interest rate to be paid over the life of the assessment and a one time administrative fee to cover the initial cost of certifying the assessment. It will be more fair and efficient if these are set once in advance and then applied equally to all special assessments that may come during the remainder of the year 2003. I recommend that the interest rate on special assessments be set at 4.5%. This is probably somewhat higher that the interest rate the City would pay if it were to issue bonds at this time to finance projects. It would provide some margin of safety against the probability that interest rates are likely to rise over the next few years. If residents object to paying the City 4.5% interest, they are free to obtain financing from any other source and pay off the City. The City has no monopoly on financing and offers special assessments as a means of assisting residents to make payments over a period of time. The City Council also needs to set an administrative fee to cover the one-time costs of managing the special assessment process. Since the City of Mounds View hasn’t done special assessments for several years, we don’t have local experience to draw upon to set a fee. At my last place of employment, the fee was $25.00 per parcel. This seems to be reasonable and should at least cover the costs. Respectfully submitted, ________________________ Charles Hansen, Finance Director Reviewed by City Administrator: ________