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. ~ tit 2006 PMP 9/7/2006 Page 5 7) Written comment: 1465 Skiles Lane, Wayne Henquinet Mr. Henquinet submitted a written objection regarding the timing of the assessment. He feels that the property owners should not be assessed until the completion of the project. Per the assessment policy, the assessment roll is typically adopted prior to the beginning of construction. However, with the high bids raising the lluestion of whether the project would even proceed, the assessment hearing was delayed to allow staff to investigate possihle savings in the project to reduce the overall cost. Mr. Henquinet also exprcsscd a concern regarding the proposed interest rate on the assessment. Hc fcels that the proposed rate of prime plus two percent is high and is not a fair rate. The assessment policy states that the interest rate used for the assessment shall be designated at the prime rate plus two percent. However, the assessment policy also states that Council may deviate from the policy as it deems proper. The Council must discuss and set this rate at the adoption of the assessment roll. FINANCIAL IMPLICATIONS The assessment policy states that the interest rate shall be designated at the prime rate plus two (2) percent. The prime rate currently is 8.25%, which would mean a 10.25% interest rate for the assessment. Some residents have expressed concern that this rate appears rather high. Staff researched that a lO-year home equity loan can be obtained at a rate of7%, and would suggest that Council consider a 9% interest rate for the assessments. The additional two (2) percent would cover administrative costs. Council must set the interest rate when the assessment roll is adopted. Schedule: The following is a proposed schedule for 2006 assessments: September II Council adopts assessment roll Sept. 12 to Oct. II Assessment pre-payment period at Arden Hills City Hall (30 days) Oct. l2 to Oct. 30 Tally of final assessment roll October 31 Certification of final assessment roll to Ramsey County RECOMMENDED COUNCIL ACTION It is recommended that the Council approvc the attached resolution which adopts the assessment roll for the 2006 PMP improvements.