Fairways residents to begin paying special assessment for road work

In order for the city to take over control of the roads, the subdivision needed storm sewers and upgrades to its roads, sidewalks and curbs. Because of the unique situation, the city agreed to pick up the tab for half the total costs, while the residents are responsible for the rest.

The total cost of the project is less than expected, and the city is paying about $188,260, leaving that same amount for residents to pay through a special assessment district. The first payment will be included in the July 1 summer tax bill.

How much each resident pays depends on the amount of road frontage they have and the costs range from $126 to $323 per year for 10 years. Residents can also opt to pay their entire assessment in a lump sum and not incur any interest charges, said Kim Garland, the city’s administrative director.

She told City Council that residents in the subdivision have three options. They can pay off the total amount due with their July 1 tax bill, or pay the smaller installment amount with interest during the 10-year period, or if they decide to pay off the amount owed off sooner than the 10 years, the city will calculate what’s owed at the time and they'd save additional interest.

Currently there are about 70 homes and about 34 vacant lots in the subdivision, and each homeowner will receive a letter with instructions about the options and the individual assessment. In addition, the City Council recently unanimously agreed to a budget amendment that involved a temporary “intrafund loan” of $200,000 from the general fund to the street fund.

"Because the overall cost of the project was under $400,000, the city was able to fund the project using existing cash fund balances," according to an agenda item summary. However, the street fund does not have the cash balance available to fund the entire project.

The money will be paid back to the general fund in equal installments over a 16-month period beginning in July 2012 with interest, Garland said.

The street fund will pay the general fund 3.5 percent interest, “which is the rate of the city’s two most recent bond issues and the rate that will be charged to the Fairways Special Assessment properties.”

City Council was assured that this was an acceptable accounting practice, and had been used in the past. Council Member Cheri Albertson asked if a transfer such as this would become a “finding” in the city’s annual audit and she was told that all the proper paperwork would be filed and that it was allowable.