1988.07.21 CC Minutes - Laserfiche WebLink

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Z Special Meeting of the City Council - July 21, 1988 Page 2 Mayor Atkinson then called on the city administrator to review the financing and assessments for this project. City Administrator Huber - emphasized that the proceedings were being conducted pursuant to Chapter 429 of the Public Improvement Code. He stated that if this improvement was ordered, the financing would be done through the issuance of bonds pursuant to Chapter 475 of Minnesota Statutes. The city administrator then reviewed the advantages of doing this project now as opposed to waiting to a later date. He stated that a study done by Washington County in 1984 indicates that properly maintained gravel roads are approximately $800.00 per mile/year more expensive than maintenance of existing bituminous roads. He then outlined what costs are taken into consideration to determine the total project cost. He stated that the financing proposal presented to the City Council this evening would involve the sale of approximately 1 million dolars in bonds with a debt repayment schedule of 15 years at an estimated interest rate of 7.75%. He pointed out that the total principal and interest payments over that 15 -year period would be approximately 1.75 million dollars. The estimated debt payment to retire these bonds was estimated at approximately $110,000 annually. He then pointed out that the source of revenue for the the retirement of this debt would be as follows: $70,000 of existing tax levy, $21,000 projected assessments to be collected, and $19,000 of additional tax levy over and above that currently levied by the city. Mr. Huber then reviewed how the assessment rate was determined, and pointed out that the current projected assessment rate of $3.85 per lineal foot was only an estimate. Although this cost should be fairly accurate, it was emphasized that it could change by 10% plus or minus. He pointed out that the actual assessments for the project would not be determined until project completion and an assessment hearing is held in 1989. He stated that only benefiting property adjacent to the improvements would be assessed. Mr. Huber then reviewed how the assessment rate would affect both interior lots and corner lots with regard to the city's assessment policy. He stated that property owners would have the option of prepaying the assessments or paying the assessment off with their taxes over a 15 -year period at approximately 9 1/2 percent interest. He pointed out that if the actual size of the project is reduced, or the amount of benefiting property is reduced, the uniform assessment rate must also be adjusted. Mayor Atkinson then opened the meeting for public comments from the audience. Of the approximate 200 people present, many addressed the Council and expressed their support for the project. There were also many expressing opposition, particularly to the Homestead Avenue improvement proposal. Residents along Homestead Avenue stated that they had moved to Hugo to live in the country, and were satisfied with gravel roads, and had no interest in urbanizing the area by the installation of permanently surfaced roads. Mr. Fran Miron and Mr. Robert Waller addressed the Council and stated they were in opposition to the improvement of Homestead Avenue because of the cost involved, unless property owners would be allowed to subdivide their property and recover some of the cost of the improvement. Several residents of 132nd Street addressed the Council and indicated their opposition to the project. George Atkinson noted that the 132nd Street improvements were not a part of Phase 1 and were not being