Moorhead adopts use of special assessments for underpass project
The special assessment, which numerous residents and council members spoke against, will affect just over 3,300 lots in the nearby area.
MOORHEAD — Mayor Shelly Carlson and members of the Moorhead City Council on Monday, Sept. 26, gathered public opinions before adopting the use of special assessments to help fund the city's nearly complete underpass project.
The project altered up the alignment of Southeast Main Avenue and 20th and 21st streets to allow the roadways to go under the new railway.
The newly constructed wye track, which joins all three lines in one location, helps facilitate smoother railroad operations and prevent train backups.
When finished, there will be increased safety and less congestion in the area for vehicles, bicycles, pedestrians and emergency vehicles, according to Tom Trowbridge, assistant city engineer.
To pay for the project, Moorhead took out a $7.5 million bond to cover their portion of the cost, Trowbridge said. State statute requires that at least 20%, or $1.5 million, of the bond amount must utilize a special assessment. The other 80% ($6.5 million) of the bond will be paid through a general property tax levy that will be paid by all property taxpayers in the city, according to Trowbridge.
The total cost for the project is around $76.5 million, with the total specially assessed cost at roughly $1.5 million, Trowbridge said.
The assessment costs may be paid upfront by affected residents or spread out over 20 years, with an interest rate of 5.5%, Trowbridge said, adding it will be collected with property taxes.
For those with one acre or less, first year’s payment on the $439.60 assessment would be $46.15.
The assessment will affect just over 3,300 parcels in the nearby area, according to the assessment roll given to the Council.
Four residents who spoke at Monday's meeting expressed frustrations about the boundary.
“I think the city needs to do a citywide assessment on this underpass so that it's fair for the whole city,” said Susan Husel, a Moorhead resident of 55 years.
Residents have expressed that this additional special assessment will hurt them financially, Council member Heather Nesemeier said.
Prior to Monday's meeting, the engineering department received 131 calls, seven emails and four in-person visits to discuss the assessment, according to the City Council communication document.
A few council members expressed their desire to not specially assess projects in the future.
“This was the wrong way to go with this,” said Deb White, criticizing the Council's decision back in 2018 to choose a special assessment funding option, a Council largely comprised of different members at that time.
“(It’s the) most regressive way of raising money we have available to us," White said, noting special assessments don’t take income into consideration, only lot size.
Board members back in 2018 had similar misgivings about the special assessment route, wanting a city-wide assessment. The project, however, wouldn't allow for that delay.
In order to fund the project and avoid a special assessment, Moorhead would have had to place the issue on the ballot for a citywide vote prior to awarding the bid, according to Trowbridge.
Rejecting the project bid at that time would have resulted in added expenses, City Engineer Bob Zimmerman said in 2018.
The assessment boundary was hotly debated in 2018, with residents also calling for the entire city to be assessed to lower the cost for each person.
Expanding the boundary area, which was chosen to include properties who would benefit from the development, was not an opinion at that time, according to City Attorney John Shockley in 2018. Shockley said expansion would violate the city’s assessment policy and put the city at legal risk.
Collections for the special assessment will begin January of 2023. Residents may pay all the cost or a portion of the cost, with no interest on the amount paid by Nov. 15.
Those who seek a Hardship Deferral, delaying the special assessment on the basis of age, disability or military service, should contact the finance department, Trowbridge said.