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City Council Regular Meeting Minutes February 11, 1997 Page 4 1 terms of the bonds will be 15 years. The estimated interest rate of the bonds is 5.2 to 2 53%. The City will add an additional 2% to the interest rate, resulting in an 3 estimated 7.2 to 7.3% interest rate to the residents assessed. 4 Mr. Zurbey questioned the assessment payoff procedure. .5 Morrison stated .that after approval of the bond sale on March 11, 1997, Staff will send 6 a notice-to all affected:property owners explaining the financial procedures. 7 Councilmember Marks asked Mr. Thistle the status of bond market. 8 Mr. Thistle explained the market has been coming down. He noted the City has 9 traditionally been in the market at the right time, late February, early March, when the 10 demand is low. I I Marks noted he had received a telephone call from a resident who would not be 12 affected by this project questioning the amount of increase in tax to other parcels in 13 the City due to the portion of the project funded by the City. 14 Morrison noted taxes will increase by $40,000.00 per year to be dispersed amongst 15 2,500 parcels in the City. 16 Marks indicated this was approximately $8.00 per parcel per year. Mornson noted this 17 was the fourth improvement project, so the amount of increase was a total of 18 approximately $32-00 per parcel per year. 19 Mr. Thistle indicated there is also a benefit to the property owners of an increased 20 property value. 21 Mr. Zurbey asked if the Public Works crew will be involved with the project. 22 Hamer noted he would work with the engineer throughout the entire project. He stated t 23 the Public Works crew does get involved by sweeping the streets, e, c. 24 Mr. Zurbey stated he felt the $400.00 watermain connection fee was high. 25 Hamer noted materials such as copper and stop boxes need to be purchased. The 26 watermain replacement is labor intensive plus there are material costs. Hamer 27 explained the cast iron watermains are being replaced with ductile iron watermains; 28 which are much more durable resulting in savings in repair costs to the mains and the 29 roads. 30 Mr. Morgan asked if there was a contractor deadline for the completion of the project 31 and penalties if the work was not completed as scheduled.