PLEASANT PRAIRIE — The Village Board last week cleared the way for a special assessment that will impact homeowners starting next year.
The board unanimously approved a resolution to authorize special assessments to finance the construction of stormwater improvements within the Chateau Eau Plaines Subdivision.
It’s expected the total assessed amount will be $865,220.31, with the remainder of the nearly $3 million project to be financed from various other village accounts.
A public hearing regarding the issue was held last month, and at that time, the resolution included a 9% interest rate, but was changed to no more than 2% higher than what the village would get to secure financing.
Village Administrator Nathan Thiel said the original 9% figure was based on prior policy and was never intended to be a competitive rate.
“The intent behind keeping it at a higher interest rate is the individuals are encouraged to go to their private lender, get a home equity loan and pay the village sooner so that portion of the project in and of itself isn’t financed,” he said.
“It fuels the fund quicker. Not everybody will do it, but the majority of individuals will go through the process of getting a home equity loan and paying for the project up front or in advance because there’s a higher interest rate.”
Thiel said it’s expected a new rate would be about 6%, given the average interest rate for most home equity loans.
Also included in the original motion was allowing the payment schedule to be pushed out an additional year. The full assessed amount will be payable by Oct. 21, 2022, and an installment plan that covers 10 years of equal payments will begin Jan. 31, 2023.
A new motion that was approved last week, directs village staff to issue debt for the project, but not limiting to just the assessed portion, which gives it the flexibility to look at issuing debt for the entire project, Thiel said.
“If staff wants to look at issuing debt for the entire project, I’m OK with that, as long as that wouldn’t be supported by an increase in the stormwater user charge that we’re maintaining,” Trustee Mike Pollocoff said.
“... My logic in this is to protect the reserves and make sure we assess the new users who are adding onto the system.”
Pollocoff added that if the assessed amount is used, the village would recoup those funds through payments by the affected homeowners. If the entire amount is financed, then the source of revenue becomes property taxes, increased fees or some other way to pay that debt back.
“I think we should do whatever is financially beneficial to us,” he said. “My initial inclination would be just to do the amount assessed. But if Nathan wants to take this to market and see what we can do, I’m not opposed to that.”
“If we’re going to go through the process of financing the project, if that’s the direction the board wants us to go, I just don’t want to restrict our ability to make the best choice or decision,” he said. “That’s why I wouldn’t restrict it just to the assessed amount.”
The average assessment for the project is $4,347, with a high assessment of $9,330.34 and a low of $688.53.
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