05. Clean Water Partnership Loan Follow-Up for Tii Gavo
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MEMORANDUM
To: Scandia Mayor and City Council
From: Amanda Johnson, City Attorney and Kyle Morell, City Administrator
Date: September 3, 2025
Re: Clean Water Partnership Loan Follow-up for Tii Gavo
Background
City Staff are continuing to assist Tii Gavo to obtain a Clean Water Program Loan (CWPL) for
their community septic system repair/replacement. One of the items that has come up is the timing
of the items that the Council would need to approve and the related financial costs.
Tii Gavo representatives are asking for the City to agree to sign off on the related loan documents
for the CWPL before the association provides executed assessment waivers for all the properties.
Their concern is that if the DNR does not approve the loan, then there will be no point completing
the assessment waivers. According to the DNR representative, the project should qualify for the
loan, but that is not a guarantee.
Issues for the Council to Consider
City Staff have previously told Tii Gavo that we must have executed assessment waivers
from all 37 properties, covering the entire loan amount, plus interest and the City’s costs
before the City would officially approve the loan.
If the Council were to sign off on the loan prior to obtaining the assessment waivers, City
Staff would recommend creating some type of ability to cancel the loan in the event we did
not receive all 37 waivers.
There are legal costs associated with preparing the loan documents for the loan. At this
point, would it be appropriate for the City to collect an escrow to cover the legal costs?
In the alternative, is the City willing to carry the legal and administrative costs and add
them to the assessment amount? This would include the risk that Tii Gavo walks away from
the loan and the City is out all legal costs to date.