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Under proposed plan:

By Staff | Feb 14, 2009

Under proposed plan: Assessments drop, utility bills rise.

The Blue Earth City Council got an in-depth look at a proposed new way to spread the burden of the cost of street, sewer and water main projects planned for the city in the next few years.

The Street Committee had presented a new assessment policy to the council at an earlier meeting, but last Monday night the council had a work session devoted just to a discussion of the proposal.

City Administrator Kathy Bailey explained how the new policy would share the cost of any improvement to a street to both the homeowners on the street and all the residents of the city as well.

In the past, if a street or sewer/water line were replaced, the homeowner was assessed all of the cost of the project.

Now, the new proposal is to share the costs of the sewer and water lines with every resident in the city, through an increase in service fees.

Streets, curbs and gutters would have 30 percent of the cost assessed to the affected homeowner, and 70 percent of the cost paid for with municipal bonds. Those bonds would be repaid with city funds raised from taxes on all residents.

“I think it is time we adjust the policy,” Councilman Dick Maher said. “But I have concerns with it. Quite a few people have paid a lot of assessments under the old policy, and some are still paying for it.”

Maher suggested giving those who already have paid assessments at the full rate in the past some type of break.

“I have a lot of sympathy for them,” he said, suggesting a rebate deal for those who have already paid assessments in the past.

Bailey said such an idea could create a lot of problems with the new plan. She also pointed out that much of the new funding will be coming from utility service fees. “At some point we just have to cut if off and start the new way,” she says.

Bailey explained how the average homeowner’s utility bill (not counting water and electrical) would go up from $32.70 per month to $36.50 per month.

The new policy calls for a 3-percent increase in water rates, to pay for new water mains, and a monthly $3.50 flat storm sewer charge to pay for sewer mains.

“The hookups from the mains to the residential homes would be assessed 100 percent to the homeowners affected,” Bailey says.

She again pointed out the impact of the new policy on three of the homes on Eighth and Moore streets which will have a street, sewer/water project completed this year.

Under the old plan, the three homes would have seen assessments of $14,000 to $21,000. Under the new plan, the assessments will range from $6,671 to $9,655.

“We could have a problem under the old plan,” Bailey told the council. “Any assessment must raise the property value by that same amount.”

Councilman Rick Scholtes says that even a $6,000 assessment may be hard for some homeowners to pay.

“The community seems to be committed to do this (street improvements),” Bailey says. “We needed a way to make it more affordable overall – with small monthly increases.”

Bailey also presented a 4-year plan on funding scheduled improvements. The plan showed how the projects on Eighth and Moore streets, Fourth Street, Highway 169, and Main Street can be funded using this new assessment policy.

“This is the best solution (to getting streets repaired) that I’ve seen,” Councilman Dan Brod says.

Scholtes agreed.

“We need to make sure it all cash flows with what we have available,” he said. “And that we can continue to upgrade the streets.”

Bailey says she is working on a 10-year plan at this time, attempting to do about 3-percent of the streets each year.

With 240 blocks of streets in the city, it may take awhile to get them all resurfaced, but Scholtes and the rest of the council were happy to see a plan being put into place.

The council is expected to formally adopt the new assessment policy at tonight’s meeting.