Archive for Wednesday, August 16, 2000

Council OKs downtown assessments; owners upset

August 16, 2000

With the downtown renovation project now complete, some downtown property owners walked away from Monday night's Tonganoxie City Council meeting feeling they'd accomplished nothing.

At the meeting, the council held a public hearing for the project's proposed assessments. After listening to several disapproving property owners, the council approved a plan to pay off the bonds in 10 years. Some owners were pushing for a longer period of time, claiming that it would put too much of a financial burden on them to pay off their portion of the bonds in 10 years.

Although council members said they understood the property owners' arguments, they agreed it was more pressing to save nearly a quarter-million dollars.

The assessments for the property owners ranged from about $3,000 up to about $20,000.

The total project cost was $1,038,298.74. Before the grant money was applied, the property owners owed $500,979.14 of that portion. The city owed $537,319.60. With the grant included, property owners' assessments totaled $294,328.14. The city's portion to pay is $315,970.60.

The city will use money from the general fund to pay the debt. The money in the fund is a combination of sales and property taxes, which is estimated at $860,000 in the budget for 2001.

"We hope that it will have a minimal impact on the tax rate," said Chris Clark, city administrator, "and that it will not have an adverse effect."

Along with approving the repayment of the bond for downtown, the council also approved a seven-year plan to pay the amount owed for the widening, chipping and sealing on Evans Road.

For the downtown part of the project, the council was considering three different terms of payment. With the 10-year plan, the interest will total $211, 550. Council also considered a 15-year and 20-year plan. The 20-year plan would include $456,868 in interest alone. A 20-year plan would accrue to $245,318 at a 5.45 percent interest rate.

The council felt that $245,318 was a large chunk of money that would be better spent on other projects.

The assessments were made on the basis of lineal feet. The cost for 25 lineal feet is approximately $3,500.

Clark, prior to the public hearing, recommended that the council go with the 10-year plan.

"In a majority, there's always going to be some dissent," Mike Crow, the city's attorney, said. "The purpose of the public hearing is for people with problems to express their views. It is ultimately up to the council to determine how the assessments are made."

Benny Ford, the owner of the postal facility's property was unaware of the payments until five days ago. She said she was taken aback when she heard the payments that she would be making. Apparently, Ford had not received any of the other notices on the pay-off for the project. The post mistress assumed that Ford was receiving the mail concerning it. Ford said the money she makes from the property's rent is her retirement income.

"I am not like some business owners because I cannot just increase the cost of my product," Ford said.

Susan Wiles, owner of Susie's Hair Fashions also voiced her disapproval of the length of the payment schedule. She was assessed about $3,600.

"I can't afford this kind of thing," Wiles said. "Why would I want to pay for something that is worse than it was before. I am only open three days a week and I can't raise my fees because most of my customers are on fixed incomes."

The step going into her shop is a considerable step up from the sidewalk and step down when leaving. Wiles said it wasn't that way before. Wiles was hoping to convince the council to accept the 20-year plan.

Wiles said that the city should have looked into the project more and asked more questions.

"I have been involved with these things for well over 25 years," Crow said. "There is more flexibility in this one than any I've ever seen."

Ron Barker, who owns Tonganoxie Marketplace at Fourth and Pleasant streets, thought the portion of payment for the business owners was a little stiff.

"The business owners are hurting now," Barker said. "If you do this to us, you're going to lose a lot of us."

The council thought it was more than fair since the city will be paying more than half of the bond.

Barker said that the business owners just don't make the kind of money that the city is asking to be paid in a 10-year period.

Another reason that some of the business owners are mad is because spreading the payments over 10 instead of 20 years makes it less of a tax deduction.

The other part of the project at hand was for Evans Road. The payoff for that project will be seven years at a 4.7 percent interest rate. Each of the assessments are $3,549 and can be paid in full within 30 days. Otherwise they will roll over to the seven-year payment schedule.

After the public hearing, Janet Angell, council member, made a motion to go with the 10-year bond and Evans Road for seven years. Pat Albert, council member, seconded the motion. The vote was 3-2 in favor. The council's dissent was made up of council members Ray Usher and David Hernandez.

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