Memo Doug Dahlberg Appearance At City Council Meeting �_ S �
� CITY OF HOPKINS
MEMORANDUM
DATE: December 16, 1994
TO: The Honorable Mayor and City Council
FROM: Tom Harmehi , Community Development Director
SUBJECT: Doug Dahlberg - Appearance at City Council Meeting
The purpose of this memo is to inform the Council of Doug Dahlberg's intention of appearing
before the City Council meeting on December 20th. It is expected that Mr. Dahlberg will voice
his concerns regarding an issue during the open forum session at the beginning of the meeting.
Mr. Dahiberg's concerns relate to an assessment hookup fee associated with his home's
connection to the City's sewer system. As you may or may not be aware of, Mr. Dahlberg's
home, which is located at 425 Madison Ave. N., recently was connected to the City's sanitary
� sewer system. This sanitary sewer had originally been installed in Monroe Ave. in 1959, with
special assessments levied in 1960 to property owners who had hooked up to the system. The
original assessment paid by the homeowners in the area, which did not include the Dahlberg
property, was $637. This assessment was levied over time at 6% interest.
Pursuant to Section 705 of the City Code (see attached), when a property hooks up to the City's
sewer system, they are required to pay to the City the amount of the original assessment
associated with the improvement (in this case $637) plus interest at the rate of 7% for each year
that the home was not hooked up to the system. In this particular case, Mr. Dahlberg's home was
not hooked up to the City's sewer system for 34 years. As a result, when Mr. Dahlberg hooked
up to the City's sewer system, he was required to pay the City $637 plus 7% interest, calculated as
simple interest, for 34 years. This resulted in interest charges of $1,516.06. When adding this to
the $637 original assessment, Mr. Dahlberg's current assessment associated with hooking up to
the system amounts to $2,153.06.
Mr. Dahlberg is objecting to the interest charge associated with the assessment, and apparently
will be requesting that he not be required to pay this, or that the code be modified.
Please note that similar situations have occurred in the past with other properties. In these cases,
the City followed the City Code requirement and added interest on to the original assessments
which were levied. Attached is a memo from Robin Robertson, Special Assessment Clerk, which
provides several examples of similar situations where the property owners were required to pay
� interest in addition to the original assessment.
� On a related manner, upon checking with Jerre Miller, City Attorney, it was lus opinion that the
City should not use the 7% interest rate as noted in the City Code. Rather the City should use 6%
as a figure based on the fact that this was the original assessment rate used when the assessments
were levied against the properties back in 1960. When using the 6% rate, Mr. Dahlberg's
assessment would be $1,936.48.
As a point of information, there are reasons for which the City has the code requirement which is
currently being questioned. Using the current case as an example, the City installed the sewer and
experienced expense to do it for which it was reimbursed by the homeowners through
assessments. However, because Dahlberg's home was not hooked up, the City was not fully
reimbursed for the cost it experienced. Thus, the reason for requiring the payment of the principal
amount of $637. The interest rate charge is also attached to cover carrying charges which the
City experienced for the last 34 years.
Again, the purpose of tlus memo is to advise you of a potential appearance by Mr. Dahlberg at
your upcoming meeting. Assuming this appearance takes place, staff would await direction from
the City Council.
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