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City Task Force To Review Special Assessments

By Staff | Aug 13, 2015

A report and request from an independent task force about special assessments has led to the creation of a new city task force. This new task force, to be appointed by the Mayor, will review special assessments in Emmetsburg.

Pete Hamilton, chairman of the CRG Task Force, presented the results of a study on special assessments to members of Emmetsburg City Council last Monday, Aug. 10.

Hamilton stated there were four areas included in the study:

The history of special assessments in Emmetsburg.

How the city currently funds large scale projects.

How other cities fund their projects.

How the community and its leaders can use this information to begin dialogue about special assessments.

Hamilton noted, the study was not done to affix blame or accuse past or present city councils, but to explore reasonable alternatives.

According to the study, the use of special assessments as a funding mechanism started with a 1996-97 sewer system project.

“As a result, special assessments have become a way of life,” Hamilton said.

Addressing the second point, Hamilton read from the report, “Our city uses a combination of funding methods such as GO (General Obligation) Bonds, grants, TIF and special assessments. Approximately 83-percent of the cost of the current project (Lake Street) is being funded with a GO bond to be repaid by property taxes.”

He went on to outline a historical review of five city infrastructure projects that involved special assessments.

Members of the CRG task force contacted 40 cities, each with a municipal utility, to see how they fund large infrastructure projects.

Of the cities contacted, over three-fourths were under 5,000 in population; and all but one owned some form of municipal utility. Twenty-four of the 40 cities have developed long range capital improvement plans; some were just starting to develop such plans.

“When asked the question of how are large projects funded, a variety of answers were given as follows,” said Hamilton. “27 use GO bonds, 12 use Revenue bonds, five use special assessments, 16 use utility rate increases or utility reserves, 14 use local option sales tax receipts, 14 use grant money, five use some form of TIF, three use road use tax funds.

“Of those five cities who use special assessments as a funding source, four said that special assessments accounted for less than 10-percent of the total project cost. One city said it was over 10-percent. Emmetsburg’s latest project is 16.9-percent,” said Hamilton.

Six points of information the study took away from their survey:

1. Several were envious of our income stream from the casino.

2. Several said that they tried special assessments but they were so unpopular they did not go back to them.

3. Several stated that they believed that a public utility and public streets should be paid for by all who live in the town.

4. One said that even though they have special assessment funding they only charge for the 2.5′ of curb and gutter and they only charge for one side of the lot for a corner property. They don’t assess for sewer and water service, that cost is built into the rate structure.

5. Those cities that have established funds for future projects seem to be pleased with their results.

6. Several cities used a variety of methods to raise dollars for capital projects ranging from a $10 surcharge/month on utilities to putting aside 5-percent of the utility revenue annually.

“Legally, we don’t have to do anything,” said Hamilton. “Morally, we need options.”

Looking at how the community can use this study to begin serious dialogue, Hamilton requested that a new task force be formed to come up with a solution to special assessments. He suggested the new task force include members from the city council, Emmetsburg Municipal Utilities board of trustees, and citizens. Hamilton offered to serve on the committee.

“If you do come up with a task force and reduce special assessments or get rid of them it would be a great legacy for this council,” Hamilton said.

Councilman Corey Gramowski stated, “There is no win-win in any community. It’s hard to pay extra taxes, bit I don’t see a different way. If we completely fund by GO Bonds, our taxes would double. There are other options, but it will burn you in the backside.”

Councilman Brian Campbell said, “There is no harm in seeing if there is a viable alternative. Our decision here tonight is whether or not to form a task force.”

Campbell made the motion that Mayor Heddinger a point a task force to investigate a viable alternative to special assessments. All council members voted in favor.