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City feels the lending pinch

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It’s been hard to miss the flood of national news about America’s mortgage collapse and its impacts on homeowners and developers around the country.

While the lenders behind the snafu walk away unscathed, thousands of homeowners are reeling. And reeling right along with them is the city of Missoula.

At Monday night’s City Council meeting, the council unanimously approved a resolution for a “Pooled Sidewalk, Curb, Gutter, and Alley Approach Bond.” The bond, totaling $920,000, would levy a special assessment and tax on all homes and businesses in Missoula neighborhoods where sidewalks and the like need to be brought into compliance with city code.

One issue raised by Ward 3’s Stacey Rye 3 was the interest rate on the bond—it seemed higher than in previous years.

City Financial Director Brentt Ramharter said at the meeting that the national mortgage collapse had at least something to do with the increased interest rate on the new bond.

“[The collapse] has caused a lot of problems for everyone, just look at Wall Street,” Ramharter said Tuesday. “Basically it’s increased the interest rates the city gets, and that has been passed along to the property owners.”

Ramharter explained that the situation comes from trepidatious lenders who fear getting burned by unpaid debt now that the lending market seems shaky.

“It takes away bidders [for the city’s business]. We only got two this time around, and normally we have 12 or more,” he said.

Property owners have the choice of finding a contractor on their own, paying the city for the work, or paying off the improvements incrementally in property taxes every November and May over the next 20 years, starting this year. Ramharter said the city’s interest rate remains a better deal than that available to most individuals.

“It’s a good way for people to save some money,” Ramharter said.

Public comment on the bond is open until Sept. 10.

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