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owner to defer for ten years with no accumulated interest being charged. <br /> <br />Citizen - If a property owner defers for the full ten years, is the full <br />assessment due at the end of the tenth year? <br /> <br />Mr. Hartley replied that you can defer for up to ten years; at the end of the <br />ten years you must either pay the assessment or begin the ten year payment <br />plan. <br /> <br />Steve Gorecki inquired if the city would go one step further and offer Option A <br />in the case of lateral assessments when they are installed. <br /> <br />Marv Eggum stated that a $2,000,000 trunk line is useless if there are no <br />laterals for properties to hook up to. <br /> <br />Mr. Hartley stated that Mr. Goodrich will provide an answer later in the <br />meeting as to whether or not Option A can be used for the installation of <br />laterals. <br /> <br />Mr. Hartley stated that Option B uses a Minnesota statute that provides that <br />cities can invest in sewer and water projects as though they were a business <br />and collect a service charge or connection charge. The relationship that would <br />exist between the city and the party paying the connection charge is one of a <br />willing seller and a willing buyer. Chapter 444 states that the connection <br />charge established by the city has to have a reasonable relationship to the <br />cost of providing the service. With Option B, the city makes an investment in <br />the utility and when properties are ready to connect to the system, they then <br />pay a connection charge. Option B would have more impact on the city than it <br />would on the property owners because the amount of the connection charge would <br />be very similar to what the special assessment would have been. Property <br />owners could connect to the services whenever they chose to and at that time <br />they would enter into a contract with the city which could stipulate the number <br />of years in which the charge can be paid (10-30 years); assume Council will go <br />with 10 years as special assessments typically run for 10 years. With Option B <br />you pay the going rate for those specific services at the time of connection. <br />With Option B Council has the responsibility of making good business decision <br />like whether the city has the money to invest and if extending utilities to <br />this area is worth the investment. The city does have sufficient tax increment <br />revenue to invest. <br /> <br />Mr. Hartley stated that with Option A the city will pay 60% of the standard <br />assessment for those property owners choosing to begin paying their assessments <br />right away; those property owners deferring for ten years would still derive <br />the same benefit as those beginning payment right away and getting a 60% <br />discount. With Option B property owners do not have to connect to the services <br />within any given period of time. The city makes an investment and expects to <br />get it's investment back; when propertites connect to the services, they pay <br />100% of the cost of those services at that time. <br /> <br />Mary Eggum inquired if the city has money to invest in laterals as well as <br />trunks. <br /> <br />Mr. Hartley replied that the city would not have sufficient funds if too many <br /> Sp Council/12-2-86 <br /> <br />Page 4 of 13 <br /> <br /> <br />