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HomeMy WebLinkAbout5G Special Assessment Deferral Requests Report 4646 Dakota Street SE Prior Lake, MN 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: NOVEMBER 20, 2017 AGENDA #: 5G PREPARED BY: JANET RINGBERG, ACCOUNTING SPECIALIST PRESENTED BY: CATHY ERICKSON, FINANCE DIRECTOR AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING THE DEFERRAL OF SPECIAL ASSESSMENTS FOR VERONICA PEARSON DISCUSSION: Introduction The purpose of this agenda item is to consider the requests by property owners in the Balsam Street, Cates Street, Franklin Trail, Rolling Oaks, Sycamore Trail, and the 2017 Overlay improvement areas 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 dol- lars ($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 2017 Overlay Project on September 18, 2017, Rolling Oaks was adopted on October 2, 2017 and the Balsam Street, Cates Street, Franklin Trail, Sycamore Trail improvement projects were adopted on October 16, 2017 so property owners had until October 16, 2017, November 2, 2017, or November 16, 2017, respectively, 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 Description 17-001 Veronica Pearson 4123 CJ Circle 252010060 Lot 2, Block 2, Lakeside Estates 2nd Addition City Code 111.200 provides the criteria that must be met in order to meet the hard- ship determination. Veronica Pearson 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: Veronica Pearson 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 Veronica Pearson no later than Sep- tember 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, 2017. FINANCIAL IMPACT: Special assessments, in addition to the annual debt service tax levy, are the fund- ing sources for the repayment of General Obligation Bonds Series 2017A, that 3 were issued in part, to finance the Cates Street improvement project, for which Ms. Pearson is a part of. 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 to adopt a Resolution Approving the Deferral of Special As- sessments for Veronica Pearson as part of the consent agenda. 2. Motion and second to remove this item from the consent agenda for additional discussion. RECOMMENDED MOTION: Alternative 1. 4646 Dakota Street SE Prior Lake, MN 55372 RESOLUTION 17-___ RESOLUTION AUTHORIZING THE DEFERRAL OF SPECIAL ASSESSMENTS FOR VERONICA PEARSON 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 Veronica Pearson has been specially benefitted by the Cates Street improvement (project #TRN17-000002); and, WHEREAS, The property identified as 4123 CJ Circle SE, PID# 252010060 has accordingly been assessed in the amount of $4,754.36 (Resolution #17-172); 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 for Veronica Pearson, 4123 CJ Circle SE, PID #252010060 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 which provides for full recovery of principle and interest at such time as the deferral is terminated. PASSED AND ADOPTED THIS 20th DAY OF NOVEMBER 2017 VOTE Briggs McGuire Thompson Braid Burkart Aye ☐ ☐ ☐ ☐ ☐ Nay ☐ ☐ ☐ ☐ ☐ Absent ☐ ☐ ☐ ☐ ☐ Abstain ☐ ☐ ☐ ☐ ☐ ______________________________ Frank Boyles, City Manager