This ordinance was discussed at the March 28, 2022 City Council meeting.  At that meeting, Council requested that staff include a $250,000 direct cash taxpayer contribution to further buy down the cost to benefitting property owners within LID #322.  With this additional local taxpayer subsidy, the final cost of the improvements for the benefitting property owners is $697,734 out of the total project costs of $1,995,647.90, resulting in improved infrastructure to the benefitting properties at a cost of $0.35 on the dollar.

This proposed final assessment is 40% less than the original estimated assessments of $1,161,600 on property owners when the LID #322 was formed in July, 2019.  The original estimated total assessments of $1,161,600 included an assumption that the City of Hermiston taxpayers would buy down the actual estimated cost of $1,411,600 by $250,000 to help make the project more affordable for the property owners.

Based on considerable cost savings relative to the original estimate, and in consideration of taxpayer funded staff time to direct and over see the project in conjunction with other taxpayer funded improvements in other infrastructure benefitting property owners within the area, it was proposed, at the March 28, 2022 Council meeting to levy a final amount on the benefitting properties of $947,734.  That amount would not have included any direct cash contribution from City of Hermiston taxpayers.  That amount, however, would have still been 18% less than the original estimated assessments of $1,161,600 which had assumed that taxpayers had already contributed $250,000.

The attachments show how a taxpayer cash contribution of $250,000 is now included in the proposed assessments according to each property's share of the final costs.

The City constructed these improvements upfront.  Properties within the LID #322 area, by this ordinance, are each given the opportunity to repay the city in one lump sum, or in installments over 10 years.  This is standard practice, and had been used 321 times within the city before through 2004.  In order to protect the City's cashflow, an amount equal to that owed by those who choose to repay in installments will be borrowed by the City for 10 years at the most affordable rate available, with installment payments from the property owners going to cover that debt.

The additional $250,000 contribution to buy down the cost to property owners further will come from the City's General Fund.

1. Approve Ordinance #2338

2. Table Ordinance #2338

3. Reject Ordinance #2338