5.3. SR 01-21-1997-'ity of
iver
ITEM 5.3.
MEMORANDUM
FROM:
DATE:
SUBJECT:
Mayor & City Council
Pat Klaers, City Admin~tr~rtor
January 21, 1997 t:~
Rebate of Interest Payment to
Sherburne County
This is an old issue which now needs to be addressed. In about 1975, the city
improved the public parking lot behind the Utilities office and assessed this
cost out to the benefited property owners. The assessment timeframe was 15
years and the interest rate was 7 percent. Sherburne County, across the
street from this project, was one of the benefited property owners and paid
the assessments for about ten years. However, the county stopped payments
in 1985, citing no direct benefit for this project.
Special assessments must be paid before a land transaction can take place.
The county closed on its transaction for selling the administration building to
the school district on 1/15/97. Prior to this closing the county paid the city
$4,113.14 in principal and $3,455.04 in interest. At this time the county is
asking the city for forgiveness of the interest amount.
The city paid the principal on this assessment when the county did not make
its payments. Accordingly, the city also had to pay the interest due on this
part of these bonds. The city also lost revenue on the $4,100 which it would
had invested after the bonds were completely paid. The city could reject the
county's request in its entirety, but in an effort to show cooperation between
units of government and to show support for this school/county transaction, it
is recommended that the city split this interest amount on a 50/50 basis and
that we rebate the county $1,727.52.
Recommendation
It is recommended that the City Council approve a motion authorizing the
payment of $1,727.52 to the county as a partial rebate of their interest
payment for the parking lot public improvement project.
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13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425