HomeMy WebLinkAbout20101018 - VIII-A-1To: Mayor Hicks and City Councilmembers
From: Tom Montgomery
Date: October 14, 2010
Re: Bauer Property Green Acre Assessments
Council Action Requested: Council is requested to take two separate actions:
1. Remove past assessments against floodplain areas of the Bauer property.
2. Accept payment this year of the remainder of the Green Acre deferred
assessments against the Bauer property through the term of the project
bonds in exchange for waiving the accrued interest past the term of the
project bonds.
Background Information: The Bauer property on the north side of CR 47 just
east of Pleasant Drive (see location drawings) consists of three parcels that are
currently farmed. Roughly, the northern third of these parcels are in the
Vermillion River floodplain.
The property was assessed in 1967 for area benefit from the Interceptor
Sewer main, and again in 1970 for area benefit for sanitary sewer and watermain
extensions that ended 70 feet into the easterly most parcel. These area
assessments were adopted by the City Council despite the Bauer's objections at
the assessment hearings that area benefit assessments for utilities should not be
levied against undevelopable floodplain property. Recent discussions about
possible CR 47 future trail alignments awakened the old disagreement about the
floodplain property assessments. Existing floodplain and shorelands ordinances
would prohibit development in the floodplain, as would the Vermillion River
Watershed rules. With development in the floodplain prohibited, the floodplain
property cannot benefit from water and sanitary sewer extensions.
The original disagreement over assessments against floodplain property
contributed to the Bauer's decision to defer payment on the assessments through
the Green Acre deferral process. Agricultural property is allowed to defer
payments on assessments indefinitely, until the property is developed. However,
the interest on the assessments continues to accrue. Willie Bauer has proposed
to pay off the original assessment principal and interest on the non - floodplain
property this year in exchange for release of the deferred interest charges that
accrued after the original life of the project bonds.
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Financial Impact: Removing the assessments against the floodplain property
will lower deferred assessment total by about $22,000. Waiving the interest
accrued after the life of the project bonds expired will reduce the Green Acre
deferral total by $ 37,615.78.
Advisory Committee Discussion: The Operations Committee met on October
6th and unanimously recommended removing the assessments against the
Bauer floodplain property, noting that the land could not be developed and could
not benefit from the assessments.
The Operations Committee voted 2 -1 to recommend accepting the Bauer
proposal to pay off the remaining $42,000 of principal and interest from Green
Acre assessments during the term of the project bonds in exchange for the City
waiving the $37,600 of interest accrued past the term of the original project
bonds. The Committee acknowledged Mr. Bauer's misunderstanding of the
Green Acre process and his desire to leave the property in agricultural use, and
noted that the original project bonds had been paid off several years ago.
Finance Director Stark replying to a Committee question noted that the City has
previously forgiven Green Acre accrued interest and that there are only a small
number of properties with Green Acre deferred assessments in the City and she
is not overly concerned that forgiving accrued interest in this case will create a
problem with the few remaining Green Acre properties.
Attachments:
• Location drawing of the Bauer property
• Delineation drawing of the floodplain area
• Green Acre assessment deferral worksheet
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