Laserfiche WebLink
Council member Elvig inquired about leasebacks and allowable charges to the tenant. <br /> <br />Ms. Ruehle replied the City is allowed to subtract its expenses from the revenues generated from <br />leascbacks. The remaining revenue must be retuned back into the loan program. It is her <br />understanding that the City cannot charge the tenant for taxes on the property. <br /> <br />Councilmember Cook expressed concern with liabilities associated with the City leasing out a <br />property like the gun shop. <br /> <br />Mr. Ruchle replied the City Attorney could provide information regarding the types of insurance <br />that would be required. <br /> <br />City Administrator Norman indicated staff would like to discuss the possibility of developing a <br />financing program where the City would purchase certain properties, with the smaller parcels <br />going through the RALF program. After purchasing the properties the City would lease them out <br />and wait two to four years until the parcel is eligible for the RALF funding cycle. He indicated <br />staff will put a cash flow analysis together. The buildings may be able to be rented out with the <br />payments covering the annual payment on the bonds until the property is eligible for RALF <br />funds. <br /> <br />Councilmember Elvig stressed the need for a policy of consistency with the parcels leased back <br />under the RALF program and the parcels under this program that would require a payment to <br />cover thc bond payment. He noted there will be an actual cash flow issue with bonds, while the <br />income would not matter with parcels utilizing RALF funds. <br /> <br />Councihnember Cook expressed concern that a property could break their lease and the City <br />would not have the needed funds for the bond payment. <br /> <br />Ms. Ruchle advised the thing to be cautious of with the proposed program is that the RALF <br />program is only around as long as the policy makers let it be around. <br /> <br />City Administrator Norman indicated this is not seen as a risk because the City would own <br />commcrcial property that has a value. <br /> <br />Councihnember Strommen requested that the cash flow analysis of this program include the tax <br />impact if the City were to own this strip of land along Highway 10. <br /> <br />Councihncmber Elvig requested the tax impact analysis include information regarding the <br />properties that may be leased back. <br /> <br />City Administrator Norman indicated the City recently completed negotiations for the purchase <br />o1' the Itamilton property. He would like informal direction to write a letter to be signed by the <br />Mayor stating that the City is happy this process has been completed and reminding the <br /> <br />City Council Work Session/May 3, 2005 <br /> Page 4 of 8 <br /> <br /> <br />