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Home My WebLink About5I Special Assessment Report 4646 Dakota Street SE Prior Lake, MN 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: NOVEMBER 23, 2015 AGENDA #: 5I PREPARED BY: JANET RINGBERG, ACCOUNTING SPECIALIST PRESENTED BY: DON URAM, FINANCE DIRECTOR AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING THE DEFERRAL OF SPECIAL ASSESSMENTS FOR ARLIS FARMER DISCUSSION: Introduction The purpose of this agenda item is to consider the requests by property owners in the Mushtown Road, Maple Lane, Panama Avenue improvements area to defer their special assessments. History City of Prior Lake Code 111.100 provides for a deferral of special assessments on homestead property owned by a person who qualifies under one of the hardship criteria set forth in subsections 111.200 and 111.300. Section 111.200 1. Any applicant must be sixty-five (65) years of age, or older, and must own a legal or equitable interest in the property applied for which must be the homestead of the applicant. 2. The annual gross income of the applicant shall not be in excess of the income limits as set forth by family size for the City of Prior Lake, At- tachment A to Ordinance 86-03 (adjusted annually in conjunction with the Minneapolis-St. Paul Consumer Price Index). Calculation of the to- tal family income shall be determined by the summation of all available income sources of the applicant and spouse. Income specified in the application should be the income of the year preceding the year in which the application is made, or the average income of the three (3) years prior to the year in which the application is made, whichever is less. 3. The total special assessments to be deferred exceed one thousand dollars ($1,000.00). Section 111.300 Exceptional and Unusual Circumstances For any individual who does not qualify under the conditions set forth in subsection 111.200, the following conditions may qualify an applicant for assessment deferral. A hardship is deemed to exist if the applicant meets all of the following conditions: 2 1. An applicant must be retired by reason of permanent and/or total disa- bility and must own a legal or equitable interest in the property applied for which must be the homestead of the applicant. 2. Same as above. 3. Same as above. Per City Code 111.101, an application for deferral of special assessments must be made within thirty (30) days after the adoption of the assessment roll by the City Council. The City Council adopted the special assessments for the Mushtown Road, Maple Lane, Panama Avenue improvement project (#TRN14-000001) on October 26, 2015 so property owners have until November 26, 2015 to submit an application. Current Circumstances As of the date this agenda report was prepared, only one (1) special assessment deferral application had been received as follows: File No. Name Property Address PID Legal Descrip- tion 15-001 Arlis Farmer 17136 Maple Lane SW 254200130 P/O Lot 13 Maple Acres If any additional applications are received by the due date of November 26, 2015, City Staff will present this information at the City Council meeting. City Code 111.200 provides the criteria that must be met in order to meet the hardship determination. Arlis Farmer currently meets all of the criteria. Conclusion The City Council, by majority vote, shall either grant or deny the deferment and if the deferment is granted, the City Council may require the payment of interest due each year. Renewal applications will be approved by the City Manager for those cases whereby the original conditions for qualifications remain substantially un- changed. ISSUES: Arlis Farmer currently meets all of the criteria established by City Code 111.200 for the hardship determination. Historically, when deferments have been granted, both the principal and interest portions have been deferred. Interest is accrued during the normal term of the special assessment. A renewal application must be received from Arlis Farmer no later than September 30 of each year in order to maintain the deferred status. Upon Council approval, Staff must submit a notice to Scott County identifying the property for which the assessment is being deferred by November 30, 2015. FINANCIAL Special assessments, in addition to the annual debt service tax levy, are the fund- 3 IMPACT: ing sources for the repayment of General Obligation Bonds, Series 2015A, that were issued to finance the Mushtown Road, Maple Lane, Panama Avenue im- provement project (#TRN14-000001). Granting a deferral for paying a special assessment delays the receipt of funds to make the annual debt payments. Consequently, the annual debt service tax levy must be increased to make up for this deferral. Upon the termination of deferral, all amounts accumulated plus applicable interest becomes due and payable and, thus, available to pay any remaining debt service. If there is no remaining debt service, the Council would have authorized the closure of the fund and the transfer of any residual account balances; thus, the payment of the deferred assessments would be recorded in the new fund as previously authorized by the Council. ALTERNATIVES: The following alternatives are available to the City Council: 1. Motion and second as part of the consent agenda to adopt a Resolution Ap- proving the Deferral of Special Assessments for Arlis Farmer. 2. Table this item for a specific reason. RECOMMENDED MOTION: Alternative 1. 4646 Dakota Street SE Prior Lake, MN 55372 RESOLUTION 15-xxx RESOLUTION AUTHORIZING THE DEFERRAL OF SPECIAL ASSESSMENTS FOR ARLIS FARMER Motion By: Second By: WHEREAS, City of Prior Lake Code 111.100 provides for a deferral of special assessments on homestead property owned by a person who qualifies under one of the hardship criteria set forth in subsections 111.200 or 111.300; and WHEREAS, Property owned by Arlis Farmer has been specially benefitted by the Mushtown Road, Maple Lane, Panama Avenue improvements (project #TRN14-000001); WHEREAS, The property identified as PID# 25-420-013-0 has accordingly been assessed in the amount of $12,173.61 (Resolution #15-171); and WHEREAS, City Staff has reviewed the application and finds that it meets the criteria set forth in City Code 111.200 or 111.300; and WHEREAS, City of Prior Lake Code 111.400 provides for the termination of deferral. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. The special assessments, including the accrued interest, will be deferred until the occurrence of any one of the events provided for in City Code 111.400. 3. The City Manager is directed to administer the deferment in accordance with State Statute and City Code. PASSED AND ADOPTED THIS 23rd DAY OF NOVEMBER, 2015. VOTE Hedberg Keeney McGuire Morton Thompson Aye ☐ ☐ ☐ ☐ ☐ Nay ☐ ☐ ☐ ☐ ☐ Absent ☐ ☐ ☐ ☐ ☐ Abstain ☐ ☐ ☐ ☐ ☐ ______________________________ Frank Boyles, City Manager