A committee is recommending the Minot City Council share the cost of an error in a buyout contract with the homeowner. But where the city's extra $5,500 would come from is uncertain.
The Minot City Council's Finance and Improvements Committee was confronted with what to do about a $9,545 error in a contract signed by Carl and Barbara Clemetson, whose flood-damaged home in northwest Minot is in the voluntary buyout area for a flood protection project.
The city offered the Clemetsons $97,060, which included $8,300 for the land and $76,100 for the structure, plus the 15 percent market trend adjustment. The Clemetsons appealed, and the Minot city assessor reviewed the information and recommended increasing the offer on the structure by $14,940, for a total offer of $112,000. The assessor then sent that offer to the Clemetsons.
Carl Clemetson told the finance committee that he never received the information and was unaware of the assessor's conclusion. He contacted the law firm handling acquisitions to check on the appeal and was told the city's offer was $112,000 on the house alone, plus $9,545 for the land. When he received the contract for $121,545, he assumed it was correct and signed it June 1.
City staff caught the error and did not sign the contract, sending it to the council instead.
John Warcup, attorney with the law firm, said it is unclear how the mistake happened whether it was a misunderstanding between the firm and the city assessor or a clerical error.
"This is a voluntary transaction. If the city chooses to go forward, it can," Warcup said. "There's no obligation on either party's part."
City attorney John Van Grinsven said a key factor legally is whether the Clemetsons were aware that the document was in error when they signed it.
"We need to do what's right instead of trying to figure out whose fault it is," council member Amy Moen said.
Clemetson said he is willing to settle for $117,500, and the committee agreed to recommend that amount to the council.
The city is using federal Community Development Block Grant-Disaster Recovery funds and money from the State Water Commission to purchase homes in the voluntary acquisition program. Under the guidelines of the program, the city is allowed to buy properties at pre-flood assessed value plus 15 percent, and any adjustments to that figure are to be established through the appeals process. Because the $5,500 in extra payment would be outside the appeals process, it couldn't be paid with the federal and state money.
"Somebody is going to have to make up that difference," Van Grinsven said, "and it would be the city or the law firm."