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~ity of <br /> <br />iver <br /> <br />MEMORANDUM <br /> <br />Item # 5.7. <br /> <br />TO: <br /> <br />FROM: <br /> <br />DATE: <br /> <br />SUBJECT: <br /> <br />Mayor & City Council <br /> <br />Pat Klaers, City Administrator <br /> <br />April 21, 1997 <br /> <br />Derrick Investments <br /> <br />Mr. Roger Derrick came before the City Council on April 7, 1997, to request <br />that the City Council deviate from its policy of requiring financial security <br />from developers before they work on projects. The city requires a Letter of <br />Credit, cash, escrow, or a Disbursement Agreement as financial security for <br />development projects. This financial security is necessary to protect the city <br />against the "worse case" scenario whereby part of a project is started and the <br />developer "disappears" for whatever reason (the developer dies, gets sued, <br />goes bankrupt, etc.). <br /> <br />Mr. Derrick indicated that he has a contractor available to do work, however <br />he does not have the bank financing in place until mid May for Phase II of <br />the project. Making the situation somewhat more complex was the city's <br />request to install the Highland Avenue water line through this plat and to <br />have Mr. Derrick provide cover through the grading plan in Phase III for this <br />water line project. (It should be noted that Mr. Derrick will also be assessed <br />lateral benefit for this water line and, conversely, will be given water trunk <br />credit for the line as it goes through Phase I.) <br /> <br />This city water line issue makes the situation somewhat unique and <br />accordingly we can see some mutual benefit to allowing the grading work to <br />take place as we are "partners" for this part of the project. For this work, the <br />city will hold onto the Disbursement Agreement funds and not release monies <br />as work is completed. Allowing the grading to move forward is contingent <br />upon the plat being recorded which still has not happened and the grading <br />plan being formally approved by the city. The Council should note that we <br />are not partners with the developer as it relates to the installation of sewer <br />and water, and the city cannot recommend any of the utility work taking <br />place in Phase II without additional security being placed with the city. Staff <br />does not know of other forms of security that would be acceptable other than <br />the financing tools noted above. <br /> <br />13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425 <br /> <br /> <br />