03-24-1993 Council Workshop Agenda

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and recover the costs through revenue sources such as MSA funds, closed bond funds, general tax levies, etc. State Law requires that in order to bond for an improvement (without a referendum) we must assess at least 20% of the cost. Using a typical example of a $100 /foot street reconstruction cost, a property owner with 100 feet of frontage would be assessed $2,000. I believe this would accurately reflect the increase in property value that the owner would realize. I would suggest that we look at a 20/80 assessment policy where 20% of all street reconstruction costs (including street reconstruction, storm sewer, curb & gutter, etc.) are assessed to the property owner and 80% is paid for by the city. I think there are three major advantages to this plan. First, the cost of street reconstruction would be assessed fairly to all property owners. In the end, the amount of "total assessment" would ultimately be tied to the amount of property (frontage) owned and the value of the property (commercial would pay more than residential). Second, in the long run - it would save most taxpayers money. Assessed costs are not deductible for income tax purposes, but any increase required in property taxes to fund the program would be deductible by taxpayers who itemize deductions. This would result in an overall tax reduction to Little Canada taxpayers. In essence, the State and Federal Government would be subsidizing our street reconstructions. Third, property owners would not be faced with huge assessments to pay in a relatively short period. They would still pay their fair share, but 80% of it would be strung out through perpetuity. I know this is a radical change from our current policy, but I would ask that you keep an open mind about it and look hard at the advantages. I'm not even sure such a policy could work, and there certainly are some disadvantages. I encourage you to think about it and would appreciate hearing your comments. Page 16