Special Assessments Taskforce

Boards, Commissions & Committees

Special Assessments Taskforce - August 6, 2019

Present: Jim Bullis, Kent Busek, John Cosgriff, Don Dabbert, West Fargo Mayor Bernie Dardis, Kristy Fremstad, Commissioner Tony Grindberg, Kevin Hanson, Gloria Palm Connor, Jeff Volk.
Absent: Commissioner Tony Gehrig, Bill Worth.

Call to Order:
Commissioner Grindberg presiding.

Approve minutes from May 2, 2019 meeting:
Mr. Hanson moved the minutes from the May 2, 2019 meeting be approved. Second by Ms. Fremstad. There was unanimous approval by all members present.

Commissioner Grindberg said based on feedback after the public forums on special assessments, there was a desire for a final meeting to review feedback from the forums and from social media. There were questions about the Prairie Dog legislation (HB1066), he said, and now that has become a reality. He said the packet distributed to members contains information on the bill and its background. He shared a culmination of options, he said, and put the options in three buckets – financial, administrative and transparency. Mr. Volk and Ms. Palm Connor also have lists of options to share, he said. He thanked Communications Department staff members Gregg Schildberger and Ty Filley who worked hard putting the survey together and producing the report.

Review and discuss survey report and HB 1066 Prairie Dog funding:
Ms. Palm Connor said her takeaway is the survey results appear opposite of the taskforce on nearly every question. Although not a complete surprise, she said, the public feels there should be a means other than special assessments for most of the infrastructure.

Mr. Volk said he has concerns about the low number of online responses, as he does not see that as a scientific way to capture data. The comment that “someone else should pay” is similar to “let’s not build a project” where the naysayers always show up in force, he said, so it is difficult to get the pulse of what the overall public is really thinking. He said he was disappointed in the low responses representing such a small percentage of the total population.

Mr. Dardis said West Fargo’s public engagement forums were similar. Although there were more responses and better attendance, there is a commonality, he said, and some of the residents who engaged had a specific issue to talk about and were angry about their assessment. He said it is a positive to have an opportunity for citizens to express that; however, one has to be careful how some of the public input comes in as an overall to what the community is thinking.

Mr. Goroski agreed; however, from his online searches for other communities that special assess like Fargo or North Dakota, he said he found there are not many out there. He said the public in those locations say the same thing as those in Fargo who responded, that specials are not the way to pay for roads. He said St. Paul switched recently and according to the newspaper, there was a major uproar. Nobody wants to pay for it that way, he said, and there are plenty of other ways to do it. Fargo needs to choose another way, he stated.

Mr. Bullis said it is time for the City to get out of the greenfield special assessment business. He said the data from the public bears it out and if the work of the taskforce over the last 12 months is going to amount to anything, a decision must be made to eliminate part of the problem. Specials are not the long-term solution, he said, and he feels taxpayers look at specials and all the add-ons, such as streetlights a mile away, never knowing what their assessments will be. He said now, in conjunction with the Prairie Dog fund, this is an opportunity to let people have some certainty their taxes are going to be just their general taxes and move on.

Mr. Hanson agreed the numbers are disappointing; however, there is a reason this taskforce was created. He said it would be a mistake not to come forth with some recommendations that have some significant changes as an option for the Commissioners to look at.

Commissioner Grindberg said the Prairie Dog legislation is a game changer as far as its impact on taxpayers. In his opinion, he said, applying those dollars to greenfields is not going to be a solution when looking at the history and benefit of a new development versus applying those dollars to existing neighborhoods and reconstruction. The idea today is to get to a list of substantive options, he stated.

Mr. Bullis said he was not suggesting using Prairie Dog funds for greenfield developments. He said the cord should be cut on financing developments and Prairie Dog money can be used for rehab and for arterials, allowing the ability to take away all these add-on special assessments.

Ms. Palm Connor said she feels the change would need to be done gradually over a period, due to the impact on current housing. She said she recommends getting out of noncritical infrastructure in new developments and focusing primarily on critical infrastructure - streets, curbs, sewer and water, and then figure out ways to transition out of it.

Mr. Volk said the Prairie Dog funds should not be considered the alternative to special assessments. There is no assurance those funds will be here forever, he said, and there needs to be a practice in place to manage that. He said as funding sources come and go, there is a need for a supplement practice or policy-managing infrastructure financing that is pliable and works even if there is less funding from outside the region. While it is sweet it is here, he said, he is not convinced it is here forever and a practice or policy is needed that has some life to it regardless of the revenue streams.

Mr. Cosgriff said when people say we need to get rid of specials the question that needs to be asked is how do they want to pay for it and the answer is they don’t. It is easy to be against special assessments when the replacement for those dollars is that somebody else pays, he said. In a real discussion with homeowners about how they want to pay, it becomes synonymous that doing away with specials means there is no cost to the homeowner, which is fallacy, he said, streets and infrastructure have to be paid for. He said he sees this as a financing discussion about how streets and infrastructure are paid for and this group has looked at ways to pull down costs, which is what drives what special assessments will be. It is not going away, he said, there will always be a need for repairs and maintenance. Special assessments are the best way to pay, he stated, due to the law requiring a direct connection between the property paying the special assessment and the improvement. That connection will leave if financing is moved to other things and he would prefer to see a very specific connection, he said. The need to educate is continuous, he said, and people need to be told the cost of the infrastructure.

Mr. Dabbert said it is a bit of a false notion that other areas of the country do not have some form of financing mechanism. He said it is just by a different name, whether it is an impact fee or another form of assessment paid by the developer or homeowner. He said he agrees with Mr. Cosgriff’s statement that at some point, someone has to pay the bill. There is room for improvement to make some big impacts and find cost sharing with the City for arterials and other things, he said. A homeowner expects to have to pay for the street in front of their home in some fashion, he said; however, they have heartburn over paying for streetlights a half mile away or if they are in the middle of a section, paying for half of a north/south and half of an east/west street. He said if this could get to a point where there is some other form of financing, of cost sharing not borne directly by that property owner in that section, that would be a happy compromise. He said then he could feel comfortable and confident the taskforce made some significant changes.

Ms. Fremstad said she is curious about arterial roads and how Prairie Dog funds could help or whether that is going to change. She said she is concerned when it is said today it will change things, it may not tomorrow. She said she is concerned about the impacts arterial road assessments have on residents all over the City.

Commissioner Grindberg said he and Commissioner Strand had a conversation with former Fargo Finance Director Mark Thelen for his perspective and when discussing arterials, Mr. Thelen was passionate that greenfields help level the playing field. Arterials will resonate high at the City Commission level and on staff development moving forward with policy recommendations, he stated.

Ms. Fremstad said she does not understand how a recommendation can be made without knowing financing on the backside. A percentage or a mechanism to pay for those arterial roads needs to be brought forward, she said, not just a statement that it needs to be changed.

City Engineer Brenda Derrig said staff hopes the taskforce will give them some high-level goals and items to work on and try to reduce. She said staff will look at the four-year Capital Improvement Plan (CIP) and the financial impact on different scenarios for arterials. She would like to see goals set on what could be done, she said, then go to the Commission, after which staff could get to work on details. She said it would be a long process if staff is told the need is to re-evaluate how arterials are done. They would go back and look, give a timeline for when ideas would be available and do runs on examples to understand the financial impact, she said, then the Commission would have to decide if it could be done financially.

Mr. Dardis said from his involvement with the Prairie Dog bill he would emphasize that it is important the recipients are good stewards of the money. There is a simple report of 10 items allowed, he said; however, decisions on how the money is spent must be meaningful on how it will affect taxpayers or, in his opinion, funds will not be available in another biennium. He said talk of a general levy might not be viewed well; however, getting into specifics of what a city takes over versus what taxpayers are paying will be significant. He said he has visited with Bismarck Mayor Steve Bakken who had questions about Fargo and West Fargo discussions on special assessments. He said the City of Bismarck is working on a monthly fee concept with approval from the Legislature to study as a pilot.

In response to a question from Mr. Busek asking if there is feedback on how Bismarck’s monthly fees are going, Mr. Dardis said there has been pushback with the differential between the monthly fee and those still being special assessed. The largest benefactor of the Prairie Dog bill is Fargo, he said, and the second largest is Bismarck. He said West Fargo is third because of the growth factors used as multipliers. He said Bismarck does not have a total conclusion, although they like the idea and apparently, public engagement has been positive. West Fargo used the monthly payment fee as an example in its public forums, he said; however, the citizens said a resounding “no” to that idea. At that time, the number Bismarck had, looking at their population base, was $25.00/month, he said.

Finance Director Kent Costin said communication has to be discussed. He said it will be important to lead the taxpayer along the process by telling them where things started, give them information about the project and then take them from gross cost minus City contribution and minus Prairie Dog contribution. Then, he said, show them the spread to all the people in the district, showing there are X number of parcels, therefore their share is X amount of dollars. He said the taxpayer will understand better what is being accomplished with the project. Perhaps it needs to be more graphic than sharing information with only text, he said; taxpayers can be directed to a website for clear information on how the process works. Currently, the whole story is not being told when the arduous process is being handed off to the taxpayer, he said, so it is no surprise they are confused and upset when they do not have all the information to discern what is being asked of them. He said this process would create more transparency and understanding in telling the story from the time a project is authorized and the expected cost minus funding sources. Several sessions ago, he said, when the Legislature adopted the 12% property tax buy down, they were adamant that the impact was shown on tax statements, which was significant in creating clear understanding. The consolidated notices of tax hearings has also helped with better communication about tax policy and how tax levys are set, he said.

In response to a question from Mr. Goroski on where the City share comes from, Mr. Costin said it comes from utility funds, water/wastewater rate revenue or sales tax revenue. He said there typically is not any property tax money in the City share. He said it would be a tremendous help to incorporate the data that has been pulled together through the process and to share that with the taxpayer.

Mr. Dabbert said that is a step in the right direction; however, whether an assessment is $5.00 or $5,000.00, the fact the taxpayer is getting another assessment in the mail contributes to special assessment fatigue. He said he hopes some means could be found to separate what is truly local and what is more arterial or collector.

In response to a question from Ms. Fremstad about whether staff expects the taskforce to give an idea of where percentages should fall, such as the 70/30 that exists, Mr. Costin said, while they would like the opportunity to study any departure or changes, staff is not interjecting ideas due to policy setting by the City Commission.

Commissioner Grindberg said illustrations were presented at the public forums showing percentages of 50/50, 70/30 and 60/20/20 on a typical reconstruction. He said Prairie Dog funds will be $25 million per biennium so the impacts of, for example, critical infrastructure only in greenfields and the impact and reduction of the burden to taxpayers by arterials for traffic lights for example, raises questions whether 70/30 is acceptable and does it all go to arterials or is it a blend. He said staff will have to look at some of these “what ifs” and how it will impact the overall scheme of things.

Mr. Volk said he would suggest that Prairie Dog funds pay the first percentage of a project and the rest of the funding follows current policy. As an example, he said, if it is 70/30, it is 70/30 of the non-Prairie Dog funds. He said Prairie Dog funds should be used to take off the top percentage and then if those funds go up and down, the rest balances and the ratios are built into policy. It would be carved out in a different order, he said, so the change is not so dramatic to the homeowner. The other concern, he said, is that when looking at the list of 10 types of projects, only three of them are special assessed in Fargo, which makes it more complicated. He said the first discussion would be to what type of project are the Prairie Dog funds applied.

Mr. Bullis said his initial reaction to that concept is that is a City Commission decision, not the taskforce, and he does not like using the funds for a specific project, especially rehab since 70% is already paid from other taxpayer funds. He said the idea of at least using it for arterials gives the entire City the benefit. If the funds are around only three years, he said, then only those people will benefit and if it is gone, it will be difficult to determine if there was a City benefit or if it was just the luck of the draw and he would hate to benefit some taxpayers just because of timing and where they came up in the rehab process. He said he feels there will be more state money if it is spent wisely. He likes the idea of stopping assessing things such as arterials and streetlights and let the City staff figure out how to finance those, he said. The taskforce is for recommendations and he would say, due to taxpayer fatigue, for now, quit using specials for streetlights and add-ons that no one likes.

Mr. Goroski said the sales tax on the books today is split between sewer, water and streets and he pointed out that sewer and water are direct results to property, no different from electricity or gas lines. Power companies do not ask for specials to maintain infrastructure for their equipment, he said, so why does the City do it for water and sewer? He said it should be part of the bill; it is a service charge to maintain service to a property. If that were taken off the table completely and put in the bill for water and sewer, as is done for electricity or gas, he said, there would be another $7 million to help continue to reduce or remove those things being discussed for roads. He said it goes back to what Commissioner Gehrig said at the beginning; there is money there from the sales tax that could be used for the streets if another way were found to cover the bill for water and sewer. He said he feels that needs to be looked at as a good option.

Mr. Costin said from a historical perspective the allocation method has always been used to create accountability, sustainability and the ability to do long term planning for municipal utilities. There are 20-year capital plans, he said, and either rate revenue or sales tax revenue is needed and some of that is planned out over a long horizon. He said in some cases some sales tax might be obligated to debt instruments at this point; therefore, while what Mr. Goroski says is true that percentages and allocations of sales tax can be moved, the City has been steadfast in holding them constant. He said an arbitrary shift each year in budgeting is problematic and he would caution that money cannot be spent twice; if it has been already pledged for long-term debt instruments, it cannot be spent or moved, otherwise another funding source will need to be found.

Commissioner Grindberg said a clean slate moving forward is a great discussion; however, the debt already on the books is where it gets complicated. He said if a fee can be started and everything is whole at day one, it may not even be plausible with a $25.00 a month proposal.

Mr. Cosgriff said the comparison of electrical connection to water utility is fair and staff could put together a model to see what kind of fee would need to be charged; however, people do not want to see an absolute increase in monthly costs. Utility fees would have to be increased by X dollars a month to replace those special assessed dollars, he said, and that opens up its own problems with people on fixed incomes. He said if going down that road, some very complex situations would need to be unwound. Dealing with the underlying debt and outstanding bonds against the special assessments will be difficult, he stated, and there is the situation of unfairness to those who have paid off or paid down their special assessments. To make that fair, he said, if switching to a fee-based replacement and repair bill system, he feels the City would have to buy that infrastructure back from the individual property owners who actually own part of the system. He said the City would have to ask developers with outstanding special assessments for greenfields to refinance those and pay back the City, which could have some dramatic changes. He said the taskforce could put forth those things that were agreed on to the City Commission, saying the group did make a decision to move the information with the recommendations to consider in working forward.

Commissioner Grindberg said roughly a third of single-family homes in Fargo have their specials paid off and if there were an across the board fee, those taxpayers would have another fee on top of what they have already paid.

Mr. Goroski said that is making an assumption the fee is for things in the past. He said the fee would be for things going forward and it is to keep the homeowner from getting another $25,000.00 assessment 10 years from now.

Discussion on options to advance to City Commission:
Gloria Palm Connor recommendations:
1) Greenfields
a) Limit city assessments to critical infrastructure
i) Streets, curb, gutter, sewer and water
b) Developers responsible for noncritical infrastructure
c) Arterial streets
i) Cap residents along arterial streets to similar costs for local and collector streets
ii) Balance paid by Prairie Dog funding and/or other funding
(1) Utility fee, sales tax
d) Establish special assessment caps for current residents in area
2) Rehab/reconstruction infrastructure
a) Arterial streets
i) Cap residents along arterial streets similar to costs to local and collector streets
ii) Balance paid by Prairie Dog funding
b) Local and collector streets
i) Continue 70/30 special assessments
Administrative and financial
1) Stop collecting special assessments when bonds are retired
2) Pass along interest savings to residents from bond refinancing
3) Establish income-based reductions similar to property tax reductions for residents on a fixed income
4) Ensure Prairie Dog funds will be used for City infrastructure and not for FM Diversion

Mr. Volk said item 1c is an example where the City is growing out into an area that has existing homes without City services and as they start to get those services they are assessed. He said in those cases there can be challenging site conditions creating unique costs such as sewer coming in the back rather than the front as in new subdivisions. He said that also leads to the question of what is fair and who should pay. He said a cap might be different from a typical greenfield subdivision.

Mr. Bullis said item 1b takes care of many issues, having residents pay something and using Prairie Dog funding for the rest, which could eliminate most issues seen with homeowners when new developments have come in. He said those homeowners are not assessed for the local infrastructures; it is when arterials are dragged out there can be problems with the process. When limiting greenfields to critical infrastructure, he said, he looks at it from the perspective of whether it is City required infrastructure or just critical. He said his idea of critical is different than the City’s and if greenfields continue, it would need to be on any City-required infrastructure. If the City requires six-foot sidewalks to connect from point A to point B, or maybe expensive streetlights, he may not feel it is critical but it may be critical to the City’s maintenance down the road.

Jeff Volk recommendations
Reduce/control amounts assessed to property owners
1) Only assess projects that construct, rehab or reconstruct public infrastructure that the City is responsible to maintain
a. Streets
b. Sanitary sewer collection
c. Water distribution
d. Storm water management
e. Sidewalks
f. Flood control
2) Allowance for City fee add-on to project costs
a. Engineering services
i. Original construction - 10% of construction or actual cost if contracted
ii. Rehab or reconstruction – 11% of construction or actual cost if contracted
b. Administrative - 5% of construction
3) Project funding sources
a. Original construction/greenfields
i. Local streets - 100% special assessed
ii. Collector streets - 60% special assessed and 40% other infrastructure funds
iii. Arterial streets - 30% special assessed and 70% other infrastructure funds
b. Rehab or reconstruction/brownfields
iv. Local streets - 50% special assessed and 50% other infrastructure funds
v. Collector streets - 30% special assessed and 70% other infrastructure funds
vi. Arterial streets - 15% special assessed and 85% other infrastructure funds
Administrative financial management
1) Bond interest add-on to manage repayment risk
a. Original construction - 1.50%
b. Rehab or reconstruction – 0.75%
2) Pass any interest savings from bond refinancing on to property owners
3) Stop collecting when special assessment sinking fund can retire bonds
1) Promote existing special assessment assistance program for low income property owners
2) Hire a communications consulting firm to review the current communications plan for special assessment projects and develop alternatives and recommendations for special assessment communications with the public

Mr. Volk said the challenge is defining what is a reasonable assessment is. He stressed the importance of communication and education of the public on why assessments are a good thing. His attempt with his summary of options, he said, was to put it into pieces where not one is dependent on the other.

Mr. Hanson said details of options is a good place to start rather than generalities. He said one thing he sees different with greenfields assessments is that homeowners want it to be one time, not one year assessed this amount and then in two years another assessment. He said it has to get to a point where when someone buys a property they know all of the costs. It will take forward thinking to avoid surprises, he said, and he would still like to see at least an option for rehab and reconstruction to look at a monthly fee. He gave the example of homeowners insurance, which is purchased because no one wants the surprise of the price to repair damage to their house. When it comes to street maintenance, he said, everyone knows it is going to happen, it is just a matter of when and how will it be financed. He likes the monthly fee option, he said, and while there is a question of how to migrate to that, he envisions a waiver credit based on specials assessed over time that could be part of a formula. He said the fee option should be one option of several that the Commissioners can debate.

In response to a question from Mr. Bullis on the proposal of 1% bond interest and whether the difference would reduce outstanding specials in the end if there were no default on a greenfield project, Mr. Volk said the extra goes into a sinking fund. He said that fund is getting larger faster than the bond payments and what he is saying is that the 1% came from those homeowners and if collection is stopped when the bonds are paid off, the benefit goes to the lots. He said the math would never work to go back to the person who paid the extra percent year one. A 25-year bond may be paid off in 23 years, he said, and he suggests the money be paid for that project, not for specials across the board.

Mr. Bullis said he would go on record saying he agrees with Mr. Volk.

Commissioner Grindberg recommendations:
I. Administrative
1. Create a long term CIP with project level details and publish on website
2. Send letter to citizens about next year’s CIP, allowing lead-time for citizens to know
3. Adopt a CIP policy that locks down planned projects and provides a way to amend/replace approved projects
4. Shift LOMAR costs to developer to lower parcel costs included in specials
5. Establish annual project bid deadlines
II. Transparency/communication
1. Expand notice creation and notice of assessment documents/disclosure
with all costs and sources of payment
2. Create annual Realtor Association notice/report
3. Consider creating a direct project link to map and assessment
4. Expand or reinvent special assessments website
5. Voluntary text sign up for assessment notices including PDF files – play to mobile shift
6. Expand data on notice to provide total estimated project costs, grant funding, City funding, net project costs and include number of parcels in district
7. Show total net assessment at parcel level, annual certified amount and the monthly payment to fund certified amount
8. Create an age of infrastructure heat map and post on City website
9. Include notice of state homestead credit for special assessments and City’s special assessment assistance policy
III. Financial
1. Reduce bond markup from 1% to .75%, charge bond closing expenditures as project costs
2. Pass along a refinanced interest rate for bond issues to property owners – NDCC
departure, take this up locally using City’s Home Rule Charter
3. Bond debt residuals – keep same process, amounts are de minimis at parcel level
4. Amortization of specials to original term
5. Adopt Single Resolution Financing as primary financing for reconstruction projects (not discussed publically or with the taskforce, preliminary discussions at staff level, will produce a 2% loan with large capacity)
6. Reduce City fees charged directly to projects (6% to 4%), replace with another revenue source (sales tax or transfers)
7. Prairie Dog funding will supplement infrastructure funding policy by % or by project as needed for reconstruction of arterials
8. Include an index for project caps so the City maintains its fiscal margin policy to offset inflation impacts over time
9. Bond fluctuating interest rate savings

Commissioner Grindberg said he recommends the suggestions from all of the members be combined into one document and once blended, the document will be distributed and staff will be allowed some time to come up with solutions, which should be approved with an amendment to the infrastructure policy by the end of September. The 2020 operating budget must be approved by October 1st, he said, so when the 2020 budget is approved, so will the special assessment infrastructure policy.

Mayor Mahoney thanked the taskforce members for all of their hard work. The financial ramifications of some of the options need to be examined, he said, and some things can easily be done and some are open to debate. Prairie Dog funding will make an impact, he said; however, there is a challenge in how to do it fairly, with arterials a big issue. To go from 1% to .75% is probably doable, he said, since there are not a lot of defaults. He said the hard work done by the taskforce will help the City shape different ideas.

Commissioner Grindberg said the Legislature might visit this again, particularly with the pilot going on in Bismarck and changes in legislation that could allow more latitude. He said this would be ongoing with potential additional state resources. He said while there are political boundaries between Fargo and West Fargo, for all practical purposes the two communities are one and he stressed how important it is that the decisions made in Fargo sync with West Fargo for a common policy.

Mr. Cosgriff said as the two communities have grown the majority of people think of it as one community, even though the cities are governed differently. He said perhaps there is a private sector solution to special assessments and there may be other creative solutions, such as paying off specials with a home equity line of credit. He said in order to not confuse the public more, finding commonality between the two communities would be a good idea.

Mr. Hanson said it is important to have similarity. A lender in most cases is responsible for collecting monthly for the taxes for individuals and to have differences in the two communities would be difficult, he stated.

Mr. Dardis said he appreciates the comments on having the two communities be together. However, there is a difference on the economy of scale, he said, and he would like very much to have the same amount of sales tax money as the City of Fargo. He said Fargo is able to take dollars from sales tax and use it as a revenue source to buy things down while West Fargo does not have that luxury; there is about $10 million of sales tax dollars available each year that is not committed. He said West Fargo will do all it can to be a good neighbor and he has been amazed during his year in office in the amount of meetings that Fargo and West Fargo staff have together. He said that is extremely positive and Fargo has been a great team player. He said he will do all in his power to see that the two cities work as one when dealing with this very important issue.

Mr. Volk said at the high levels the two communities should be even on whether to assess or not, although some aspects, such as different cost shares and ratios, may not be so important. He said methodology may be similar; however, the cities have to do their own math and the pace of infrastructure replacement is different between West Fargo and Fargo.

Commissioner Grindberg said the recommendations will be combined and distributed to taskforce members who will be kept up to date as staff works through it. He said the recommendations will be shared as it moves forward with final determination at the City Commission level.

Additional Comments:
Mr. Volk said he disagrees with the issue of annual project bid deadlines and he feels the challenge is completion dates. He said he thinks that is a bigger driver of cost than the start date. If there are unreasonable completion dates, he said, the cost goes up.

Mr. Bullis said he would agree with Mr. Volk about the option of establishing annual bid deadlines, staff does a good job in establishing bid deadlines and are fully capable. In his experience, he has had good success working with City staff with rebidding and adjusting deadlines and staff does not need taskforce input in that regard.

Mr. Volk said the option of creating an age of infrastructure heat map is interesting and he wonders what the result of real estate values would be if such a map was published. It could result in real estate values going down in the hotspots, he said, which speaks to why assessments are the right answer because it goes directly to the quality of the infrastructure which drives the value of the property. As infrastructure is improved, value goes up, he said. It would be an interesting map, he said; however, there could be a negative outcome and it could be challenging for those who own lots in those hotspots.

Ms. Palm Connor said she did not know if a heat map would be a good idea due to the risk to homeowners in those areas. In her opinion, she said, providing a heat map of where properties are going to be special assessed would affect homeowners in those areas more than benefit them.

Mr. Goroski said if the property is assessed accordingly, it may benefit the homeowner due to the fact that their property taxes may go down. There is always a flip side, he said, and the City cannot be afraid to change. He said he has heard all along at these meetings that everyone is afraid to change; however, there has to be change at some point.

Commissioner Grindberg said the heat maps would provide transparency and sync with CIP plans, so there is awareness of the aging infrastructure and plans of the City to address it.

Mr. Cosgriff said a heat map already exists; it is the age of the homes. He said buyers who are paying attention would understand. He said it might have an impact; however, it will help staff in doing a long-range improvement plan showing where special assessments are coming. With special assessments, where the benefit ties to the property, he said, upgrading infrastructure in the house would reflect in the price of the house just like a new roof, furnace or driveway replacement. He said the more information, the better and let the market adjust to it.

Mr. Volk said he has concerns about a potential negative outcome; however, it helps explain why the quality of infrastructure is a direct relationship to the value of the property. There is a connection, he said, and that is why special assessments work so well.

Mr. Bullis said if there were a heat map and later there is a need to replace infrastructure in an area not on that map, property owners could claim they relied on the heat map and therefore the City should give them tax relief. He said there could be some unintended consequences to providing that type of information.

Commissioner Grindberg thanked the taskforce members for their participation. He said there would be substantial changes due to their efforts.

Ms. Palm Connor moved to adjourn. Second by Mr. Hanson. There was unanimous approval by all members present.

Time at adjournment was 9:00 a.m.