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Committee breaks down special assessment process

By Ben Rodgers

HOWARD – A special committee broke down how special assessments work in the village of Howard on Tuesday, July 24.

“This is strictly an orientation meeting,” said Burt McIntyre, village president. “It is to discuss what the program is. It is not to discuss what the program should be. That will come at a later meeting. We want to make sure everybody starts off on the same page on this thing.”

The Special Assessment Review Committee, made up of McIntyre and three village trustees, listened to presentations from Geoff Farr, director of public works, and Mike Kaster, director of engineering.

“The village has charged for special assessments for years and years, decades, a long history of that in the village,” Farr said. “Essentially this is all about having a fair way of calculating the costs of improvements and distributing the costs amongst property owners and the village because the village is a large participant in every special assessment project.”

He said property owners receive benefits from special assessment projects, which could include fire protection, water service, curb and gutter and more.

“I think the village’s policy is very fair and it has some things in it today that really benefit people who live here, so they’re not necessarily forced to make some tough decisions that people have made in the past,” Farr said.
Farr first outlined the process by which special assessments work in the village.

Geoff Farr, director of public works explains special assessments to a committee on Tuesday, July 24. Ben Rodgers Photo

He said it starts with a preliminary resolution which gives direction to the staff to prepare plans for the bid of construction work. Staff then comes back with a report to distribute those costs according to the policy, this is after those affected by the changes are notified. After that the board either modifies or adopts the preliminary resolution.

The village uses assessments for all underground utilities like water, sanitary and storm sewers, and also for laterals, which are small pipes off the large mains to each home, Farr said. The laterals go right up to the property line.

The valve itself, from the main, is the responsibility of the village.

There are also assessments for streets when a rural roadway is reconstructed to urban, which would contain no ditches, a storm sewer and reconstructed curb and gutter.

Any reconstruction costs are the responsibility of the village, along with sidewalk construction cost, which the village previously special assessed.

For new developments, the developer pays for all of these costs, Farr said.

If a driveway is needed, the village will charge 50 percent of the cost, unless a second driveway is needed, then that cost becomes the responsibility of the property owner.

For water mains, the standard size is 10 inches, anything above that the village would pay for the extra costs, Farr said. The same logic applies to streets where anything more than 37 feet wide is paid for by the village.

When someone is charged for special assessments he or she may also qualify for credits the village uses to take some burden away from property owners.

Farr said the biggest credit applies to property owners with corner lots.

“People on the corner lots have a lot of frontage,” he said. “It’s very simple, the concept is you’re really improving two sides of your home.”

The village will cover 60 percent of frontage being approved up to 150 feet.

For example, if a lot has 150 feet of frontage on one side, and 190 feet on the other, that’s a total of 340 feet. The total frontage is 340 feet, multiplied by 60 percent comes to 204 feet.

However, the village will only pay up to 150 feet. So the credit would be 75 feet applied to each frontage that receives work.

“You can see by this example why developers never want to have more corner lots than they have to,” said Paul Evert, village administrator.

Farr said there are many different lot sizes and dimensions, and this formula represents equity for all property owners.

“The idea is to make equity in fairness, so based on the various configurations, and there are a lot of them in the village, that we come up with something that constitutes fairness,” he said.

Another credit the village uses is the large parcel/non-dividable lots credit.

For lots where a home is in the middle and the lot cannot be divided into a smaller sellable lot (80 feet of frontage per village policy) the village picks up half of the assessment costs.

If there is wetland on the property that makes it unbuildable, that does not factor into the calculation. The village then pays for that frontage.

The village also offers financing plans for property owners to pay special assessments, up to 20 years, but Farr said it is typically 10 years, with a borrowing rate .5 percent over the village’s borrowing rate.

This would apply until the property owner sells, divides or builds on the property.

“Basically if you build a house, you divide or it’s sold, you have to pay for assessments, otherwise you remain in payment plan, which can transfer to an immediate family member and not trigger the full payment,” Farr said.

For vacant lots that are special assessed, the payment plan applies, but there is no interest rate or timeframe to pay the village back, unless the lots are sold or development occurs.

Technically a property owner of a vacant lot wouldn’t have to pay for assessments until decades in the future, and they would have to pay the original cost of the improvements, not the current cost, Farr said.

Village staff did not immediately have a figure available for how much money is out there that has not been paid back on improvements at this time.

Farr said the final type of financing plan discussed means the owner does not have to pay interest for one utility hookup if it’s the only one being installed at the time and another one is deemed required by the village at a later date.

An example would be water being installed before sewer, so the cost of the water hookup would be deferred until sewer becomes available. At that point the property owner would be placed on a long-term payment plan.

The committee set a future meeting date of 6 p.m. Aug. 8 at the village hall to look into what other municipalities in the region do in regards to special assessments.

“What this committee is going to be charged with, and eventually the whole board, is there any component of what we’ve just been presented that could be better, where it’s still a win-win situation that benefits the property owner, and doesn’t impact the village and the taxpayers?” McIntyre said.

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