HomeMy WebLinkAboutDelinquent Special Assessment -May 21, 1992 #TATGES, REDPATH & CO., LTD.
CERTIFIED PUBLIC ACCOUNTANTS
May 21, 1992
To the Honorable Mayor and
Members of the City Council
City of Oak Park Heights
14168 North 57th Street
Stillwater, MN 55082
RE; DELINQUENT SPECIAL ASSESSMENTS (Swager's 9th Addition)
We have updated our special analysis relating to the above delinquent assessments and are happy
to advise that this should be our last report on this topic. As you are aware, the City had been
experiencing poor assessment collection rates and high delinquencies since 1989. We are happy
to report that this situation is no longer critical to the complete and timely retirement of the
effected City bond issue.
Delinquencies on this project still existed at December 31, 1991 (i.e. 6 lots). However, such
delinquencies are no longer critical to this project nor the City's bonded debt fund for these
assessments. Actual collections over the past two years plus other actions taken by the City will
insure more than sufficient assets to meet all bonded debt requirements nd provide a reserved
balance after final payment of these bonds in 1993.
4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426 -7000 • FAX /426 -5004
To the Honorable Mayor and
Members of the City Council
City of Oak Park Heights
May 21, 1992
Page 2
The following schedule details the remaining, unpaid assessments (by parcel) at January, 1992:
Parcel/Lot Control Deferred Delinquent Current
61463 -2525
(Lot 8/Block 2) Gardner $1,839.78 $7,395.94 $2,152.54
61463 -2700
(Lot 3/Block 3) Gardner 1,839.78 0.00 2,152.54
61463 -2725
(Lot 4/Block 3) BRA 1,839.78 7,395.94 2,152.54
61463 -2750
(Lot 5/Block 3) HRA 1,839.78 7,395.94 2,152.54
61463 -2775
(Lot 6/Block 3) HRA 1,839.78 7,395.94 2,152.54
61463 -3225
(Lot 2/Block 5) Gardner 1,839.78 7,395.94 2,152.54
61463 -4100
(Lot 14Block7) Gardner 0.00 2,308.92 0.00
SUBTOTAL 11,038.68 39,288.62 12,915.24
61342 -2600
(Tract I) 4,000.00 0.00 4,680.00
60004 -3315
(Parcel 73) 254.74 0.00 298.08
TOTALS $15,293.42 $39,288.62 $17,893.32
GRAND TOTAL $72,475.00
The last two parcels/lots shown above (Tract I and Parcel 73) are non - developer parcels. The
owners of these parcels are (and always have been) current in their payment of these
assessments. The poor assessment collection rate and high delinquencies were caused solely by
the developer- controlled parcels/lots.
All of the HRA- controlled lots are 100% delinquent since 1989. The deferred balance shown
above represents the 1993 principal. These assessments total $11,388 per lot at January, 1992
and will increase to $11,545 per lot with the 1993 interest. These assessments total $34,164 at
January, 1992 (three lots @ $11,388) and will increase to $34,635 at January, 1993.
Two of the Gardner - controlled lots are also 100% delinquent since 1989. However, building
permits were issued for both of these lots during January or February, 1991. These assessments
total $22,776 at January, 1992 (two lots @ $ 11,388) and will increase to $23,090 at January,
1993.
To the Honorable Mayor and
Members of the City Council
City of Oak Park Heights
May 21, 1992
Page 3
Parcel 61463 -2700 (Lot 3/Block 3) was purchased by a City employee in 1991. At closing, all
current and delinquent assessments were paid at the County. However, the unpaid deferred
portion ($3,679.56) Au = paid to the City. This was apparently caused by an error by the Title
and/or Closing Company. Judy has been in contact with the current owner, and this parcel
should be fully paid during 1992.
Parcel 61463 -4100 (Lot 14/Block 7) was partially paid in 1991. The remaining balance of
$2,308.92 represents the 1990/91 current installment. This balance (plus penalties and interest)
was paid to Washington County during March, 1992.
The underlying developer project consisted of 88 residential/single- family lots. The special
assessments on 81 of these lots have been fully paid at December 31, 1991. An additional two
lots were partially paid in 1991. The remaining 5 lots include two lots for which building
permits have been issued and actual construction is in process. The City can reasonably expect
full payment of these assessments in 1992 and/or 1993.
The final remaining three lots are owned/controlled by the Washington County HRA. These lots
are all vacant and no building permits have been issued. Accordingly, the payment of these
special assessments is still uncertain at this time. However, even if such assessments are never
paid, sufficient assets will be received to fully meet the bonding requirements of this project. See
Middle -Case Scenario in the following section of this report.
Cash Flow Projections - Bond Issue
The Swager 9th Addition improvements were financed by the $995,000 Improvement Bonds of
1987. These bonds (in turn) are financed by the special assessments which are the topic of this
report. Our analysis and review included cash -flow projections for the full retirement of these
bonds. Our projections were made based upon three sets of assumptions as shown on the
attached schedules and summarized below:
Under the Worst -Case Scenario we have assumed that the remaining five lots (two developer
owned/controlled with outstanding building permits plus three owned/controlled by the HRA)
will never be paid.
Under the Middle -Case Scenario we have assumed that the two remaining developer
owned/controlled lots will be paid in 1992 and the three HRA owned/controlled lots will never
be paid.
Under the Best -Case Scenari o , we have assumed full payment for all lots with the two remaining
developer owned/controlled lots being paid in 1992 and the three HRA owned/controlled lots
being paid in 1993.
To the Honorable Mayor and
Members of the City Council
City of Oak Park Heights
May 21, 1992
Page 4
A comparison of the above described projections with the original bond issue estimates or budget
is as follows:
January, 1992 Projections
Original
Budget Worst -Case Middle -Case Best -Case
ASSETS PROVIDED/PROJECTED
Special assessments:
Rolls adopted $995,000 $914,829 $914,829 $914,829
Less: delinquencies 0 (45,995) (27,597) 0
Interest earnings:
On assessments 232,167 83,437 87,815 94,852
On investments 0 188,537 194,665 199,797
Delinquent P & I 0 23,489 27,187 35,781
Tax Levy 0 45,488 45,488 45,488
Bond proceeds 112,873 205,187 205,187 205,187
Net Assets Provided/Projected 1,340,040 1,414,972 1,447,574 1,495,934
BOND REQUIREMENTS
Bond principal 995,000 995,000 995,000 995,000
Bond interest 261,778 261,778 261,778 261,778
Paying agent fees 0 2,674 2,674 2,674
Total Bond Requirements 1,256,778 1,259,452 1,259,452 1,259,452
PROJECTED FINAL BALANCE -
DECEMBER 31, 1993 $83,262 $155,520 $188,122 $236,482
To the Honorable Mayor and
Members of the City Council
City of Oak Park Heights
May 21, 1992
Page 5
As clearly shown on the previous page, recent developer payments plus action by the City to
provide additional financing have helped to assure full- financing for this bond issue even under
the Worst -Case Scenario. Furthermore, under the Best -Case Scenario, the Projected Final
Balance for this fund will be approximately $236,500. This projected balanced is composed of
the following:
1. Normal Projected Balance - $83,300
59'0 of Debt Obligations
2. Debt Service Tax Levy - 1990/91 -
Certified to Insure Adequate Financing 45,500
3. Excess Bond Proceeds
Committed to Debt Service 12,100
4. Excess Interest Earnings 98,300
5. Other (2,700)
TOTAL PROJECTED BALANCE
(Best -Case Scenario) - December 31, 1993 $236,500
1991 was a pivotal year for the City's Improvement Bonds of 1987. Cash and investments on
hand at December 31, 1991 totalled $528,741. This exceeds remaining bonded debt
requirements of $431,180 (both principal and interest) by $97,561 at that date. These bondsr
= callable. Accordingly, this fund will have a mininium reserved balance of approximately
$155,500 at December 31, 1993 when these bonds will be fully paid. This minimum reserved
balance could increase substantially based upon the following:
Minimum Reserved Balance $155,520
Future Gardner Payments (1992):
1. Two lots @ $11,388 $22,776
2. Penalties and interest 3,698 26,474
Future HRA Payments (1993):
1. Three lots @ $11,545 $34,634
2. Penalties and interest 8,594 43,228
Increased Investment Yield (6% vs. 5%)
and Earnings 11,260
Potential Reserved Balance $236,482
To the Honorable Mayor and
Members of the City Council
City of Oak Park Heights
May 21, 1992
Page 6
The previous schedule clearly shows the effect of the remaining unpaid developer assessments
and BRA assessments. The City may wish to contact the developer wd the HRA to inquire as to
when the City may expect payment. The first part of this report includes parcelAot data for your
convenience.
Concurrent with the updated analysis of this situation and drafting of this report, we have
discussed the various elements with LaVonne and Judy. They (in turn) have made inquiries to
determine the current status of these delinquencies. Current information indicates that the City
may receive full payment of all delinquencies in 1992. Should this occur, the $236,000 final
projected balance will be achieved by December 31, 1993.
As stated earlier, this report should be our last detailed report to the City on this topic. The
delinquent assessment situation is no longer critical to the City's bonding ability nor bond rating.
Additionally, the remaining unpaid parcels are detailed herein and can be monitored by City
personnel.
If you have any further questions or would like to discuss the contents of this report, please don't
hesitate to call.
Yours very truly,
TAUTGES, REDPATH & CO., LTD.
iav
Robert L Voto, CPA
RJV/lad
c: LaVonne Wilson
Judy Hoist
Special Assessments File
CASzNFL O lk y S
CITY OF OAK PARK HEIGHTS
SPEC. ASSESSMENTS- SWAGER'S 9TH. ADDITION -CASH FLOW
WORST-CASE SCENARIO
5 YEAR
SPECIAL ASSESSMENTS INVEST. TOTAL BOND PAYMENTS END
YEAR P. PD. CURR. DEUNG. PEN. TOTAL OTHER INTER. REVEN. JUNE DEC. TOTAL SAL.
1987 128,240 0 0 0 128,240 120,561 6,989 255,790 24,538 24,538 231,252
1988 167,569 0 0 0 167,569 21,750 189,319 29,692 29,692 59,384 361,137
1989 160,061 87,959 0 0 248,020 37,846 285,866 29,803 229,803 259,606 357,447
1990 154,310 80,377 60,297 13,046 308,030 84,626 42,721 435,377 24,041 224,041 248,082 574,742
1991 29,436 2 6, 120 42,007 9,866 107,429 45,488 37,744 19Q661 17,945 218,717 236,662 528,741
1992 -EST 1,840 7,130 2,309 577 11,856 25,350 37,206 12,045 212,045 224,090 341,857
1993 EST 0 4,616 0 0 4,616 16,137 20,753 6,045 201,045 207,090 155,520
TOTALS 641,456 206,202 104,613 23,489 975,760 250,675 168,537 1,414,972 119,571 1,139,881 1,259,452,
WORST -CASE SCENARIO ASSUMPTIONS:
ACTUAL HISTORICAL DATA ( 1987 -1991 ) AS SHOWN ABOVE.
iNVELTMENT EARNINGS AS SHOWN ABOVE.
OUTLOTS PAID OJRRE�dTL`r' BALED UPON
THE ORIGINAL ASSESSMENT ROLL
TWO LOTS PARTIALLY PAID IN 1991; TO BE
FULLY PAID IN 1992.
FINAL 5 LOTS NEVER BEING PAID.
G, ASHFL A1Y- S
CITY OF OAK PARK HEIGHTS
SPEC. ASSESSMENTS- SWAGER'S 9TH. ADDMON -CASH FLOW
MIDDLE -CASE SCENARIO
5.53 YEAR
SPECIAL ASSESSMENTS INVEST. TOTAL BOND PAYMENTS END
YEAR P. PD. CURR. DEUNG. PEN. TOTAL OTHER INTER REVEN. JUNE DEC. TOTAL BAL
1967 128,240 0 0 0 128,240 120,561 6,989 255,790 24,533 24,533 231,252
1988 167,569 0 0 0 167,569 21,750 169,319 29,692 29,692 59,364 361
1989 160,061 87,959 0 0 243,020 37,346 285,866 29,803 229,803 259,606 387,447
1990 1 54,31 0 60,377 60,297 13,046 308,030 84,526 42,721 435, 24,041 224,041 248,082 574,74'
1991 29,436 26,120 42,007 9,866 107,429 45,466 37,744 190,661 17,945 213,717 236,662 528,741
1992 -EST 5,519 11,436 17,100 4,275 38,330 28,249 66,579 12,045 212,045 224,090 371,230
1993 -EST 0 4,616 0 0 4,616 19,366 23,382 6,045 201,;45 207,0.'ll 183'22
TOTALS 645,135 210,508 119,404 27,187 1,002,234 250,675 194,665 1,447,574 119,571 1,139,881 1,259,452
MIDDLE -CASE SCENARIO ASSUMPTIONS:
ACTUAL HISTORICAL DATA (1987 -1991) AS SHUN' ABOVE.
INVESTMENT EARNINGS AS SHOWN ABOVE.
OUTLOTS PAID CURREINTLY BASED UPON
THE ORIGINAL ASSESSMENT ROLL
7NO LOTS PARTIALLY PAID IN 1991; TO BE
FULLY PAID IN 1992.
T t O DEVELOPER LOTS WITH BUILDING PERMITS
ISSUED !N 1991 ) TO RE FULLY PAID IN 1992.
FINAL 3 LOTS NEVER BEING PAID.
CASHF..OY01 -S
CITY OF OAK PARK HEIGHTS
SPEC. ASSESSMENTS- SWAGER'S 9TH. ADDITION -CASH FLOW
BEST-CASE SCENARIO
6% YEAR
SPECIAL ASSESSMENTS INVEST. TOTAL BOND PAYMENTS END
YEAR P. PD. CURR. DELING. PEN. TOTAL OTHER INTER REVEN. JUNE DEC. TOTAL BAL
1937 128,240 0 0 0 128,240 120,561 6,989 255,790 24,538 24,533 231,252
1988 167,569 0 0 0 167,569 21,750 189,319 29,692 29,692 59,384 361,187
1989 160,061 87,959 0 0 248,020 37,846 285,866 29,803 229,803 259,606 387,447
1990 154,310 80,377 60,297 13,046 303,030 84,626 42,721 435,377 24,041 224,041 248,03. 574,742
1991 29,436 26,120 42,007 9,366 107,429 45,483 37,744 190,661 17,945 213,717 236,662 528,741
1992 -EST 5,519 11,436 17,100 4,275 38,330 30,818 69,148 12,045 212,045 224,090 373,799
1993 -EST 0 10,605 28,645 8,594 47,844 21,929 69,773 6,045 201,045 21;7,090 236,482
TOT ALS 645,135 216,497 148,049 35,731 1,045,462 250,675 199,797 1,495,934 119,571 1,139.881 1,259,452
BEST -CASE SCENARIO ASSUMPTIONS:
ACTUAL HISTORICAL DATA (1981 -1991 J AS SHOWN ABOVE.
!NVESTMENT EARNINGS AS SHOW# ABOVE.
OL,T OT PAID CURRENTLY BASED UPON
THE ORIGINAL ASSESSMENT ROLL
TWO LOTS PARTIALLY PAID IN 1991; TO BE
FULLY PAID IN 1992.
TWO DEVELOPER LOTS WITH BUILDING PERMITS
( ISSUED IN 1991 ) TO BE FULLY PAID IN 1992.
FINAL 3 H R A LOTS BEING PAID IN 1993