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<br />Minn. Stat. ~ 475.55 <br /> <br />This same 1987 law also removed all limits on the interest cities may <br />pay on bonds and other obligations. The law now specifies that <br />"interest on obligations issued after April 1, 1986, is not subject to <br />any limitation on rate or amount." <br /> <br />In effect, the market, rather than a statutory limit, determines the <br />interest rate cities will pay on bonds. However, cities are free to set <br />the interest rate on special assessments at whatever rate the council <br />deems ajJpropriate. The Legislature was obviously comfortable that <br />city councils would act reasonably and responsibly in setting interest <br />rates, and decided that no statutory restrictions would be needed. It <br />seems equally clear that if the Legislature were to perceive that cities <br />are abusing this discretion, it would not hesitate to reinstate limits. <br /> <br />In setting interest rates on assessments, the council should make sure <br />there is a reasonable relationship between the assessment interest rate <br />and the bond interest rate if the city issued bonds to finance the ' <br />project. If the city finances the project with funds on hand without <br />using bonds, the council will want to look at the interest rate the city . <br />would otherwise have earned on the funds. In either cas~; the council ; <br />may reasoiiablyset the assessment interest rate somewhat higher in <br />order to offset the additional bookkeeping and other costs involved in <br />carrying the assessments.:However, if the spread between the interest <br />cost to the city and the assessment interest rate becomes too great, <br />the Legislature may be convinced assessment interest rates need to <br />once again be regulated by statute. <br /> <br />I. Use of special assessments to collect current <br />service charges <br /> <br />Minn. Stat. ~ 429.101 <br /> <br />The code also authorizes the council to provide for the collection of <br />certain enumerated special charges as a special assessment against <br />the property benefited. Special charges that may be assessed include <br />those for: <br /> <br />Minn. Stat ~ 429.101, subd. . <br />1(0) <br /> <br />Snow, ice, or rubbish removal from sidewalks. <br /> <br />Minn. Stat. ~ 429.101, slibd. . <br />l(b) <br /> <br />Weed elimination from streets and private property. <br /> <br />Minn. Stat ~ 429.101, subd. . <br />l(c) <br /> <br />Removal or elimination of public health or safety hazards <br />from private property, except hazardous buildings as defined <br />by Minn. Stat. SS 463.15 to 463.26. <br /> <br />Local Improvement Guide <br /> <br />25 <br />