Minutes - Council - 10/13/2015 - Laserfiche WebLink

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Mayor Strommen stated while that may work in this case she would want to ensure that the City is fair and equitable across projects throughout time and therefore would not want to set a precedent. Finance Director Lund stated that a statement could be made in the motion that the three years interest free is being offered because the City of Elk River is contributing to the project interest free. City Attorney Langel stated the purpose of the policy is to create uniformity to provide residents with notice of how things will work in the future and therefore there are concerns with tweaking the policy on a case-by-case basis. He explained that the purpose is for the City to recoup their costs. He stated that in this case, this particular project is being financed in a non -typical way and therefore this financing option could be changed as Jarvis Street is unique and would not set precedent. Mayor Strommen stated that the Council has considered for many years how to distribute the cost for road repairs evenly and fairly to residents. She noted that the City is baring the majority of the cost, while the residents on Jarvis are baring a portion of the cost. She explained that as long as the policy is carried through, that ensures that everyone is treated fairly and equally. She noted that in the future interest rates can fluctuate and does not want to see the Council making changes on a case-by-case basis. Councilmember Kuzma asked and received confirmation from staff that the properties were assessed and it was determined that the project would increase property values by $7,500 to $8,000. He noted that the policy is set at 25 percent of the project cost and this is only proposed to be assessed at 13 percent, which he felt was fair. Councilmember Shryock referenced the four percent interest rate and asked if that is based on market rate. She stated that the Council would not want to set precedent by arbitrarily changing the interest rate but noted that she would not have a problem passing on cost savings that the City obtains. Finance Director Lund provided additional information on the interest rate calculation, noting that the City sets the rate at two points over the ten-year treasury rate. Councilmember Shryock noted that the City is bonding for part of the project cost and asked for input from Finance Director Lund regarding the interest and whether passing on that cost savings would have an impact on the City. Finance Director Lund stated that the City does receive three years interest free from Elk River, but the City is still carrying that amount and cannot use those funds for other projects or costs. Motion by Councilmember Kuzma, seconded by Councilmember LeTourneau, to Adopt Resolution #15-10-255 Adopting Assessment Roll Certifying Jarvis Street Reconstruction and Railroad Quiet Zone Improvements; Improvement Project #15-20. City Council / October 13, 2015 Page 9 of 13