Lawyer Douglas Ottenbreit appeared before the regular meeting of Yorkton Council Monday to voice concerns over the interest levied on money owed the City associated with 20 Agricultural Avenue.
Ottenbreit said as it stands his client, the property owner, owes just shy of $10,000, with nearly $3,000 of that being interest, or penalty.
The interest charged on the account was one per cent per month, or 12 per cent per annum.
“We seek a reduction in interest charges,” he said.
Ottenbreit said a more reasonable interest charge would be one in line with mortgage rates, which he said averaged 4.4 per cent in 2011, and 5.24 per cent in 2012.
Ottenbreit said the City’s interest rate might even contravene a provincial Act, but added his client was not suggesting to go to court on the point.
Councillor James Wilson asked Administration how Yorkton’s interest charges compare to other cities in Saskatchewan.
Lonnie Kaal Director of Finance with the City said, “We compare with other cities on a regular basis,” and Yorkton’s in low by comparison.
While admitting the rate charged is higher than a mortgage Kaal said, “let this be known we’re not in the business of lending money.”
Ottenbreit was not convinced.
“Twelve per cent doesn’t represent the marketplace,” he said.
Coun. Les Arnelien countered by reiterating that the City “is not a bank,” adding “there is no way we are excessive with our interest rates.”
Mayor Bob Maloney said Administration would be in touch with Ottenbreit regarding the situation.