City Council will continue to explore the option of assessing “infill properties,” directing staff to bring the item back for their consideration during a June 6 voting meeting.
If ultimately approved, the assessment on vacant lots in areas where utilities are available would lower water rate increases from a projected 8 percent hike to 3.5 percent for those on the system, according to city staff.
About $91 million in assessment bonds would refund the $91 million in commercial paper, according to city staff, if the proposal is ultimately approved by council.
Council recently shot down a proposed General Obligation Bond that would have affected everyone in the city, not just properties that are not hooked up, or property owners who have no services available.
Roughly 16,400 properties would be affected by the assessment, if approved.
The levy would equate to $5,136 per lot in District 1, and $6,750 per lot in District 2. Property owners would pay the total over 20 years in annual increments added to the tax bills for affected properties.
City Business Manager Mike Ilczyszyn said the assessment fee is akin to an accelerated impact fee, while City Attorney Dolores Menendez said it is like a capital reservation fee since property owners would be reserving their capacity for future use.
Budget Administrator Sheena Milliken said the assessment would not show up on tax bills or be collected until November of 2012, with the savings to rate payers realized in 2013.
Mayor John Sullivan said the proposal isn’t as cut and dried as presented, as it’s unknown what large parcels would ultimately be used for, so it’s difficult to charge them the proper reservation fee.
“This isn’t going to be a hop skip and a jump, it’s going to be a complicated process,” the mayor said.
Councilmember Kevin McGrail said property owners would essentially be paying for the pipes that are already in the ground.
McGrail said previously he would have a hard time supporting the infill assessment or a capital reservation fee, and that at least water should be brought to those areas in the north that have nothing.
“This seems to make no sense to me,” he said.
Councilmember Marty McClain said the council would likely get blasted by property owners for the assessment, but if the city could offer a discount of some type for early payment it might soften the blow. Otherwise, the council chambers will be packed, he said.
“People will fly in for this if they don’t live here,” he said.