City Council Minutes 06-03-1985 SpecialMINUTES
SPECIAL MEETING - MONTICELLO CITY COUNCIL
June 3, 1985 - 7:00 A.M.
A special meeting of the City Council, being duly called by the
Mayor and posted by the City Administrator, was held at 7:00 A.M.,
Monday, June 3, 1985, in the City Hall. Members present were
Mayor Grimsmo, Council members Fran Fair, Bill Fair, Dan Blonigen,
and Jack Maxwell. Members absent: None. Also present were
City Administrator Eidem, Finance Director Wolfsteller, and Dickman
Knutson, representing Meadow Oak.
The single agenda item and purpose for which the special meeting
was called was to discuss a proposal to reapportion a certain
amount of special assessments currently levied against Meadow
Oak Estates. The proposal was to remove $130,000.00 in special
assessments from Meadow Oak Estates and respread said assessments
in a proportionate way over Outlots C and D in Meadow Oak. The
Mayor called the meeting to order and asked City Administrator
Eidem to give a brief background explanation on the proposal.
Eidem explained that discussions with the developers of Ultra
Homes had been meeting with City staff for approximately 12-15
months to work out a solution for the high special assessments
currently in place against Meadow Oak Estates. He explained
that under the current system, individual lots in Meadow Oak
Estates would sell for approximately $17,000.00, while individual
lots in Outlots C and D (when replatted) would sell for slightly
over $8,000.00. Eidem explained that the intent of making the
transfer and reapportionment of assessments would be to lower
the individual lot prices in Estates to approximately $13,000.00,
while increasing the replatted individual lots in Outlots C and
D to approximately $12,500.00. The intent is to make all lots
approximately equal in cost so that they could be marketed more
effectively. With that, Eidem turned the floor over to Dickman
Knutson, representing Ultra Homes, to explain the proposed financing
and marketing tactics for the revitalized sale of Meadow Oak
building sites.
Mr. Knutson explained that he was securing financing from Midwest
Federal, personally, in order to buy out the two other partners
in Ultra Homes, and furtherito purchase Outlots C. D, G, and
H. The money used to buy out the partnership and acquire the
lots would provide enough income for Mr. Boyle to make the required
payments to the Federal Land Bank, hence postponing the bank
foreclosure sale on Mr. Boyle's property. Mr. Knutson also noted
that Midwest Federal has requested Ultra Homes to proceed with
the replat of Outlots C, D, G, and H before the end of 1985.
They are of the impression that platted lots will become more
saleable and a better protection for the financial commitment.
Council Minutes - Special Meeting - 6/3/85
Both Council members Maxwell and Blonigen expressed substantial
concern over the placing of assessments against unimproved lots.
Their concern stemmed from the fact that monies would be placed
against unimproved lands, and the developers upon sale of the
improved lots could simply walk away from the unimproved land
leaving the City holding the debt on land that is unimproved.
At that time, in order for the City to execute sales of the lots,
the City would have to further invest monies to install the public
improvements. Eidem explained that that was staff's concern
all along and was also the primary reason that it took so long
to arrive at an agreement. Eidem went on to say that it would
be absolutely essential to enter independent contracts with Ultra
Homes that provided some types of ironclad guarantees to the
City to prevent developer walk away. Eidem indicated that such
agreements had been executed with the Monticello Country Club
during their replat and that with the City Attorney involved,
he felt confident that a similar agreement could be achieved
with Ultra Homes. Mr. Knutson indicated that while those documents
were not prepared, Midwest Federal would be satisfied seeing
a motion from the Council authorizing the respreading of special
assessments, and directing the City staff and City Attorney to
prepare and execute the required documents to achieve said respreading.
Mayor Grimsmo asked if any supporting documentation had been
shown to City staff from Midwest Federal or Federal Land Bank,
etc. Staff indicated they had not. Mayor Grimsmo indicated
that any motion, in his estimation, must require that letters
be provided from the financial institution showing that the finance
plan was, in fact, how it had been presented to staff and Council.
He then indicated he was ready for a motion.
Motion by Fran Fair to grant approval to a reapportionment of
$130,000.00 in special assessments, said assessments to be proportionately
removed from the individual lots within Meadow Oak Estates and
reapportioned as lump sums against Outlots C and D, said reapportionment
to be contingent upon receipt of proper documentation from Midwest
Federal that they are financing the restructuring of Ultra Homes,
and further directing staff and City Attorney to prepare and
execute the assessment roll and binding contracts for repayment.
The motion was duly seconded by Bill Fair. Voting in favor:
Grimsmo, Fran Fair, Bill Fair. Voting in the opposition: Jack
Maxwell, Dan Blonigen. Motion carried.
There being no other business to be held under the announcement
of special meeting, the Mayor adjourned the meeting.
Th mas A. Eidem
City Administrator
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