Page 10 University Daily Kansan, September 17, 1982
City considers delinquent assessments
By DAN PARELMAN Staff Reporter
City officials and area businessmen are studying ways to collect $417,000 in special assessments that owners of lots in benefit districts owe Lawrence.
Beneft districts are housing developments that are partially financed by
Last year, the city had to raise property taxes by more than $200,000 to compensate for delinquent special assessments and next year will raise property taxes by $417,000 unpaid by December, Commissioner Tom Gleason said recently.
Both the city and businessmen are looking at ways to finance housing developments that would not allow them to access millions of money to remain delinquent.
Those who purchase lots in benefit districts pay special assessments to the city to finance tax-free obligation bonds (sometimes much as much as streets, sidewalks and sewers.
Specials, as they are called, have benefited the city, developers and realtors because they encourage development of housing projects at a lower cost to developers and homeowners not pay for improvements with bonds.
SPECIALS ARE the most powerful development tool the city has, said Allen Loyd, city management analyst. However, because realtors are not
selling houses, the system is not working as smoothly as the city would
When realtors or developers sell houses, their obligation as guarantors, owners of record, to pay specials is passed onto homeowners, who become the guarantors. But people are not buying many houses, so many specialists are not being paid. The city, meanwhile, has built streets, sidewalks and sewers in developments without houses.
Now the city wants to collect the specials owed it.
Commissioners Nancy Shontz, Don Binns and Gleason agreed that suing was an option the commission would consider.
Shontz said the city would have to use if it wanted to collect the money. Gleason said suing was the ultimate tool the commission could use if it agreed with those who owe money or pressuring them in paying falls.
ONE REASON WHY the commissioners want the delinquent specials to be paid now is that the city has had to reorganize the police department and obligation bonds in lieu of the specials.
ANY MILL INCREASE that property owners have to pay because developers have not paid their specials is too large an increase, Binns said.
Last year's $200,000 in additional property taxes translated into less than a one-fourth of one percent mill increase, said Vera Mercer, city clerk. A mill is $1 in taxes for every 1,000 of nonmoney value.
Stephens is a guarantor who said he had sold all the lots he owed specials on. Selling the lots did not free Stephens' obligation as the guarantor to pay the specials, although he may collect the money from those to whom he has sold lots.
"It do not think it's fair for one person to pay another one's bill," she said.
Shontz agreed.
Not only are realtors and developers causing property taxes to increase by not paying their specials, but Loyd said they were also running the risk of having the county foreclose on their lots.
City officials, the Lawrence Chamber of Commerce, realtors and developers are considering proposals that would make lot owners share with the city the movements or limit the number of lots that could be developed with specials.
ACADEMY
This many delinquent specials have accumulated because the commission has allowed virtually anyone to develop lots in benefit districts, said Sam Pishead, the co-guarantor for $99.091.34 as of July 2. Pishead works for Holmes, Peck and Brown Real Estate Inc., 802 Massachusetts St. He has sold some of the lots he owes money on.
If they do not pay, $188,000 worth of delinquent guarantors' lots stand to be foreclosed next year, Loyd said. The remainder of the lots could be foreclosed in two years if their specials remain unpaid.
Shipatead said he was not sure he wanted the commission to regulate the number of lots allowed to be developed as benefit districts. But he said that the commission and the developers could get together to discuss many benefit districts could be set up.
The chamber has been meeting with developers and with Loyd the past three weeks. The chamber will probably release a statement next week stating its proposals for the future of specials, Penney said. He said the chamber plans to present its views to the city commission by Oct. 5.
money, it still will have to contend with the possibility of future recessions and future delinquencies. So, at a meeting last month, the commission placed a moratorium on future specials until a new policy is established.
amount for property owners to pay,
said Robert Stephens, owner of Stephens Real Estate and Insurance, 2701 W. Sixth St.
A special plan now used in Wichita that discourages an unlimited amount of benefit districts has merit, said Bill Cohn, the vice president of community affairs.
If Lawrence adopts a plan similar to the Wichita plan, then the percentage of improvements developers pay for should be less than 30 percent to 35 percent, unless the city begins to pay for water lines, he said.
WICHTA REQUires its developers to pay 35 percent of improvements, then refends the money to the developers once they build 35 percent of their houses, Penney said. Wichita pays for underground water lines, something Lawrence developers pay for now, he said.
"Otherwise, you're going to limit the little guy and let the big guy do the development from his own pocket," Penney said.
Shontz has proposed a plan similar to the Wichita plan that would require developers to pay 30 percent of improvements. Developers also would have the option of planning before any improvements are made, according to Shontz's plan.
Loyd said making developers share the costs of benefit districts would reduce the city's risk but would cause the cost of mortgages to increase developers would pass the cost of financing improvements onto homeowners.
The city would ask the county to foreclose on the land, Binns said. And the county commission would be appointed Robert Neis, county commissioner.
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The International City Management Association last week gave Watson its first international Award in New York and foreign countries to use in Lawrence.
Lawrence City Manager Buford Watson has been honored by an international management association for his work in Lawrence.
Association honors work of Watson
The association said Watson toured England, the Netherlands and West Germany in 1976 as part of its European task force. Watson has taken ideas from his trip and used them in Lawrence, the association said.
Some of the things Watson saw in Europe and later helped to implement in Lawrence were a program for bike routes, a change in zoning of the downtown area to allow some rental units on the second and third floors of commercial buildings, efforts at historical preservation and a public sculpture in front of City Hall, the association said.
The award was given to Watson in honor of Orin F. Nolting, the association's former executive director.
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