Goessel responds to resident's concerns
Editor's note: This letter, written by a consultant and approved by the Goessel City Council, is a response to a Letter To The Editor written by Anton Epp, of Goessel. Excerpts of Epp's letter have been italicized in the city's response.
To the Editor:
In response to statements made in the Hillsboro Star-Journal:
Statement made: Citizens of Goessel need to hear the truth about what your city council has indebted you to. This is with regard to the Harvest Meadow Addition. According to the resolution adopted by the governing body of the city on June 19, 2006, and signed by Mayor Peggy Jay. Upon signing, the resolution provides the "such improvements be made without notice and hearing." This partly explains the verbal refusal of accountability attitude of some council members, or the silent treatment by others, when I ask inquiring questions about Harvest Meadow.
Response: The petition, as is required by K.S.A. 12-6a04(b)(6), contains a request that the Harvest Meadow Addition improvements be made without notice and hearing, which would otherwise be required for projects initiated by the governing body, rather than by petition of the affected property owners. The resolution, when it provides that the Harvest Meadow Addition improvements be made without notice and hearing simply complies with the statutory request in the petition and further complies with K.S.A. 12-6a04(c), which provides that the governing body "may proceed without notice and hearing to order the improvement[s]" and that "no protest shall be received as provided in [K.S.A. 12-6a06]," the statutory provision that would otherwise require a notice, hearing and protest possibility for projects not initiated by petition. So, the absence of a notice and hearing and language to that effect is directed by statute, not by any decision or "refusal of accountability" by the governing body.
Statement made: The resolution, having been signed, gives your city council an open checkbook to spend without accountability towards you, the citizen. The resolution states that a petition was signed "by 100 percent of the owners of record of all the area liable for assessment for the proposed improvements." Myself, and I am sure many other property owning citizens of Goessel, have not seen or signed such petition. And all property owners of Goessel will certainly be liable for assessments for the proposed improvements as I will substantiate in this article. The estimated sewer, water, and street costs for Harvest Meadows are $403,199. This is subject to an increase of one percent per month from the date of adoption of the resolution. That figure will grow to $419,570 by Oct. 19. The improvement district, or developer, will pay $15,300 for sewer, $9,600 for water lines, and 100 percent of street improvements, these amounts are agreed upon the date of signing. Which means as of Oct. 19, for the Harvest Meadows addition, the city portion of the sewer improvements is $134,840, the water improvements is $35,359, that you will pay through increased property taxes. It gets worse.
Response: The petition and resolution are not an "open checkbook." The petition simply requests, and the resolution authorizes, (1) the Harvest Meadow Addition improvements to be undertaken as public projects of the City, (2) the improvements to be financed through the issuance of bonds by the City, in an amount that is estimated, with an industry standard inflation factor to account for time involved in the process, in such documents, (3) the apportionment of the cost of the improvements between the city-at-large and the Harvest Meadow Addition (the benefit district) and (4) the imposition of special assessments on Harvest Meadow Addition to pay for the apportioned cost of the improvements.
The City will temporarily finance the costs of the improvements through the issuance of temporary notes (this is essentially the construction financing) and such temporary notes are limited by, and may not be issued for an amount that exceeds, the estimated costs of the improvements, as set forth in the petition and resolution. Only Harvest Meadow Addition will pay special assessments for costs of these improvements. No other property in the City will be liable for special assessments for these improvements. The city-at-large is responsible for part of the costs of the water and sewer improvements, which is not unusual, as those improvements allow for the expansion of the customer base for enterprise/revenue-generating activities of the City. The city-at-large may pay its share of costs from various sources, including water and sewer revenues, property tax revenues, or any other available revenues.
Statement made: The developer cost portion of sewer, water, and street improvements are called "specials." These are paid through the property tax on the property these improve. The Neighborhood Revitalization Program of Marion County will rebate 90 percent of the property tax, the first and second year, back to the property owner, the developer. Under this program, the rebate lowers to 80 percent, 70 percent, then 60 percent, in succeeding years. The resolution authorizes the city to issue bonds to pay for all amounts of the improvements. Don't be fooled by terminology. This is borrowed money, a debt and all tax paying property in Goessel becomes collateral. The "specials" portion of the property tax on property in Harvest Meadow is supposed to pay its agreed upon portion of the bonds. The 90 percent rebate of years one and two, and rebates in succeeding years, will leave a serious shortage of funds in the bond repayment schedule.
Response: The special assessments associated with the Harvest Meadow improvements will not be subject to rebate under K.S.A. 12-17,114 et seq., the Neighborhood Revitalization act. Under that act, the only amounts that are rebated are the incremental ad valorem real property taxes produced within a revitalization area. While special assessments are in the nature of a special tax, they are not in fact ad valorem taxes (taxes based on the assessed value of real property), because they are payable only in relation to benefits accruing to property from certain special improvements. The Neighborhood Revitalization act has absolutely no connection to the special assessments in Harvest Meadow Addition.
Statement made: You, the present property tax paying homeowner of Goessel, will have to make that up and will see an alarming increase in your property tax to avoid default on the bond payment. When a home is sold in the addition, the tax rebate continues on to the succeeding owner.
Response: The City's temporary notes and general obligation bonds will be full faith and credit obligations of the City, but the city-at-large will only be responsible for its portion of water and sewer costs, as mentioned above, and any special assessments that are not paid. The City has required the developer to provide an irrevocable letter of credit in the amount of 35 percent of the costs apportioned to the benefit district. Of course, if special assessments are not paid, the City may foreclose on the property liable for the special assessments. Thus, the collateral for the special assessment portion of the financings will first be the special assessments, will second be the property liable for the special assessments, and will finally be the full faith and credit of the City.
For the Goessel City Council,
Todd Loescher,
Public Finance, D.A.
Davidson & Co.
