Guest post by the Summit Team
Dear Friends and Neighbors,
In response to the public interest in learning more about the proposed special assessment area Summit has been working through with Weber County, we welcome you all to come to an information session and Q & A at Pineview Lodge at 7pm tomorrow, Monday, March 25.
See below for an FAQ that addresses some initial questions, we'll be happy to discuss these and additional questions tomorrow. We hope to see you there!
What is an Assessment Bond and what are they used for?
Assessment Bonds are authorized pursuant to Title 11 Section 42 of the Utah State Code and are an excellent tool to use to finance public infrastructure as only the properties benefitted by the improvements are subject to the assessment. In the case of Summit Mountain Holding Group’s (SMHG) development at Powder Mountain, the burden of financing the main roads, sewer and water improvements will be placed solely on the units within the 1540 acre assessment area. The improvements being financed are public improvements, whose installation will be overseen by the County, and will be owned by the County and included in the County’s assets. It is due to this fact that the financing can be done on a tax-exempt basis through the issuance of municipal bonds even through the burden of repayment is placed on the limited number of properties described above.
How are Assessment Bonds supported? What is the security?
The payment of annual assessments is the revenue source that will be used to make the bond payments and, as such, the rating agencies deem these types of bonds as self-supporting debt. The real property being assessed are the security for the debt. A lien is place on the property being assessed and the lien is on parity with the regular property tax lien on that same property. Beneficially for the County, the assessment lien trumps all other liens that may now, or in the future, be placed against the property being assessed until the assessment relative to the property has been paid in full. Stated another way, the property is the security for the bonds— and the lien even stands in front of a first trust deed lien that is placed on any property by a mortgage company.
Does an Assessment Bond inhibit or impair the County’s ability to issue bonds for other projects?
Due to the fact that the assessment payments and specific real property being assessed serve as the repayment source, and the rating agencies deem these types of bonds as self supporting, the assessment debt in no way inhibits the County’s ability to issue other bonds for other projects or in using it’s cash to fund other capital facilities that it chooses.
Is the County pledging to raise property taxes or sales taxes?
The County is not pledging to raise property taxes in the County for repayment of the assessment bonds nor is it pledging sales taxes to repay the assessment bonds. The source of repayment is the assessment on the limited number of properties.
What does State law require regarding notice of a proposed Assessment Bond?
Given that the assessment is only placed on certain benefitted properties, the process to issue is not intended to involve the public at large but only those who are to be assessed. State law does require notice to be sent to those being assessed and provides the ability for those being assessed to protest the designation of the assessment area. Alternatively, if 100% of the property owners to be assessed acknowledge the typical standards for notice they can consent to waive these requirements.