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More on the Street LID
At last night’s council meeting, Art Wuerth, the City’s new Finance Director, said “we need $7 million to complete the project.” With financing, that total will come to around $8 million, Wuerth said. This is in addition to the $32 million previously given (on numerous occasions) as the cost of the LID.
Ken Lanfear, the public works director, stepped in to explain. ”The cost is $32 million for the Street LID,” he said, “. . . which is about where we’re going to be. What we’re looking at additionally are the interim interest costs.
“The interim interest costs were not properly considered.”
Mayor Dean Bunkers later clarified that the correct term is “capitalized interest. That’s the interest for the $32 million. It was not factored in.”
Bunkers said he became aware of this in March, and that it meant that “for the summer project (the last portion of the LID), we couldn’t complete it unless we had a line of credit.”
Lanfear added that “last year hurt us,” as the second phase of the LID cost more than expected. However, he said the third and final phase is looking good, for construction costs: “We opened the bids today. Instead of $5.5 million, it was 3.46 million.”
To finance the $8 million, Wuerth said an Ocean Shores home assessed at $200,000 would have to pay an extra $1,175, which works out to extra payments of $9.60 per month for 15 years.
The total Street LID payment for a $200,000 home would be slightly more than $6,000.
These are estimates, with final payments to be based on the total cost of the project, and interest rates of the line of credit.
Tom,
Property, here speaking to real property. Once you put a house on the lot, it becomes part of the real property. Art, and the website from the city speak to the level of improvement the roads in front of the general area of properties and not a particular property. If you have a very poor roads in your general area you saw a larger bill than the property that had a better road. That was where people who got their assessment, estimated because we did not have the final cost of the project. Now that the project is going to cost at least 8 million more, we all will see an increase in the estimate we received. Now as to your throwing the word property in with lots. The LID looks at the value the road adds to the property which here are platted into lots. If your roads in your area need more improvement, then the lots in that area are assessed more. It is directly related to the County Assessor Office valuations. They too look at locations and use that location to increase or decrease their assessment. Real Estate Sales Assessment is yet another different valuation. Mine may be on the lake. Your’s may be on the canal or landlocked. Either way, they first look to the SPECIAL BENEFIT the LID provides that general area. This LID is for roads. Other LIDs have been for sewers. Each offers a SPECIAL BENEFIT based upon the project. Also, each of us did not get the same bill amount. Therefore it was not the same percentage, but different based upon the improvement to the roadways in the general area. If it was the same percentage, we would all have the same bill. That would mean that everyone got the same $2461 bill assuming 32Million divided by 13000 lots. You may want to look at all the Q&A. The second part is below the first part.
22. Are property owners along the same street paying according to the condition of the street in front of their respective houses?
The proposed assessments are based on the expected increase in property value in general areas.
38. How did the City reach the $35 million figure? Was it from Macaulay’s feasibility study?
The actual figure is $31.8 million, not $35 million. The estimated costs are based on a condition analysis of the streets and estimation of costs for appropriate repair. The Macaulay report indicated a city-wide benefit of approximately $46,000,000. The estimated project was divided into the benefit figure to arrive at an assessment of 68% of the estimated benefit.
41. If the treatments for two different roads are different, then why are the assessment amounts the same for lots on both of those roads?
The assessment amounts are based upon the estimated increase in parcel value, which is affected by the City-wide street system and neighborhood area streets, not the treatment option to be used on the road.
Randy, the FAQ section of the Street LID/Public Works website refers to “property,” not “home value,” as far as I could see. The other key word here is “estimated” (meaning: subject to change):
How was my estimated assessment determined?
o The City of Ocean Shores hired an appraisal firm to look at all of the lots in Ocean Shores. The firm determined the special benefit that each lot would receive after the roads were repaired. The estimated assessment is based on the amount of the special benefit of each property. Each property owner is assessed the same percentage of the special benefit to his or her property.
Tom,
When they appraise your property, they include the house if one is there. It is one and the same. By the way, if you look at Public Works Website you will see LID information and Q&As. It explains the process, assumptions and rationals. It also explains the part regarding increase in your property value in relationship to the improvement. The error here should have been known two years ago. I hope our current financial director is better at keeping track of what we recieve in revenue and spend as expenses. Maybe we should tie salaries to efficiencies and additional savings. Grants do not count as savings. We should be spending those as prudently as we do regular property tax revenue.
Joan, I think you’re reading that wrong, or perhaps by wording is confusing. It should work out to about 20 percent more than your original “bill.” Important note: I’m awaiting clarification on this, as the LID is not based on the home assessment, but the property assessment.
Holy catfish! I seem to remember being notified our bill would be under $4,000 for a home worth considerably more than $200,000. So now, you’re telling us this is going to be more like $12,000+? The plus sign after your $6,000 worries me – a little means a lot these days! I see a small problem brewing here.