10.3. SR 08-04-2014 City of
Elk=' Request for Action
River
To Item Number
Mayor and City Council 10.3
Agenda Section Meeting Date Prepared by
Work Session August 4, 2014 Cal Portner, City Administrator
Item Description Reviewed by
Houlton Farm Deferred Assessments
Reviewed by
Action Requested
Discuss and provide direction regarding disposition of Houlton Farm deferred assessments.
Background/Discussion
The Trust For Public Land is in the process of acquiring the Houlton Farm property utilizing the
proceeds from the Outdoor Heritage Council grant. The property will then be conveyed to the city.
The property will undergo an updated appraisal to determine the purchase price. As of July 31, 2014, the
property had deferred special assessments of$354,830.69. The appraisal will consider the pending
assessments.
Upon closing of the property,the deferred assessments will be paid by the sellers.
The sellers have asked if the city would consider relief from the assessments similar to the proposal
agreed to during the last grant process that did not come to fruition. The City Council at that time
expressed consensus that the assessments and interest must be paid in full;however they would allow a
reduction if the grant allowed for a continued farming lease to replace the reduced assessment payment.
The current grant is more restrictive than the former and the land may not be farmed whole or in part as
long as needed to offset deferred assessment amount previously considered. The family's representative
has indicated they would sell the property and pay off the assessments provided the city would allow
them to maintain a lease for the tillable portion for agricultural purposes until the planned prairie
restoration commences. Further,the family understands that the city will be held harmless if the Lessard-
Sams Heritage Council demands payment for land leases on publicly purchased property.
Financial Impact
There are no identified financial impacts to the city.
Attachments
• Draft Memorandum of Agreement
• Deferred Special Assessments
P a w E A E U s r
NaA f RE]
August 4,2014
Mr.Jeff Dotseth
Jeff Dotseth&Assoc.Realty,Inc.
26219 Fremont Dr.
Zimmerman,MN 55398
Dear Jeff:
This letter serves to outline an agreement between the City 7+of Elk- ar d�the Houlton-Olson family with
regard to the continued lease of the said property for agricultural purposes. The intent is to allow the
Houlton-Olson family to recover or partially recover amounts paid for deferred trunk water and sewer special
assessments.
The Elk River City Council consensus on the assessments is that they need to be paid in full at the time of
sale of the property consistent with the original assessment policy. That withstanding,the city would be
willing to allow the Houlton-Olson family to continue to earn proceeds from an agricultural lease of the
property while the said property is prepared for natural`1labitat restoration,under the following conditions:
1) The Lessard-Sams Outdoor Heritage Council (LSOHC) Grant Agreement allows agricultural use as a
benefit to the restoration process,and allows the Houlton-Olson family to receive the agricultural
lease payments.
2) The city may begin restoration work on all or any part to the property at any time. The city will give
the Houlton-Olson family notice by January 1 of each year of the acreage,if any,which will be
available for agricultural purposes that year.
3) There are not guarantees to the length of time the property may be used for agricultural purposes.
4) The Houlton-Olson family will be responsible for any requested lease payments from the LSOHC.
Upon conveyance of the property to the city,the Elk River City Council will commission a master plan for
the restoration and operations of the property. During this period,the property would likely not be open for
public use and would,if approved by the LSOHC,be available for agricultural purposes. Upon completion
and approval of the plan,portions of the agricultural land may be under restoration,limiting the tillable
acreage.
The Trust for Public land has indicated that agricultural use of the land prior to native restoration is an
amenable practice.
Sincerely,
John Dietz
Mayor
B. HOULTON DEFERRED SPECIAL ASSESSMENTS
AS OF JULY 31, 2014
Months Total
PID# Assessment Principal Int. Rate of Interest w/Interest
75-005-1100 Sewer Interceptor $1,513.52 12.24% 392 $7,565.18
75-005-1100 Trunk Water/Sewer $100.70 7.50% 235 $248.60
75-004-1000 Trunk Water/Sewer $105,715.15 7.50% 235 $260,984.28
75-133-4200 Trunk Water/Sewer $34,848.66 7.50% 235 $86,032,63
TOTAL PRINCIPAL $142,178.03
TOTAL INTEREST & PRINCIPAL $354,830.69
TOTAL INTEREST $212,652.66