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The Elk River Vision <br />A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community <br />engagement that encourages and inspires prosperity <br /> <br /> <br />Request for Action <br /> <br />To <br />City Council <br />Item Number <br />8.3 <br /> <br />Meeting Date <br />May 6, 2024 <br />Prepared By <br />Joe Stremcha, Business Services Director/Assistant <br />City Administrator <br /> <br />Item Description <br />iBackCheck Lease Payment Default <br />Reviewed by: <br />Lori Stich <br />Joe Stremcha <br />Cal Portner <br />Tina Allard <br /> <br />Action Requested <br />Approve, by motion, all iBackCheck, LLC late fees are called due effective immediately in the amount of <br />$4,327.79 <br /> <br />Approve, by motion, termination of the iBackCheck lease agreement effective May 31. <br /> <br />Background/Discussion <br />On March 4, 2024, Mr. Stremcha presented the staff report detailing tenant default and late fees owed by <br />iBackCheck. He noted the contract with iBackCheck was written for 5 years, through May 2, 2027, with an <br />option to renew for another 5 years. <br /> <br />Dr.Christi Jo Christian was present and gave the Council a public apology for the outstanding payments and <br />penalties owed to the city. She stated it was not intentional to be late with payments, it was her oversight and <br />banking errors and noted how challenging it was running a small business. <br /> <br />The Council crafted a repayment plan to give Ms. Christian an extended time to repay the $4,460.71 and add <br />that to the regular payment each month. If, at any time, the lease payment or outstanding fees are not paid on <br />time, the entire amount of the outstanding lease payments and penalties will become due. <br /> <br />Ms. Christian was agreeable to that plan. If, for some reason, Ms. Christian was unable to make timely <br />payments as outlined in the agreement, Mr. Stremcha would report back to the city council. <br /> <br />The tenant has since failed to make timely payments as detailed in the March 12, 2024, repayment schedule. <br />Additional late fees were accumulated for April and May because of failure to make the correct monthly <br />payment amount. <br /> <br />Staff recommends that all late fees be called due effective immediately for $4,329.79. Staff further <br />recommends that the lease agreement be terminated due to tenant default, as detailed in a notice sent by the <br />Page 160 of 254