LID costs create concern

By Clare Jensen

The Signal
cjensen@tacomaweekly.com
Published on: October 23, 2008

Edgewood is another step closer to forming a local improvement district (LID) along the Meridian corridor.

Phase one of Edgewood’s general sewer plan, which has been in the works for the past eight years, is expected to cost upwards of $20 million, and the city council approved the first reading of an LID ordinance that would allow residents to foot the bill.

The ordinance must pass its second reading, which will occur Oct. 28 before it goes into effect 30 days following council approval.

At a public hearing on the proposed LID, about 50 residents showed up to hear the thoughts of about 10 people who spoke on the matter.

The majority of speakers noted that they are in support of sewers, and originally supported the citizen-proposed LID, but financial uncertainty has them worried.

Recently, property owners within the phase one boundary along Meridian received preliminary assessments of what their property value gain would be after a sewer is installed, which in turn, determines the property owners’ financial obligation to the LID.

Unexpectedly high benefit appraisals have left many residents concerned with whether or not they can even afford the cost of an LID.  

Karen Jackson, president of the Edgewood Grange, spoke at the public hearing in opposition of creating an LID. She stated that the grange’s share of the sewer payments would be $25,000 – a relatively small amount compared to other constituents she cited, but an amount that could prove troublesome for the grange.

“For a small non-profit, this is going to kill us,” she said. “This is like a prison sentence.”

City officials stress that the assessment is only preliminary, that the numbers will probably change when the project is completed and actual costs are considered.

This left some residents concerned that they may be agreeing to something that could turn out to be even more expensive then they originally anticipated.

“I’d feel a lot better about this project if I know what it’s going to cost me,” said Gary Finlayson, property owner of five undeveloped acres at 110th Avenue and 24th Street.

The council passed the first reading of the ordinance stating that if residents really want a sewer system, the time is now. If the city waits until after Washington State Department of Transportation completes a road-widening project on a section of Meridian in 2010, the costs will be even higher, and it is uncertain whether or not the state would even allow the project to commence for several years based on the principle of ripping up a brand new road.

Local developer Bob Knutsen owns 30 acres of land within the boundaries of the LID. He plans to construct a major housing development that would have a major benefit from sitting on a sewer line.

As a general contractor, he stressed that costs could go down in the future, especially during rough economic times.

“It’d be a big mistake not to do this at this time because it’s going to cost a lot more (later),” he said. Knutsen noted that his property’s preliminary appraisal assessed $3.5 million that he would have to contribute towards the LID. He said he believes the currently high numbers will in fact go down by the time the final assessment roll comes out in 2010. “Until the actual bids come in, you really won’t know for sure. I ran the numbers myself and I think it will come out about 20 percent less.”

City officials noted that the final assessments will be based on the actual construction costs as well as interest rates at the time of project completion in 2010. Residents will have the opportunity to appeal their individual assessments at that time. Constituents would not have to make payments until 2012. Residents can also petition the formation of the LID if it passes through the second reading later this month. Petitioners will have 30 days to accumulate support from at least 60 percent of the residents in the LID area.

“We’re trying to get those costs down,” said Mayor Jeff Hogan.

Deputy Mayor Dave Olson said he supports forming the LID because he said the sewer is “necessary for the future of the city. I think the benefits for the residents and the city are there.”

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