Watertown city council leaves assessment policy as is

The Watertown City Council opted not to change its current assessment policy for property owners impacted by street reconstruction projects in front of their homes during a public hearing on Tuesday, Nov. 13.

Despite a number of citizens who showed up at the hearing to voice opposition to the current policy, as well as councilman Michael Walters’ support for lowering the percentage of the costs that homeowners must pay, the council left in place the current policy that requires homeowners to pay 80 percent of the costs while the city picks up the other 20 percent. The 80/20 split — a policy that has been in place in Watertown since 1973 — was affirmed again this year by a 3-1 vote, with Walters being the lone dissenting vote.

Ultimately, the decision to leave the policy in place seemed to be made mostly in fairness to other homeowners who have paid 80 percent of the costs for every project since 1973, including many who are continuing to make annual payments based on the 80/20 split.

“I don’t think for us to make an adjustment at this stage of the game is fair,” councilman Nicholas Hoese said. “You’re going to have everybody on the old side of town down here saying ‘where’s my reimbursement for it?’”

While fairness was one of the primary factors in the decision, plausibility was another factor, an aspect that proved to be controversial throughout the course of the hearing. City administrator Luke Fischer informed the council that making a change to the percentage at this point — or tabling the topic for further discussion — would be difficult for a number of reasons. First, the city faces an end-of-November deadline to certify property owners’ assessment amounts to the county auditor, and secondly, as part of the city’s bonding process, it pledged to obtain a certain amount of money through assessments.

To change the level of homeowners’ assessments at this point would leave the city short of the amount it pledged, and it was unclear whether the change would even be allowed. The city already obtained financing for the project based on the assumption it would pay 20 percent of the costs.

The city’s potential inability to make changes at this point frustrated many in attendance at the hearing, including several council members, who were under the impression that Tuesday’s hearing was the proper time to discuss assessment levels.  Many believed the impression given during a hearing in March — a hearing that was said to be only to discuss the merits of moving forward with the construction projects — was that the hearing in November was when citizens were supposed to voice concerns over the amount of assessments.

However, the bonding process for the project took place between those hearings, and Fischer said that in finalizing financing for the project in July and August, the city council was affirming the policy that was already in place.

Councilor Steven Crowder said he was disappointed in what he believed was a miscommunication, but not an attempt to mislead.
“I’m disappointed in the process,” he said. “I think there was just a big misunderstanding. It was my understanding that tonight was the night we were going to talk about (assessment levels). … To find out we can’t change it tonight was disappointing.”

Crowder was especially disappointed because he and Walters both seemed willing to discuss the concerns brought forward by residents. Walters, in particular, favored lowering the percentage that residents pay for projects in front of their homes to a 50/50 split with the city. Much as he did in March, Walters pointed out that his phone calls to city administrators revealed that no other cities in Carver County ask residents to pay more than 50 percent.

“It’s too high, and that’s supported by my original fact that no other city in Carver County charges anything close to that,” Walter said of the 80 percent policy. “I think the city should be on the hook for at least 50 percent. That’s not based on my feelings; that’s based on what all the other cities are doing.”

Crowder agreed with Walters that 80 percent seems to high, but was less willing to make such a drastic change. Crowder expressed support for something closer to a 70/30 split, and said even a 60/40 split would be on his high end.

“If we made that big of a jump, I think we’d have a room full of people that have already paid when this has happened the last 39 years,” Crowder said. “I don’t think a jump should be that big.”

Walters indicated that he thought too much emphasis was being place on what has been done in the past. Just because something has been done one way in the past, Walters said, doesn’t make it right.
“You have to look at the current times and what is currently fair for people,” Walters said. “What was fair and just in 1973 might not necessarily in 2012 be fair and just. If it really was the right policy, you would think one other city in Carver County would have something closer to what we’re doing.”

This year’s street projects are part of a larger $1.97 million project that also includes the extension of streets and utilities into the new community park site on the east side of town. The city streets part of the project included the reconstruction of portions of Jackson Avenue, Hutchinson Road, Sugarbush Trail, Dutchman’s Way, Madison Avenue and Hunter Drive.

The total cost for the street portion of the project is $596,827. The city’s 20 percent share is $119,365, while the remaining 80 percent, or $477,462, will be assessed to benefiting property owners.

Assessments are based on the amount of lineal frontage feet property owners have along the road. In all, the projects encompassed 7,206.65 feet at a cost to property owners of $66.25 per foot. The average assessment for a single-family home is $7,307, with the minimum being $3,209 and the maximum being $14,606.

Homeowners have the option of paying it in full by the end of the year, or paying it off over 10 years as part of their property taxes at an interest rate of 3.7 percent.

Among the numerous property owners who took the stand in opposition to the current policy, the most prominent objection seemed to be to the word “benefit.” Chris Knox, who owns an apartment complex on Hunter Drive, argued that property owners with corner lots are being charged for their frontage feet on both streets, even though some never even use one of the streets for access to their driveway or for any other purpose. That point was well received by several of the council members, who indicated they also had concerns about the fairness of the policy for corner lots.

“Heaven forbid you live on a corner or have a bunch of footage in Watertown, because as soon as reconstruction comes through, you’re going to get a humongous bill,” Walters said.

Knox, who faces a $35,000 assessment, also questioned the logic that a property’s value is enhanced by these street projects. Though the assessable value of a home technically will increase by the amount of the assessment, Knox argued that no property’s sale value will increase by $14,000 — the amount of many of the assessments for corner lots — simply because there is a new street in front of the house.

Chuck Charnstrom, who recently ran an unsuccessful bid for a city council seat, argued that the 80/20 split also places an unfair burden on homeowners to pay for streets that everybody uses, while those that live on state or county roads don’t pay into that same system.
“They have the benefits of using the same city streets, yet they don’t pay a dime (in assessments),” Charnstrom said.

The streets that were reconstructed this year were the last ones to be brought up to date with the city’s current standards. Fischer indicated there are currently no new projects slated for construction, and that the city will have to re-examine its pavement inventory to determine when and where the next projects should be completed.

Hoese pointed out that because this was the last batch of streets to be updated to the current standards, it didn’t seem fair to change the policy at this point, something councilor Rick Mann agreed with.

While the council did not make changes at this time, it did seem open to continuing the discussion and looking at changes for the future.
“I don’t know what the answer is,” Mann said. “We have to finish this thing out the way it is and come up with a new plan that works for everybody.”