HomeMy WebLinkAboutPolicy Payment Interest of Advances r- ..
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APCD BY CITY COUNCIL INTEROFFICE MEMORANDUM, .,
CITY OF PALM DESERT`,. - r
C!erk's Office
TO: Honorable Mayor and City Council
FROM: Kirby Warner, General Services Director
SUBJECT: POLICY REGARDING PAYMENT OF INTEREST ON CERTAIN TYPES
OF ADVANCES
DATE: January 2, 1986 l�
(J : 1
RECOMMENDATION :
Staff recommends that the City Council :
1 . Adopt a policy of paying interest on advances made for
assessment districts and/or projects requiring seed money to
initiate the proceedings . Such payment to occur upon the
successful formation and bonding of the assessment district or
execution of a repayment agreement in the case of projects not
completed by the use of an assessment district . The rate of
interest will be the average yield on total City investments
during the period of the advance.
2 . Authorize the payment of interest to those individuals
and the City for monies advanced for the formation of Assessment
District No. 84- 1 .
DISCUSSION:
As you may recall during the beginning phases of AD 84-- 1 certain
property owners and the City advanced funds to pay for
professional services needed to form the district . It was
understood that these deposits would be returned when and if the
district was formally established. However, no specific agreement
was made as to the payment of interest.
Staff asked Warren Diven ,bond counsel for AD 84- 1 , to comment on
the situation and he has indicated that there is no specific
reference contained in the Government Code relating to district
formation . Staff believes that when an ultimately definable
segment of property owners benefit by the completion of a district
or project they should required to fund interest repayment to
those parties willing to risk up front monies to make the project
happen . In these cases there is no guarantee that any funds will
be returned if the district is not completed for any reason.
The policy staff is recommending would apply to private individual
and City advances alike.