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MINUTES OF THE ORONO CITY COUNCIL MEETING Monday, April 25, 2011 7:00 o'clock p.m. _____________________________________________________________________________________ Page 20 of 25 (11. APPEAL OF ASSESSMENT FOR UNPAID BLLS - CREEKSIDE IN ORONO, Continued) Johnson reiterated that he does not feel they should be responsible to pay those costs. It was an entity that went bankrupt and that the City has ways to handle old debts. Johnson indicated he is agreeable to paying the current costs and requested that the charges be split out. In approximately the first part of December, Johnson indicated he spoke to Mike and requested an invoice. The total charges were approximately $10,000. The City agreed to reduce it by approximately $1,000. There are approximately $5,600 in old costs that they do not feel they should have to pay. Bremer asked how many lots they still own. Johnson indicated they owned five lots at the point they did the development but have since sold one of those lots. Rahn asked if there is a breakdown between what they are conceding to and what has been assessed. Gaffron noted Exhibit G shows the original combined billing statement was a little over $10,000. The City reduced it by approximately $1,000 after the subdivision improvements were considered completed. That reduced the bill down to approximately $9,200. The subdivision was $8,800, which was split between seven homes. Under the developer’s agreement, each of the property owners has inherited the obligations of the developer. Staff divided the $8,800 by seven so each of the lots ended up with approximately a $1,400 bill by the time the extra fees and interest are included. Gaffron reiterated that the City expects developers to pay for developments and that the rest of the taxpayers should not pay for the cost of this development. The Council in the past has not given Staff any direction that taxpayers should pay for the costs of development. The letter of credit was clearly for a different purpose other than collecting on the bills for engineering or consulting services that the City incurred and is a separate line item in the development agreement. At the time this development was approved, the City was not requiring escrows. From Staff’s perspective, the Council should not approve any waiver. Johnson stated it would be $5,300 rather than $8,800. Johnson displayed on the overhead the costs that they were assessed. Johnson indicated they had nothing to do with those costs prior to 2008. They purchased the property and closed with the bank. Then they found out there were old costs that were not part of the title. Johnson commented he is not a developer but it strikes him that this is not the way it should be done. Johnson indicated he is willing to pay the costs that have been incurred since they purchased the property. Since the purchase they have been paying all of their current bills. Johnson noted they had approximately $7,000 in escrow and have since gotten all of that back. Johnson reiterated he does not want to pay for the old costs and that in his opinion the Council would take the same position if they were in this situation. Mattick stated the City's old development agreements used to require a letter of credit for all the improvements within the subdivision and then the City would bill for any engineering and legal fees that were incurred. There is a provision in the statutes that allows cities to asses a benefitted property for any professional services that have been rendered to that property as part of an application. Item #02 - CC Agenda - 05/09/2011 Approval of Council Minutes 04/25/2011 [Page 20 of 25]