Fiscal Note
The proposed resolution amends subsection 4.08(2) of the Madison General Ordinances to allow for an alternate interest rate on projects where special assessments are levied to fund a water main to serve on properties provided private water service by a private supply cooperate, and which are funded by the Safe Drinking Water Loan Program (SDWLP) loan issued by the State of Wisconsin Department of Natural Resources. For this type of projected, it is anticipated only one project will qualify for the unique treatment. The interest rate on the SDWLP loan is 2.145%.
Title
Amending Subsection 4.08(2) of the Madison General Ordinances to allow for an alternate interest rate on certain installment payments.
Body
DRAFTER’S ANALYSIS: This ordinance amends the City’s interest rate calculation methodology associated with certain special assessments that are paid by installments. As allowed for by Wis. Stat. Sec. 66.0715(3)(b), and as provided for by MGO Sec. 4.08(2), the applicable interest rate for installment payments is set by the Common Council at the time an assessment is levied. The interest rate is established based upon the prior year’s general obligation borrowing rate. This ordinance would allow a different rate to be used for projects where the special assessments are being levied to fund a water main to serve properties provided private water service by a private water supply cooperative, and which are funded by a Safe Drinking Water Loan Program loan issued by the State of Wisconsin Department of Natural Resources. For this type of project, the interest rate shall be the loan rate associated with the SDWLP loan. It is anticipated that there will only be one project that will qualify for this unique treatment.
***********************************************************************************
The Common Council of the City of Madison do hereby ordain as follows:
1. Subsection (2) of Section 4.08 entitled “Special Assessments-Payment in Installments” of the Madison General Ordinances is amended as follows:
“(2) Installment payments shall be calculated as follows:
(a) The first installment shall include a proportionate part of the principal of the special assessment determined by the number of installments, together with interest at the rate of in effect at the time the assessment is levied.
(b) The interest rate for each calendar year shall be determined by the Finance Director at the beginning of each year using the cost of the prior year general obligation borrowing (%) plus one percent (1%) for administration rounded up to the next highest one-half percent (0.5%).
(c) Notwithstanding Subd. (b), if the improvement project is of the type described in Sub. (1)(d), and the City funds the improvement project by a loan issued under the State of Wisconsin Department of Natural Resources Safe Drinking Water Loan Program (SDWLP), the interest rate for each calendar year shall be the City’s applicable rate of borrowing for the SDWLP loan.
(d) Said interest rate shall be computed from the date the assessment is billed through the next succeeding October 31, and each subsequent installment shall include a like proportion of the principal and twelve (12) months interest upon the unpaid portion of such assessment.”