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Do you suffer from math or mass confusion?
Hopefully, this article will provide numerical insight for the shared allocation of water and sewer installation costs between the City and a property owner. This will provide the possible tax revenue to be received.
While the following numbers are estimates on a hypothetical water/sewer project it makes clear that the allocation of expenses to the City and property owner would be easily estimated outside of the council environment. Also note the City expense of $17,500 would be more than covered by the owner property tax revenue of $22,500, and it would be advisable that the City Council approve this project.
What would be the estimated cost and revenue for the City for a water/sewer expansion of $350,000 to a property owner that spends $3 million on the facility? This article will assume three hydrant units will be needed, one lift station and two manholes.
Nebraska statute 18-405 states that cost assessments may be based upon property frontage or benefit received for both water and sewer projects. Engineer costs, legal fees and advertising can be included in the assessment to property owner.
The City's prior cost obligations had the following price ranges - water project includes hydrants ($3,500), sewer project includes man hole ($3,500), lift station ($120,000). Note: If the lift station is only for the end property owner, the total cost of the station can be assessed to the owner.
Total Estimated Project Cost: $350,000
City Cost: $10,500
Total City Cost: $17,500
Property Owner Estimated Assessment: $332,500
For this article, the project cost of $3 million is used. Since commercial property tax valuation equals 100 percent of market value, the taxable valuation is $3 million.
If the City levy rate is .75, the taxes received would be $22,500 annually.
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