APPENDIX VI.

RESOLUTION NO. 1200

A RESOLUTION ESTABLISHING A POLICY FOR

FINANCING PUBLIC IMPROVEMENTS

WHEREAS, Title 7 of the Cottage Grove Municipal Code provides for the creation of local improvement districts and the related financing of improvements, and

WHEREAS, the City Council desires to establish a policy for the public financing of local improvements,

NOW, THEREFORE, it is hereby resolved that the policy set forth in Exhibit A is adopted as the public financing policy related to implementation of Title 7 of the Municipal Code.

PASSED BY THE CITY COUNCIL AND APPROVED BY THE MAYOR THIS 26TH DAY OF APRIL, 1993.

ATTEST:		APPROVED:
Joan Hoehn - City Recorder		Jean Sinclair - Mayor

Exhibit A

CITY OF COTTAGE GROVE PUBLIC FINANCING POLICY

1. Purpose.

A.    To assist property owners/developers to fund local improvements with the use of loans from the City.

B.    To set out the conditions whereby the City will initiate the process to form a local improvement district (LID) for projects needing City financing.

2. Staff Responsibilities.

A.    To administer this policy in conjunction with the improvement district ordinance of the City.

B.    To review improvement project requests for public financing.

C.    To assure the City does not exceed the legal debt margin of 3% of the true cash value within the City boundaries.

D.    To make recommendations to the City Council on improvement project funding requests.

3. General Requirements.

A.    The property abutting the improvements must be located within the city limits of Cottage Grove, or the property owner must sign an agreement not to remonstrate against annexation of the property.

B.    The value of the property after the improvements are complete must be at least twice the value of the estimated improvements to be made.

C.    The property abutting the improvements must comply with all provisions of the Cottage Grove Municipal Code and fee schedules, including but not limited to planning, zoning, building, and utility services.

4. Standards.

A.    Applicants must hold title to the property; the property may be encumbered by a mortgage, trust deed, or in some cases, a land sales contract.

B.    Applicants purchasing property under a land sales contract must obtain written consent from the holder of the land sales contract to borrow. The contract or memorandum of said contract shall be a legally binding recorded instrument. The seller in the contract shall hold fee simple title to the property and shall be unable to use the property for other collateral purposes or to convey the property in any other way without 100% pay off of the public loan.

C.    All liens on the property including prior mortgages, property taxes, and assessments must be current at the time of application.

5. Sources of City Financing.

A.    The Special Assessment Fund, reserve funds, and any other uncommitted resources may be used as loan funds at the discretion of the City. These sources will be analyzed annually to determine total available funds for improvement projects.

B.    When an improvement project exceeds City resources, the City will solicit financing through the local banking institutions. Each institution will be asked to respond with an interest rate for a 2- and 10-year period on a loan to fund the proposed project.

C.    If the banking institutions do not submit bids on the amount requested, the City may consider limited tax obligation bonds or "special assessment bonds". The issue will be discussed with the appropriate agencies on the feasibility of such an endeavor. The City may elect to consider or reject the use of these financing mechanisms at its sole discretion.

6. Recommendation.

A.    Approval of an improvement project shall be based upon the property meeting all of the "General Requirements" and "Standards".

B.    Approval of an improvement project shall be based upon 1) the City being able to finance the project through one of the means listed in "Sources of City Financing", 2) the legal debt margin not being exceeded, and 3) the loaning of funds for the improvement project not otherwise risking the financial status of the City or its customary activities.