HomeMy WebLinkAbout20200107 - Finance Committee ReCap
Finance Committee Meeting Recap
January 7, 2020
5:30 pm
City Hall Volunteer Room
Present:
Councilmembers Tina Folch, Lori Braucks, and Mark Vaughan; City Administrator Dan Wietecha; Finance
Manager Melanie Lammers; and Economic Development Coordinator Rusty Fifield.
Chair Folch called the meeting to order at 5:30 pm.
Conzemius Dairy Farm:
Ms. Lammers said that Conzemius Dairy Farm has requested a reduction in the accrued interest on its Green
Acres property similar to the calculation a couple of years ago.
She gave a brief overview of the Green Acres program. It is a tax deferral program for agricultural properties
that meet certain criteria. As part of the program, special assessments can also be deferred while the property
qualifies for Green Acres. The special assessments may be deferred for an indefinite period of time; however,
the interest continues to accrue. There are three properties with Green Acres deferred assessments.
Special assessments have been deferred on this property for many years: sanitary sewer in 1969, water in
1972, road in 1982, storm sewer in 1982 and 1983, and street and utilities in 1999. In this case, the age of the
property in the Green Acres program has resulted in significant interest accrual. Interest rates were higher
when the deferrals started and were set at 9.75% in 1984, much higher than today’s rates. And the length of
time has meant many years of interest accruing. The principal of the special assessments is $206,131.36, and
accrued interest is an additional $511,068.36.
A couple of years ago, the City Council considered the deferred assessment on a neighboring Green Acres
property. At that time, the City Council approved a reduced interest charge to be consistent with the interest
rates that were charged on other special assessments in the city during these many years. Using the same
interest rates for the Conzemius Dairy Farm would reduce the accrued interest calculation to $389,601.73.
Since loans or bonds associated with the original infrastructure projects have been long paid off, the payment
would be a reimbursement to the City.
The Committee discussed the Conzemius Dairy Farm’s knowledge of the deferred assessment and accruing
interest. Entering the property in the Green Acres program had been done by the Conzemius parents, and
now inherited by the next generation. It appears that Green Acres status was flagged during some inquiries
around 2015. There is also an invisible nature to the program, since the deferred assessments are not listed on
an annual property tax notice.
The Committee noted that clearing the Green Acres status will help open the property to development.
Councilmember Vaughan made a motion, seconded by Councilmember Braucks, to recommend to the City
Council to accept the calculation for a reduced interest rate resulting in $389,601.73 in interest plus
$206,131.36 in principal. Motion approved unanimously.
Councilmember Vaughan made a motion, seconded by Councilmember Folch, to adjourn the meeting.
Motion approved unanimously at 5:58 pm.