11-24-1986 CC MIN - Laserfiche WebLink

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Page 4 City Council Minutes November 24, 1986 e Discussion was carried on regarding donations made by the Utilities to the City, such as street lighting, lighting of ball parks, Christmas decorations, etc. Further discussion was carried on regarding the title used for the transfer of funds (Payment in Lieu of Taxes) and setting up a standard to be used in calculating the dollar amount to be paid. Bill Birrenkott discussed, how the payment was determined in the various States he has worked. He noted that in South Dakota they use 1-1/4% percent, of the depreciated capitalized tax property and that he has found .75% percent used in Minnesota. Mr. Birrenkott stated that the value of the Municapal Utilities is approximately 2.5 million before depreciation, and 1.5 million after depreciation. he stated that since it is nearly impossible for utilities of this nature to determine exactly how many feet of line they have, how many poles and how many guide wires they had, they use a federally dictated chart of accounts to determine values. He further stated that he has calculated that they would pay approximately $12,000 to $14,000 in taxes, if they were a private enterprise, noting that he did not used the assessed valuation. Mr. Birrenkott also noted that if the water towers are on the City's books, they will have to be capitalized, and that it must be recorded as an assit on capitalized property. e Mr. Bill Birrenkott stated that he felt it is very important that consideration be given 'to the Water Department service area, especially the old core City, when new development is proposed, so that problem areas can be taken care of whenever possible. It was the consensus that another meeting between the Utilities and City Council would be set up, possibly mid to late January, to discuss the bond payments and increase in payments in Lieu of Taxes plus other relevant issues. 4.5 1984 Bond Repayment Ms. Lori Johnson stated that this $58,000 project consisted of a 16 inch water main crossing under Highway 169 from the new shopping center site to Dodge Avenue. Mrs. Johnson further stated that there is a $26,000 deficit between the project cost and the amount assessed out. She noted that in researching the project she found reference to a $54,000 commitment by the Utilities. She also noted that there were two assessments levied against the developer totaling $32,000. Ms. Johnson stated that although the books show $54,000, $26,241 is the balance that was supposed to be picked up by the Utilities (sewer & water). Mayor Hinkle stated that he could not recall what was agreed to, but that he does remember that Barthel signed a waiver for a public hearing on the assessment. e Commissioner Duitsman felt that he did not recall that the Utilities were involved in any commitment to finance the project.