a new era of development - Government Finance Officers Association

property within the improvement district as provided for in
the assessment roll. These assessments are not a general tax
under the laws of the state, but all properties in the district are
required to pay the assessment. Since these assessments must
be based on the benefits received, the document provides
findings that the property in the district does receive benefit
from the special assessments and then explains those benefits.
These benefits can be explained as follows:
1) the property received a special benefit from these
improvements, and the benefit is greater than the
amount of the special assessment;
2) special assessments are collected only to the extent necessary
to pay for these improvements and the associated
bond issues; and
3) the method that has been used to allocate the special
assessments reasonably reflects the benefit that has been
received.
The assessment roll identifies the tax parcels assessed as
part of the project and quantifies the amount of the assessments
on each one. Schedules attached to the assessment
roll are updated annually, as parcels are subdivided, to
revise the amounts on each parcel. As a result, homeowners
and businesses that purchase property in the district can
access a schedule showing the assessment on their property.
Ultimately, a parcel that represents a single family home is
responsible for TIF/MID assessments of not more than $860
and MID permanent assessments of not more than $813 per
year, and these amounts cannot be increased. These assessments
are imposed to cover three specific three costs: the
principal and the interest required on the TIF/MID and MID
permanent bonds, and annual administrative costs incurred
by the city related to this district — mainly the annual update
to the assessment report.
The rate and method of apportionment of assessments
(RMA) is incorporated into the assessment roll and includes
all terms and provisions regarding how assessments are
collected over time. The intent is to specify all terms at the
outset so all participants (the city, developer, future property
owners, and bondholders) know exactly how all assessments
are designed. The RMA includes terms related to total assessments
collected each year, how they are paid over time, and
how they are reallocated as property is subdivided. The RMA
also defines how assessments are reduced if improvements
in the district cost less than expected and how these assessments
are then reduced for each one of the different parcels,
and it provides guidance on how assessments can be prepaid
if the property owner chooses to make payments over the life
of the bonds.
OVERVIEW OF PROJECT
COSTS AND ASSESSMENTS
Bonds will be issued to finance all or a part of the costs of
the public improvements (see Exhibit 5). Each of the three
bonds previously mentioned and the assessments imposed
on those bonds represent three “zones” on the property:
the TIF/MID bonds (all of the property); the MID permanent
bonds (all property except the industrial area); and the MID
paydown bonds (only the residential area). There are multiple
property types within each one of these zones, since
the property in the improvement district is proposed to be a
mixed-use development, including various residential types,
retail, office, hospitality, and industrial uses. As a result, in
addition to determining the assessments within the three
zones, the assessments paid by the properties within each
of those zones must also be differentiated by identifying the
classes of property within the development. The city’s consultant
worked with the developer to identify seven classes of
property and the approximate footprint each class one would
leave on the development (see Exhibit 6). The city formally
approved the uses of the property as a part of the land development
agreement.
Assessments are based on a combination of two factors.
First, certain improvements primarily benefit specific areas of
the property within the district. For example, roads interior to
Exhibit 6: Classes of Property Use
within the Improvement District
Class Description Proposed Development
1 Single-Family Homes 737 units
2 Town Homes 310 units
3 Apartments 500 units
4 Hotel 120 rooms
5 Office 135,000 square feet
6 Retail 407,500 square feet
7 Industrial 2,820,000 square feet
October 2010 | Government Finance Review 19