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1 I I Council Meeting Minutes July 8, 1986 Council Business, continued Proper stated the Seminary Estates project is somewhat unique because of the number of existing homes in the area which could be sold and occupied this Fall, so the Seminary needs to have the curb and blacktop in this Fall. Discussed normal procedure for construction of streets and new subdivisions. The Seminary is proposing to put money into escrow for a five-year period to draw from to make repairs from trench settlements. Regarding street settling, Benke asked Proper if the five-year/ $15,000 policy would be adequate; Proper stated it would be adequate based on the worst case scenario. Benke asked if we would put down a first base course of asphalt, with the second phase next year; Proper stated that was the plan but that the problem might be with long-term impacts. LeFevere stated there were three proposed changes in the agree- ments: (1) the special assessment would be levied on the basis of the bids received [or estimated total cost] rather than total cost; (2) one year construction schedule; and (3) if the actual costs of the project come in below the projected cost that the assessment would be reduced accordingly so that the assessed cost would be the same as the actual project costs. Regarding Change 1, LeFevere stated the purpose is to protect the city from incurring costs of the improvements due to a successful special assessment appeal, otherwise there would be no need for this agreement at all. We want to protect the city from that appeal brought not only by United Theological Seminary but by Pratt Homes as well as subsequent purchasers. The original agree- ment also required the Seminary to prepay the assessments at time of sale so there would be no need to worry about the validity of assessments or a successful challenge of the special assessments by any subsequent purchaser. For financing, marketing, and other reasons, both the Seminary and Pratt Homes would prefer to be "off the hook" earlier than the original proposal (assessments levied in 1987). Some provision is needed to be made for the assessment process being moved up and that the city levy special assessments on the projected costs and estimated costs. A levy based on bids is not the typical policy of the city, but it is not illegal; the city could levy special assessments based on an engineering estimate. There may be some additional administrative burden on staff. Risk is if actual costs are higher, there would have to be a supplemental assessment. That part is not a change, except that if the city waits until all of the project costs are in, everyone will know that the city is waiting. The new property owners may not be happy to find there will be a supplemental assessment. As to the actual risk to the city, assuming the original assessment plus the supplemental assessment does not exceed the benefit, the city would collect the money and they would not incur any expenses from the general fund. Page Nine Seminary Estates: Revised Assessment and Escrow Agree- ments for Streets and Utilities Project Report 86-158