City and project leaders outline basics of Third Avenue NW street project

by Dwight Jones

Recently, property owners throughout the Third Avenue NW area of Waukon have received notification via a letter from the City that their street is scheduled for a major repair and replacement project this coming summer and that the City is anticipating using an assessment to help pay for the project. Assessments, which are not overly common within the City of Waukon but have been used in the past, combine shared costs between the City and adjoining property owners.  Most every assessment, whether within Waukon or another location, is addressed individually and is unique.
Assessments in and of themselves are complex and can be frustrating for both the City and affected property owners. Ideally, cities would write a check for every street project, no matter its size, scope or situation, with funds already on hand. Reality says that having such an unlimited fund balance is unrealistic, and assessments are a way to keep projects moving forward with a shared expense mentality.
However, those property owners asked to write a check to pay for “their portion”, or as is often the case, having those dollars added to their property taxes, typically never view that assessment as good news. As is the case with Third Avenue NW - it is very apparent to all involved that the street is in need of repair, but at the end of the day, where does the money come from?
This article is an attempt to explain how this proposed assessment came to be, how the amount assessed to each property owner was determined, and so forth.
Each member of the Waukon City Council, along with Mayor Loren Beneke and Lyle TeKippe, the engineer overseeing the project, were asked to supply feedback for this article.  Though all did not respond, some did share what should hopefully be helpful information in educating the public on this possibly controversial issue.
In regards to this particular project, let’s look at some specific questions. First being, there have been a lot of street projects done the past several years, why start assessing now?  Councilman Joe Cunningham used the following explanation:  “Each fall for the last three years the City Council has reviewed city streets to see which ones should be repaired. Two years ago we agreed on some general guidelines that will guide how the City Council should approach street improvements in the future,” Cunningham stated, “and as we looked at the streets we decided that we need a long-term plan.”
Some would be quick to state that the City has a one-percent road use tax in place, and ask why not use those dollars to pay for the project? According to Cunningham, it’s a simple case of what that option brings in does not keep up with the projected expenses in the future. “It became apparent that the one-percent sales tax could come up way short on funding a 20-year plan. Thus, the return to property assessments,” Cunningham continued. “In my opinion, assessments in conjunction with the one-percent sales tax, is the only way the City can come close to fixing and maintaining our streets.”
Mayor Loren Beneke stated that he felt the Council had developed a “realistic formula” for paying for the streets, and anticipates that most projects “in the foreseeable future will be handled in a similar manner” as this one.
Councilman John Ellingson had a relatively simple answer when asked why the Third Avenue NW project and subsequent assessment was on the table. “Every person that runs for City government campaigns on fixing streets and sidewalks”, he said, “but in order to obtain a sustainable rate of street repairs and replacements it is going to take much more money than the one-percent road use tax can produce.” According to Ellingson, the City is currently doing three to four blocks of street work per year, but being responsible for 300-plus blocks of street throughout the city, that annual rate is far too low.
Next question, why Third Avenue, and why now? According to Cunningham, “we chose Third Avenue because of complaints, the age of the street and the traffic it carries. The purpose of the notification letters sent out was to begin the process of informing the public.” Beneke echoed those thoughts, stating, “We (he and the council) did a tour of the town assessing the street situation and it was a consensus that Third Avenue NW was at the top of the priority list.”
As for this project, the Council is proposing a 60/40 project assessment, meaning the city would pay 60%, and property owners 40%. However, the City is “fronting” $100,000, which reduces the actual property owners expense to approximately 35%. So, take the overall project cost, which in this case is $814,707, determine the total needed by affected property owners to cover their portion, and then start the determination on who owes what.
The total assessed portion for this project is estimated at $285,883, and if every property owner that received a letter pays an assessment, it would likely average around $3,400 each. The Council is currently considering allowing them to pay the full amount up front or to have it applied to their property tax payment plus interest.  Ten years is the timeframe that has been discussed, as far as the amount of time given to repay the amount due via property taxes.
And the assessment is not a flat fee situation, wherein each person pays a certain amount. Nearly every assessment is different and is based on select variables, essentially how much property you own, where it sits in relation to the street itself, etc. According to TeKippe, there is no state regulated calculation on figuring assessments, but the one used on this project is the same that has been used in Waukon in the past. TeKippe gave the following additional explanation: “Once these (overall project) costs were estimated, all the actual front footage of property on Third Avenue NW that was not street right-of-way was calculated. Total estimated special assessment costs were divided by the front footage number, which ended up being $50 per foot. A property owner then would have a preliminary assessment of $50 times their front footage if they owned the full depth of a lot that, in general, went half way back to the next block, or, in this case, 132’.”
TeKippe continued, “Should an owner not own full depth, their assessment would be split based on an assessment benefits curve that is weighted to take into account proximity to the street. This curve has been used for many years and has been accepted as a fair means of splitting the costs. An example, if two owners have the same size lot, one is fronted right on Third Avenue NW, the other is behind; then the assessment would be split 75% to the owner fronting the street and 25% to the owner that is located behind. Obviously, all other combinations are able to be addressed with the curve. The main reason why one owner’s assessment is different than the next is usually that his frontage width is different, because as mentioned above, the rate is the same.”
TeKippe finished with hopes that the community as a whole, and especially those affected by the assessment, would recognize that “the whole street from one highway to the other is being upgraded to the 31-foot back-to-back street with storm sewer, intake and sidewalk improvements to create a good street. This will continue to be a real asset for many years to come.“
The Council has scheduled a meeting for this coming Monday night, April 4 at 7 p.m. in the council room of Waukon City Hall to provide the public with as much information as possible on the project itself, in addition to assessment details.  Due to the fact that 80-plus letters were sent to property owners, it is anticipated that a majority will attend, so keeping the meeting moving forward in a positive manner is going to be important for the sake of all involved. The Council has scheduled segments to talk about the different areas of the project and assessment, with a question and answer time for each.
Agenda items include the presentation of the project, project funding (and why the Council chose to assess), calculation of assessments, and explanation of the payment schedule. Due to the large anticipated attendance, each person will be limited in the amount of time they can question the Council, similar to what was done during the recent vicious dog ordinance discussion.