The City utilizes a variety of funding sources including Federal Funds, Municipal State Aid (MSA) Funds, and local funds. Federal and MSA funds can only be spent on minor arterial and collector streets. The City uses these funds to offset or reduce special assessments and/or property tax funds spend on street projects. MSA funds are also used as a local match (20%) for Federal appropriations (80%) for larger projects with citywide benefits. Local funds include City-wide property tax collections and special assessments to properties in the benefiting areas.
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City policy strives to create equity among all property owners. On average, approximately 25 to 35% of street project costs are paid through special assessments. On average, approximately 65 to 75% of street project costs are paid through federal funds, MSA funds, and property taxes. Assessment rate is equal to the "assessable cost" of the project divided by the total number of assessable units benefited by the improvement. The assessable unit to be used for all surface improvements is the "frontage" of the property. Determination of property "frontage" (PDF).
The final assessment hearing is typically held after the project has been completed and all cost are known. Property owners will receive a final assessment letter stating the final assessment hearing date and payment options. The first assessment payment is due with property taxes the year following the final assessment hearing. Partial or full payment can be made after the final assessment hearing.
Federal and MSA funding is insufficient, limited to certain streets, and/or requires a local match (20%). The City does not maintain a capital improvement fund sufficient to "pay cash" for street projects. A "cash" fund for streets projects would likely more than double property taxes. The City bonds money to pay for street projects and state statute requires that at lest 20% of the project cost be special assessed.
It depends on the project parameters but typically: