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Utility Expansion Program in Cape CoralUtility Expansion Program in Cape CoralCape Coral FL Real Estate has been effected by the following City Council Vote on June 10, 2008 The following article appeared in The New-Press and was written by Brian Liberatore. Cape pulls plug on utility project Cape Coral City Council on Monday pulled the plug on the $1 billion utility expansion program citing a failing economy. Through the project has been rifle with controversy in it's 10-year history, Monday marked the first time council voted down project expansion plans. The move leaves the city, 6,200 homeowners and several hundred construction workers in limbo. The city, two decades ago, set up a method for funding utility expansions that applies the cost to property owners in the form of special assessments. The property owners must also pay a $6,750 impact fee when they hook up to the utilities. The property owners had the option to defer the assessments and fees up to 10 years. The assessments for SW 6-7 came in at $10,700. Adjusting for inflation, the assessment numbers for SW 6-7 were the lowest in the project's history. ____________________________________________________________________________________________ So what does this mean to residents in the West and North and Northwest Cape Coral:
_____________________________________________________________________________________________ City of Cape Coral Utility Expansion Program Source: Research by The News-Press. Cape Coral Utilities: How it's Paid For, September 30, 2006 What is the utility expansion program? The program is Cape Coral's master plan to extend water, sewer and irrigation collection and distribution systems to areas now served by shallow wells and septic systems. The project is divided up by geographical zones; work is under way in the so-called Southwest 4 area: SW-4 is roughly bounded by Veterans and Mohawk, parkways, and Chiquita and Skyline Boulevards. A small area wet of Chiquita and sought of Savonna Parkway is included. Who installs the lines? MWH Constructors Inc. provides construction management services. Subcontractors that bid on projects install the water, sever and irrigations lines. When are utilities coming to my part of the city? The city mapped out where utilities will be installed through 2017. The map is available on the city's Web site: www.capecorahutilityexpansion.com/largExpansionMap.asp. Copies of the map are available through the city clerk's office. There has been recent discussion of speeding up the project, so the current dates might change. How does the city pay for the work? The city sells bonds to finance the projects. Assessments are collected from property owners in the project areas to pay off the bonds. The city also can use state or federal grants and loans if available. Impact fees are used only for portions of the project such as major transmission line that benefit the entire utilities system. What are assessments? Assessments are the bills property owners receive for the installation of the lines. There is a separate assessment for water, sewer and irrigation lines. Assessments are figured on the size of your lot. What is my assessment amount? Many factors influence the amount of an assessment. Those factors include the construction and financing costs. Once the costs are known the city determines the assessment amounts and bills property owners on a per lot basis. Assessments are adjusted when the project is completed if the actual price is below the original estimate. A public hearing held before the assessments are approved by the city council. The city sends property owners a notice of the hearing at least 20 days prior to the final public hearing to levy the assessments. How can I pay my assessment? Basically, property owners can pay them all at once, pay an annual installment or defer payment for 20 years. Combinations of those options are possible. Those who opt to defer the payment for 20 years will have a large interest charge to pay as well. Will the annual installment be the same each year if I chose that method? Not necessarily. Annual assessment amounts are based upon you share of money that has to be collected to pay off the bonds and may vary from year to year. Can the annual installment be escrowed with my home mortgage payment? Yes, if you make monthly payments that include an escrow for property taxes, then the non-ad valorem assessments will be added into the payment amount. Contact your mortgage company or escrow agent as soon as possible after the council approves the assessment roll out to begin the escrow collection. If I sell the property and have not prepaid, do I have to pay the assessment? Your bank or lending institution may require full payment. Those who pay on an annual basis may be able to pass on the annual payments to the new owner. What if I can't pay the taxes and the non-ad valorem assessments at one time? A quarterly installment program is available through the Lee County Tax Collector¿s office for the payment of taxes and non-ad valorem assessments. The Lee County Tax Collector's office also has a deferral program available to certain homesteaded properties. You can contact them at 239 339 6000. Can I switch to annual payments after I've selected the deferred payment option? No. Once you select the deferred assessment option, you cannot opt out and go back to traditional financing. When do we pay our impact fees? Impact fees are due upon connection to the system. Undeveloped parcels will pay only after the property is developed. Do we have to connect to the new lines after they are installed? State law requires you to connect once the service become available. Connection is not required for irrigation water lines. Understanding your utility billWhen property owners receive their assessment notices they also receive information on the three payment options. Here is a summary of each option. Initial prepayment option Residents will be assessed for each service they receive---water, sewer or irrigation. They can prepay all of them or any one of them by prepayment deadline. Some are fortunate enough to be able to pay cash. Others use home equity lines of credit or refinance their homes. Prepaying allows a property owner avoid the costs the city incurs when it obtains financing to pay for the project. Those costs include obtaining financing and the interest on the loan over its term. Amortized payment option Residents can choose to pay an annual installment with interest over a 20-year period. The annual installment will appear as a separate line item on the property tax bill. The annual payment includes costs the city incurs when it obtains financing to pay for a project. The city considers this the traditional method of payment. Residents who do not prepay or select the deferred assessment plan automatically are placed in this plan. Residents still have the option to pay off any or all of their assessments and financing costs. Deferred assessment option Residents can put off paying the assessment for up to 20 years, but interest will accrue over that time. The balance plus interest and collection costs will come due if the property or a part of the property is sold, if there is refinancing secured by the property or if ownership of the property changes. Residents can make partial payments, but a portion of such payments will be used to cover collection costs. Assessment notices include a deadline for taking this option. Residents won¿t be allowed to use this option it they miss the deadline. A lien for the entire estimated amount due at the end of 20 years is placed on the property. Owners will get an annual notice showing the current balance and minimum amount payable. Utility and Terms Associated with FinancingSource: Research by The News-Press. Cape Coral Utilities: How it¿s Paid For, September 30, 2006
Assessment: A charge against real estate made by the city to cover the proportionate cost of the utility expansion program.
Assessment Methodology: Residents are charged the cost of the utility expansion program based on the number of equivalent residential lots they own. The number of equivalent residential lots is determined by square footage. Other methods of assessing residents are by frontage, the number of lineal feet that borders a roadway or by the square footage of a home.
Betterment Fee: One time charge to hook up to the city¿s utility system when the property is not within an assessment area but city services are available with in 200 feet.
Equivalent Residential Lot: One equivalent unit equals 5,000 square feet of land. Assessments are based on the number of equivalent residential lots.
Impact Fee: One time charge on new construction or to existing residents who tap into a utility for the first time.
Construction manager at risk: The construction delivery method Cape Coral uses on its utility expansion program. A construction manager or general contractor is brought on during the design phase to be part of the design team and to propose a guaranteed maximum price. The construction manager is solely responsible for correcting problems that come up during the project and for handling warranty claims after it is completed. It¿s normally used for building construction such as schools or government buildings.
Amortized Payment: Residents can pay their assessment in annual installments as part of their property tax bill. Interest is charged.
Deferred Assessment: This is the property tax based on a tax rate set by the city council and a taxable property value set by the Lee County property appraiser.
BUYERS BEWARE
Caveat Emptor: Sellers and their agents are legally obligated to disclose a pending assessment, but be aware sometimes they don¿t.
Due Diligence: Do you own research by asking city officials about the situation. Sometimes a utilities assessment is definitely coming but won¿t be imposed for years.
Contracts: Most standard contracts provided by an attorney or real estate agent will spell out who is responsible for any pending assessments, so be sure you know what your obligations are.
Utility Expansion: Assessing the ImpactBuyers: Attorneys and real estate agents warn that although sellers have an obligation to disclose pending assessments, some don¿t. It¿s a lot harder to get back your money after the deal goes through, so do your own research.
Sellers: A pending assessment makes it hard to sell a house as buyers shy away from the uncertainty in favor of homes already on city utilities.
What It CostsFor Example Here is how the expansion assesment was figured for the Southwest 4 area: Two 40-foot-wide Lots (minimum to build a house in Cape Coral)
Three 40-foot-wide Lots (typical for a larger house)
For true local and knowledgeable service in the Cape Coral FL Real Estate and Fort Myers FL Real Estate markets and the surrounding area, contact Kurt and Helen Gearing at 888 812 5393.
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