August 5, 2010 at 7:00 pm in INFORUM
The taxing system used by Fargo and other area cities to develop and improve specific neighborhoods has long been debated. Continue Reading
Tags: assessments, Fargo, K12 education, news, special assessments, taxes 46 Comments »
Jason Eid, president of Eid-Co, you probably make more money than a lot of citizens in that area. You also make a lot of money off of these development areas. so I can understand you agreement to these assessments.
I for one, think they are unconscionable. Maybe the people should just stop doing busisness with your company for awhile, Maybe when you are hurting you will understand the peoples plight.
You say you are not upset with the #3,300 assessments on your home. Well $3,300 is a lot less than the $50,000 assessments some will have to pay. You are paying $30,000 less than some will pay for a vacant lot, valued at $12,000.
Now, just how did you get such a good deal???
Well-loved. Like or Dislike: 46 9
$3,300 is just an entry in the trust fund, checking account.
Well-loved. Like or Dislike: 33 3
My big problem with special assessments is that the city just levies them whenever they sit fit without any discussions with those whom have to pay the bill. I built a home in Osgood and paid my specials off with the purchase of my house. In the 4 years I have lived here, I have been hit with three additional special assessments. If I would have known these were coming, I would have bought a house elsewhere.
In addition, we are paying specials for something the city did not get right the first time. The city built 45th St poorly and did not handle the traffic that flooded down the street. So they are expanding 45th St this summer and I now have to pay a portion of that bill. If the city, who knew in advance that tons of people were going to be moving to the Osgood/Woodhaven/etc area, they should have built 45th St correctly to begin with.
Well-loved. Like or Dislike: 39 3
If my memory serves me correctly; The 45th St. Bridge over I94 has been torn down and rebuilt three times since it was first built. And who pays for Fargo’s lack of insight?
Well-loved. Like or Dislike: 35 3
He thinks the assessment is just fine. But then he did not get hit with a big one and his company is deferring the assessment so that the end buyer can be on the hook for it.
The way it is done the assessor just makes sure to have enough of the area controlled by developers so that even if every other home owner in the assessment district protests it will be upheld.
Well-loved. Like or Dislike: 38 3
A quick look at satellite maps shows that Fargo’s growth is being pushed to the south along a gravel road far from core city services, leaving large areas of open land on either side of this corridor. Sensible developement would call for building schools and other large facilities closer in, as they require quick response from police, fire, and medical providers. Uncontrolled growth will force us to build costly infrastructure to service this extended area long before they have the population to justify it. The burden on home owners in this area is overwhelming. Mike Williams seems to be the only Commissioner who understands this, but his voice is often drowned out by the powers that be. Brace yourselves for more tax increases.
I’ve always received notice of special assessments in advance and of meetings to discuss the project. It is also published in the newspaper. Maybe some folks think somebody should come to their door and read it to them. But, you shouldn’t be surprised about the city pandering to developers. For some time, cities would front 100% of infrastructure costs for developers. Then came the crash during the mid 80′s, developers walked away from their developments, and cities were forced to pay off bonds for improvements to a bunch of empty lots. Village Green in Moorhead is prime example. And guess which developer benefited the most when those lots were eventually developed? In many cities, the cost of the improvements is included in the lot price. This does drive up the price of the lot and forces upfront costs on the developer so only the big boys get to play. So there are tradeoffs. But that system isn’t perfect. If projects occur after the lot is developed, somebody still has to pay and that often comes in the form of an assessment. I believe the assessment process was a system heavily favored by two mayors back in the 70′s and 80′s. One because they were able to spread improvement costs beyond their own development to other unwitting land owners, the other based on philisophical reasons. If someone tried to change the system, the always heavy influence of developers and builders would create significant pressure on the City Commission. It would be a shock if things changed. Just to much good ole boy politics for that to get through.
Well-loved. Like or Dislike: 23 7
This system makes it too easy for the City of Fargo to do whatever they want. When I moved to Fargo 8 years ago I got my first assessment letter in the mail so I made the call to get information on how things work. It was explained to me that 50% of the property owners affected must protest a project IN WRITING!! I said to the person on the phone at the Assessor’s office “So Fargo can pretty much do what ever it wants” and she reponded with a laugh and said “I guess so”.
We can’t even get 50% of the public to vote for the President of the United States let alone write a letter of protest. There is a serious flaw in this process.
Well-loved. Like or Dislike: 32 3
It’s not 50% of the property owners, it needs to be property owner representing 50% of the land. Pretty difficult because the public land such as Davies school is a large percentage and certainly is not going to protest.
Like or Dislike: 1 1
The only reason Jason Eid can do this is in the article. He defers those payments. It must be nice to say that you are okay with the special assessments but to later say that you defer them so you don’t have to pay them. The people that buy the property are stuck with it and not you. I wish people that own land stop selling it to companies like Eid which are unethical in most of their business practices.
Well-loved. Like or Dislike: 35 4
So the city spreads the cost of balck top over 25 years, but black top only lasts about 18 years, so you end up paying for a road for an extra 7 years while you pay for it’s upgrade as well, The system clearly does not work.
Like or Dislike: 7 2
The way other places do it is that the current developments pay in taxes to the city which hold money for future development and infrastruture. It can not be touched. Then when the city has to put in infrastructure it is done by the city getting estimates and not the developer. The reason this should be removed out of the developers hands is because they do cheap work when it comes to road and sewer. My development is a prime example. It was put in 5 years ago. They are coming around now to do the final overlay of blacktop. But before they do that they are repairing every drainage grate on the streets, curbing, and mud jacking the curbing so the water flows right. So my special assessment on the house originally paid for this and it lasted 5 years when it should have lasted 20 at least. Now the new special assessment is paying to rip all of them up down to the main line under the street and repairing everyone of them and also curbing that has failed. WASTE of money. This is why developers should not be doing this work and the city should be so it is controlled better and inspected better. Then when it fails the city is on the hook to fix it. They have more invested in it to ensure it is right instead of blaming the developer and saying to the homeowners oh well you are going to get hit again – it is not our fault.
Well-loved. Like or Dislike: 27 0
Eid-Co has contacted the City about deferals, we have not received any at this time. We pay our taxes including the special assessment installments on all the land we own. You are welcome to take a look through the city records and see that we are current on them all.
BruceAlmighty, I received no “special” rate from the city on my personal home. My lot’s proposed portion of the cost is spread just like all the other lots that do not front 25th St at a rate of $20 a front foot. The rate for single family residential that have frontage on 25th St is $150 a front foot. If the lot is 150′ in depth, I am unaware of how the depth effects the rate.
I invite you to contact me directly for the answers to any other questions you might have about how Eid-Co is helping keep home ownership easy and affordable.
Hot debate. What do you think? 28 35
Just curios if the assesment covered the intire Davies school district like it should would your house be included?
If you really cared about getting people affordable homes you would join the protest so that they would have to make it more equitable to every one.
At the minumum this zone should include the complete Davies high district. It should probably be stread wider than that. The school district should have to cover some as it was their plan to put the school (that they decided Fargo was needed even though enrollment was down) down in the middle of no where.
Well-loved. Like or Dislike: 23 1
Jason – According to the forum article this is not the case – maybe you should contact them about the deferrals and get the story straight? In the following sentences it says your company is one of the two that have contacted the city for deferrals. Clarification might be needed – did you just contact them or actually receive one? It is a little vague. “Bittner said a half-dozen homeowners and two developers have contacted the city about deferrals. Jason Eid identified his company as one of those developers; the Ryland Development Corp. is the other major developer with land in the area.”
Jay, you are correct that it seems vague. To my knowledge, we have only requested one, not received a deferal.
Like or Dislike: 9 8
Well if you are asking for a deferment on these parcels of land you own, is it your intention then NOT to pay all your taxes? Why even ask for a deferment? And why should you get one?
Like or Dislike: 6 2
I know people who have moved here from other states who have never even heard of special assessments. They are quite surprised that they are required to pay for basic city infrastructure. There has to be a better way to do this. The city should be enticing me to move into their city/developments, not making me pay for them to be developed. We were charged 20,000 in specials in our neighborhood when we moved in 5 years ago, and guess what the roads suck. They need to be re-done in the worst way, and who is going to pay for that AGAIN?
Well-loved. Like or Dislike: 28 2
It seems completely unethical for the city to expand into an area that people have been living in for decades, and to then impose outrageously high fines for improvements that these property owners never asked for, and managed to get along fine without for so many years. I wish that the city of Fargo protected existing property owners better from new assessments, new taxes, new tax increases, and “renegotiations” of their pre-existing property rights. Sadly, there doesn’t seem to be much support for this view amongst the city leadership. I too am a transplant from a different area, and I cannot understand why Fargo has such high propety taxes and yet also has the expensive and, in this case, retroactive and capricious, assessments system.
The existing property owners who didn’t ask for a giant new school and a big new sewer system are right to be infuriated about this. The fact that they were “notified” that the city was going to slap a huge fine on them doesn’t change anything. Even if a burglar knocks politely before entering your home, they’re still a theif. I’d prefer to see tax burdens like this spread over the entire city, so more citizens could realize that this was happening to people, and demand some accountability and fiscal restraint from the city.
Avoice and Matt, you should have read the earlier comments and the article and you would have noted that this practice is common in this area but no all over the country. And I will ask again, if these people benefit from the improvements, why shouldn’t they pay? How many of these folks do you suppose are surprised by the growth of Fargo to the south? And I don’t think properties are assessed based on whether they wanted a new school or whether they had kids. You can’t say, “I don’t want that street” and then not have to pay for it, unless you are in a majority in which case there wouldn’t be a street. What I really wonder and please answer this, who exactly, and I mean, which neighborhoods, which people, which government, should pay for these improvements?
Like or Dislike: 5 7
You appear to be asking the following question: If a street windshield washer walks up to your car in NYC, and washes your windshield for you, why shouldn’t you have to pay him? Well, if you were perfectly happy with your glass previously, why should you be obligated to pay the window washer? You didn’t ask him to wash your glass, and if you told him to stop, he’d likely have not listened. So are you obligated to pay him? I think not. You might say “but this is the government, this is the majority, not some window washer”, and you’d be accurate in pointing out that there is a distinction, but I don’t beleive it’s that simple. Property rights are a sacrosanct part of the American experiment. Cities regularly intrude upon them, and the freedom of everyone suffers as a result. It’s important to understand that individuals have property rights, and that these are first and foremost in the maintenance of a free society. These rights should only be infringed when absolutely necessary, and in a way that is as non-injurious as possible to the rightsholders. It is the difficult task of governance to preserve the rights of individuals and yet accomplish the goals of the majority.
My understanding here is that the people who are being assessed the new cost of the larger road and sewer system already had roads and sewers. They didn’t need them to be any larger. Therefore, the suggestion that this assessment will be beneficial to them is specious. These infrastructure expansions are being done at the behest of the new school, and for the benefit of the school, and yet the costs are being dumped onto the existing private property owners. Even if the amounts were trivial, I am not convinced that what is happening in this situation is the ethical way to pay for public works. Furthermore, in this case, the costs are non-trivial — they are egregious. So there is the practical matter of — is it really acceptable for the government to put such crushing financial burdens on these people, and to leave them no recourse? And if the answer is “well, that is what our policy is, that is the process we use”, I think it’s important to reconsider the theoretical question of: “is this the right policy approach for paying for things? When should we make alterations or exceptions to this process?”
I don’t mind the $800 assessment I have for the nice streetlights in my neighborhood. I actually think the assessment model of “direct benefactor pays for improvements” has some good qualities. In my case, it’s clear to me how I am the primary benefactor of a street lamp near my home, and the costs involved are tolerable. I don’t think you can make the argument that a small group of land and homeowners are going to be the primary benefactors of the wider roads and larger plumbing infrastructure needed to support an enormous new school building. And so to suggest that they bear a tremendous cost burden for same seems like schadenfreude or indifference, both of which I find unbecoming of my city government — a government which is supposedly acting as my servant, and persuing my interests while carefully balancing them against the rights of my neighbors and my own.
To finally answer your question of “whom should pay”, I would contend that as the improvements appear to be part of the school construction project, and would not have otherwise happened so soon, those parties responsible for funding the construction of the school should be similarly responsible for the infrastructure needed to support the school.
I think that’s a good 1st order approximation, but I think it leaves out a crucial point. It could be that what I’ve suggested is already the case, and even so, the property owners in the area are still left with these large assessments simply due to the large numbers involved. I simply don’t think it is fair to assess current land owners with new taxes, assessments, regulations, and laws that were not in effect when they made their purchasing decision. When the city does this, they are in effect unilaterally renegotiating the very definition of what the homeowner was buying, and what it was going to cost them. A private entity could never alter the terms of a contract in this way, after everything was signed and agreed to. Yet this is what the city does to property owners on a regular basis. I’ve suggested to the city that they consider “Grandfathering” existing property owners under the assessments and other factors in play at the time of their original purchase, so as to preserve _part_ of their property rights as they originally understood them. The proposed assessments, zoning changes, tax changes, and so on, would come into effect the next time the property changed ownership, such that a prospective new buyer would know what she was getting intom, and have some assurance that the terms would not change while she owned the property, yet the current owner would also not be subject to retroactive changes to what they could do with their property, or what it was going to cost them to keep it.
Thus far, I’ve not found much interest amongst city officials in this idea. I think some people might be against it because they worry it might be difficult to administer, but I worry that many more are against this sort of approach because they simply don’t place a lot of importance on the property rights of existing home owners. If so, that’s something every American should lament. If we can allow our city government to raise taxes or assessments until we are kicked out of our homes, do we really own anything?
Like or Dislike: 17 3
Way way too damn long – make your posts shorter.
Like or Dislike: 8 11
I quit reading after the second line… What?
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And I wouldn’t drive my car in NYC. I’d take a cab and let the cabbie worry about it.
Like or Dislike: 6 10
here is a summary for those that didn’t want to read the long comment which was said very well. – the property owners don’t benefit from the improvement – the streets are already there with the sewers for them. The only people that are benefiting are the ones that go to school. So if the school needs larger infrastructure then the entire city should have to pay or at least area that is served by the school.
Well-loved. Like or Dislike: 16 1
There is one way to stop specials such as this one. When they have things on the ballot such as school projects, vote no. Problem is, people from all over the city vote on the original measure to approve building it, and then a select few get stuck paying for it. If the new school is designed to relieve pressure from the other schools, I would argue that everyone should pay a portion of the cost.
Like or Dislike: 14 5
Jim one problem with your statment. The school board did the school with out a public vote.
Like or Dislike: 15 1
Actually there was a vote several years prior. Most people just don’t remember what they actually voted for, which was to give the school board the authority to execute a long term plan that did indeed include a new high school.
Like or Dislike: 3 1
And actually everyone will pay for the school. Not just the ones living in further south south Fargo. Everyone in the district pays for that school. Even if they live in further north north Fargo.
Like or Dislike: 3 0
Matt has a lot of really good points. The whom that should pay for this particular debacle is the school district. They felt the need to put this school this far out in south Fargo where there are STILL gravel roads. Who did the school district think was going to pay for the infrastructure to support a $40 million dollar school? Maybe between the city and the school they should come up with the funds to pay it off. It is sick to make these people who have lived out there for 10+ years to pay for this all on their own. They had roads, and sewer and running water, they didnâ€™t need this, the school did. It is not fair to put it on their backs. If the residents of Fargo need to pay for it, then assess everyone in the Davies district, not just the few people that happen to live out there right now.
Like or Dislike: 14 2
Why in the world would the city assess just the folks who live in the Davies school district? We all live in this town and we all have an interest in the school system whether we have kids or the kids go to school up North or South.
Like or Dislike: 0 0
Bring it to Fargo City Court.
Lets have Judge Davies decide the legality of the schools road assessments.
His Fathers name proudly in scrolled on the cornerstone of this new school; which I believe is a great honer to Judge Davies Sr. His son should have some legal input on these outrageous assessments. Maybe he can just talk some sense into Fargo’s leaders.
Like or Dislike: 6 3
This is what you get for electing the same leaders all the time – get rid of your city leaders and don’t just shuffle them from one area to another (i.e. Linda Coates is now a school board member – she was worthless as a city commissioner, what makes you think she will be a positive for the school board).
And its is hypocritical of Jason Eid (and is reeks of an elitist attitude) to say he likes special assessments and then to even ask for a deferrment. No doubt he will get it because he probably greases the palms of city officials in one way or another. And his houses are a joke.
Like or Dislike: 13 3
How much did the Davies school property get assessed, maybe $100,000? Also, how much did the city add to the total, normally it equals project times 25%. So called engineering fees( ie special assessment department). Clearly the assessments are just another way to tax the property owners without raising direct taxes. As a matter of fact, the assessments are not tax deductable and are not a tax. It’s an improvement by definition and not a tax. The only ones who like this form of tax is the developers, period. The developers get most of the commissioners elected and unless the residents of this area wake up, the developers will continue to run this city with their elected puppets. Exclude Mike Williams and John Strand.
Like or Dislike: 10 1
Dave – I do agree with most of your comments except the tax deduct part. Unless I am missing something (I am not a CPA and is why I hire one to do my taxes) I believe I have both my property tax and special assessments tax deducted. Maybe it is different in MN then ND but I would assume not since it is a Federal tax form that we are filling out. I personally think they should just turn it all into a tax and be done with it because that is what it really is. If is quacks like a duck, walks like a duck then it is a duck. But the upper mid west does things differently then most of the general USA in this regard. I have not seen really anything good come out of special assessments except for developers. So I do agree on all your other points along with others on this forum. But the developers will keep lining their pockets and hook the cities for it and eventually the property owners.
Like or Dislike: 5 2
As someone who does taxes special assessments aren’t tax deductible, the interest you pay on the special assessments are though.
Like or Dislike: 5 0
Only the interest on the special assessment is deductable, not the principal. That is the same on the Fed or any State tax form.
Like or Dislike: 6 0
Special assessments aren’t deductible from federal income taxes like property taxes are.
Like or Dislike: 3 5
What I am finding seems really strange.
I looked up the specials against Davies School. That is available here http://apps.cityoffargo.com/parcel/index.asp?dispaddr=01-8424-00010-000&seg=1
Now it would be very possible that the current specials are not in the system. I wouldn’t expect them since they haven’t been finalized yet.
But what jumps out is the word “Exempt” under “Assessments”
Which, if they are being treated as exempt that means their specials will continue to be zero, just as they were at the time. There certainly were specials before in that area, after all it already had streets, sewer, water, just they weren’t sufficient to cover the school.
Now the strange thing about “Exempt” is that ND law specifically does not exempt political subdivisions from specials.
40-23-07 exempts only property used exclusively as a cemetary. In addition to saying political subdivisions are not exempt, it says, “Benefited property belonging to counties, cities, school districts, park districts, and townships is not exempt from such assessment, and such public corporations whose property is
so assessed shall provide for the payment of such assessments, installments thereof and interest thereon, by the levy of taxes according to law.”
Now unless some quirk in the home rule charter of Fargo makes political subdivisons exempt, the school isn’t exempt. I quit betting on anything not being possible under home rule long ago, if home rule throws out the ND law on special assessment districts then Fargo can literally do anything it wants to, and it might be able to. But in any case, assuming the ND Century Code laws on special assessments applies, Davies school isn’t exempt. I couldn’t find anything exempting political subdvisions in the city charter either.
Maybe someone in Fargo government mistakenly thinks schools are exempt from specials, maybe I just don’t know all the laws. But I’d suggest protestors look into it.
Marvin – Good point if this is the case. I did not read the statue however I will point out that home charter rules can not go against state statues. As we saw in the speeding ticket fiasco. While home charter laws can add to a state statue they can not subtract or go against it directly. Removing schools from it would be going against it directly. I am not an attorney but that is my take on it. The people of Fargo really need to band together even outside of this neighborhood and pack the city commission room and nicely ask them to re-evaluate. If that does not work then take the city to court collectively all the way to supreme court. That is the only way things will be straight.
Like or Dislike: 2 0
Exactly who do you think would pay specials assessed against the school district or the city? Do some of you have no clue how the school or city would pay for this? That would be like charging your 6 year old rent. Where is he going to get the rent money? From you.
Like or Dislike: 2 7
I don’t think anyone is missing who would pay. If the special is assessed against the school, the school district pays. If the special assessment district was expanded, the special district pays. Should I bother to point out that the school district had enough money to build Davies school without a building levy or vote? It would seem they should be able to handle the speacial assessment without driving Fargo education into the Stone Age.
No one is saying the cost just goes away. However, what would happen is that those benefiting from the infrastructure would be paying for the infrastructure, as they should. I, for one, see the current special as those who benefit aren’t paying and those who are paying are not benefitting near as much as they are paying.
Like or Dislike: 6 1
Davies school has $1,469,248.73 in special assessments to be levied against it according to the link you provided, Marvin.
Just so everyone’s on the same page…
Looks like it got updated, thanks for checking.
Like or Dislike: 1 0
Makes me wonder exactly how big the vacant lots with 1.1 million against them are? If this is on front foot and square foot, they must be almost as big as the school.
I never felt so happy to be renting.
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