8.1 SR 07-17-2023 - Laserfiche WebLink

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Agenda Item 8.1 - Rolling Hills Sewer Extension Assessment & Project Approvals Regarding the rate and term of the payment for the assessment, Rolling Hills is requesting two changes to the terms of the payment for the assessment. ■ Extend the term to 20 years. ■ Reduce the interest rate to 3.8% on the first $30K of the assessment and 0% on the remainder (- $14K). Can be accomplished by waiving the 1.5% administrative fee. 1) The Rolling Hills residents continue to be responsible for $1.23M of the project costs. • Total assessment accounts for -10% of the current assessed values of the homes. + A 10-year term at 5.3% will increase each resident's monthly house payment -25%. The requested term and rate will reduce this impact -50%. ■ Most recent home sales in Rolling Hills suggest properties are delayed in selling, and those that have sold are going for - $50K below assessed value. ■ See Tables for financial impact comparison Estimated Monthly Payments Rate 10-Yr Term 15-Yr Term 20-Yr Term 3.8% (first $30K, then 0%) $419/mo $299/mo $239/mo 3.8% full assessment $442/mo $321/mo $262/mo 5.3% full assessment [ $474/mo $355/mo $298/mo Total Cost of Repayment Rate 10-Yr Term 15-Yr Term 20-Yr Term 3.8% (first $30K, then 0%) $50,100 $53,400 $56,900 3.8% full assessment $53,000 $57,800 $62,900 5.3% full assessment $56,800 $63,900 $71,500 2) Windsor Park was approved for a 15-year term for an assessment of $22K per property. 3) The CC had previously pledged support in the working session on October 18, 2021 to a longer, 30-year term and also a lower rate for the Rolling Hills project. 4) The interest rate has significantly increased (--1.3 percentage points) since discussed at the City Council work session on October 18, 2021. 5) Recognizing assessments should be reasonable, the City of Elk River Policy for Payment & Assessment of the Costs to Repair Private Utility Lines limits an assessment to $40K. The policy notes special circumstances may be considered and approved on a case -by -case condition. As the Rolling Hills assessment will exceed the $40K maximum, it is our position that this meets the condition for consideration and approval for amendment to the standard terms of the policy.