CC PACKET 06041996 - Laserfiche WebLink

Home Browse Search

MEMORANDUM DATE: May 21, 1996 TO: Mike Mornson, City Manager FROM: Roger Larson, Finance Director ITEM: SPECIAL ASSESSMENT - 1ST YEAR INTEREST POLICY With the pending 1997 road project, I would like to suggest we evaluate and set a policy for 1st years interest charges. Upon review of St. Anthony's special assessment policy, there is not a clear definition of when interest charges commence the first year. State statue defines that if no policy exists, interest charges may begin 30 days after passage of the resolution setting the final assessment. In St. Anthony's case, we set the cost of the assessment before the project begins and often proceeds the actual construction by two to three • months. It then becomes impractical to charge interest earnings for a project that has yet to begin. These charges would be viewed as excessive and to the taxpayer quite unfair. I discussed this issue with former City Manager, Tom Burt, and his direction to staff was to commence interest charges when the project was completed. Using this administration technique, interest charges have began at three different time periods because some road projects have been completed sooner than others. From my point of view, it seems inconsistent to administer interest different for each project. St. Anthony could be challenged as to why we charge one project differently from the other. Keep in mind that if a taxpayer pays the assessment in full on or before November 30th of the project year no interest is charged. However, if payment is made after November 30th, the first years principal and interest charges are assigned to the property taxes. The first years interest charges are not for 12 months, rather, they are the sum total of one year plus the interest charges for the year of the project. Under our present administration methods, St. Anthony residents have been assessed for 14, 16 and 17 months interest on their first years tax statement. This often generates calls and questions as to the amount of interest being charged. Based on the number of calls we receive and my concern to administer all projects equally, I 0 am requesting Council review this issue at an upcoming work session.