Council sets interest rate at 4.5% and approves 20‑year option for Luta and Virginia Street covenant repayments

The Moses Lake City Council voted to approve a 20‑year repayment option at a 4.5% interest rate for landowners subject to Luta and Virginia Street covenants, formalizing the repayment framework for called covenants.

Nicole Owens, representing Habitat for Humanity of Greater Moses Lake, told the council the covenant requirement — which shifts construction costs for sidewalks, roads and utilities onto individual homeowners — had produced surprise bills in the range of $20,000 and threatened the affordability of homes Habitat intends to build.

City staff explained the rate. Staff member Brian Balzo told council that, after consulting the Municipal Research Service Center and the State Auditor, the city could not “gift” the borrowing rate; instead the city used the 30‑day local government investment pool yield (30‑day yield of 4.38% on May 16 as cited) and rounded to a 4.5% blended rate to recover foregone investment earnings and administrative costs. Staff presented three term scenarios (10, 15 and 20 years) and confirmed there is no prepayment penalty.

After discussion about administration and software tracking while the city transitions to Tyler financial systems, a motion to approve the 20‑year option at 4.5% passed by voice vote. Council did not record a roll‑call tally in the meeting minutes; the motion passed as “motion passes” on a voice vote.