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k <br />4188.7 <br />#,0' 02 <br />e-7 <br />t. j. <br />TO: Mayor anti C P y Council <br />FROM: Mark Bernhardson, ':ity AdministratorVk r,Pn 1119'_� <br />DATE: April 1, 198B i',Alr OF got)" <br />SUBJECT: Refund of Monies to Schlee Builders <br />Attacbr,Ant A. Briggs and Morgan Letter Dated 3/28/88 <br />(Without Attachments) <br />B. Schlee Builders Letter Dated 9/9/87 <br />(Without Attachments) <br />C. Briggs and Morgan Letter Dated 9/29/87 <br />(Attachment 5 Only) <br />D. City of Orono Letter Dated 5/13/87 <br />ISSUE - D•?termination as to whether the Council wants to provide <br />A�refund of o-erpayments to the Bank, which was -11lected under a <br />-L.,:cter of Credit by the City. <br />INTRODUCTION - In 1982 the Bayshire Townh^roes, west of Blaine <br />Avenue, were undertaken as the first "multiple" development in <br />the City whic`• were duplexes on the old Navr--re 'treater site. <br />,!-he developer freed to a spec;.il assessment project backed with <br />a letter of credit. These were to be paid oft over a fi.ve year <br />period. Several of the lots were sold. On the ones that were <br />not sold however, the developer di-1 not pay taxes on several of <br />them i n 184 and most of the ones that were not sold i n 185. When <br />the staff -ealied 11^se payments were not being made in a t ely <br />manner the c;ty was C. to collect on a letter of credit on the <br />principal e I A half of '85 3nd thr- balance through '88. <br />Because ! --th_. of calculat.on fur drawi. the letter of <br />credit to a'.th the fact tha the City was unaware of a pre- <br />payment 0^r parcel the City collected a::�out $ 10,000 more <br />than it wou Ia ve been entitled to in the 1 -tter of credit. At <br />this time the parcels have gone tax forfeit and are in a <br />redemption period. The City has bee- working with the Attorr„�ys <br />for the bank (letter of credit issur to resol the matter. <br />DISCUSSION - After several `-alse stnrts the City as been anle to <br />determine a settlement in rei.ationship <br />to the app- oriate dollars <br />still owed on the properties together with the .,ears by which <br />they should he undertaken accountn, for <br />the overpay ent that the <br />City collected under the letter of credit. The City -moved from <br />the special asseoFments the amount: t <br />- it were collected on the <br />latter of credit and when the propc <br />.ores between the bank <br />and the prospective owner, the spec' <br />_ will he appropriately <br />paid off. (These may he paid in ak' <br />of the closing to avoid <br />the foreclosure.) The City will. re, <br />..e the monies from the '94 <br />an-1 195 specials together with the <br />appropriate pen: -!ties and <br />penalty interest nhoul.i these he <br />paid in May it its tax <br />settlement. The City shoul(i pay back <br />to the bank the appropriate <br />amount it overcol.ected at they time that <br />the specials are paid to <br />