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North 1 UEP assessment to be most costly ever

By CHUCK BALLARO - | Jan 19, 2023

Property owners in the pending phase of the city of Cape Coral’s Utility Expansion program will face the highest assessment and fee tally yet but will be given multiple options to pay over time.

The North 1 West UEP project will cost the city nearly a quarter-billion dollars ($249.6 million), which will be funded by bonds and paid by property owners

Owners of standard-size residential parcels are facing possible assessments and fees of $33,367 to $35,931, depending whether and when they pre-pay.

Connection costs and the cost of filling any existing septic system is not included.

For those who don’t pay upfront, the cost of the North 1 West UEP, including interest, could run into the six-figure range.

Officials, who previously weighed waiting but decided against even higher costs later, conceded the burden on those who will need to pay over time.

Mayor John Gunter, using the impact on a property owner who will need to finance and pay annually on their tax bill, said a resident in a $300,000 home may pay more for their share of the UEP than they pay in city taxes.

The city estimates that for those who choose to pay in full between March 2023 through Sept. 30, 2023, the assessments for a 10,000-square-foot lot in North 1 West will be $26,617 — $7,246 for water, $13,330 for sewer and $6,041 for irrigation.

The estimated Capacity Facility Expansion Charge is $6,750 — $1,106 for water, $3,390 for sewer and $2,254 for irrigation bring the total tally to $33,367.

For those who choose to pay in full between Oct. 1, 2023 through July 31, 2024, the assessments for a 10,000-square-foot lot in North 1 West will be $28,658 — $7,802 for water, $14,352 for sewer and $6,504 for irrigation.

The estimated Capacity Facility Expansion Charge is $7,273 — $1,196 for water, $3,650 for sewer and $2,427 for irrigation for a total tally of $35,931.

As proposed, property owners will have the option to pay annually over 20, 25 or 30 years, with the first bill coming in November 2024. This is a first, as before there was only a 20-year repayment option.

Over 20 years, homeowners would pay $4,365 per year ($363.75 per month) and $3,991 over 25 years, or $332.58 per month). Someone who chooses to pay over the default 30 years at $3,740 per year (nearly $311 per month) would pay $112,200 over the term of the loan.

By way of comparison, in 2013, South 6&7 cost $16,758 per EP and CFEC, and North 2 cost $19,382 per resident.

The interest rate is estimated at 6.5%.

The city also has a hardship program.

There are approximately 7,300 properties in North 1, which will be divided into West and East Service Areas.

Compared to the South 6&7 UEP nearly a decade ago, this project is expected to cost nearly double that.

North 1 will be broken into two parts, east and west, with Del Prado Boulevard serving as the border. North 1 West will be worked on first and is expected to cost about $249.6 million.

Much of the cost ($175.1 million will be utilities construction, with $11 million going toward facility construction and $28 million for storm drains, roads and fiber optics, a total of $214.1 million.

The rest will go toward construction contingency ($11.3 million, engineering ($12 million) and design, survey and administration ($12.2 million).

A good chunk of the funding ($116.3 million) will come from a line extension assessment (SF), while another $100.8 million will be funded through a Capital Facility Expansion Charge (CFEC).

Transportation ($16.2 million), Stormwater ($11.8 million) and Utility Fees ($4.5 million) will provide the remaining funding.

The city is seeking grants to possibly bring the costs down to property owners. The project received a $1.3 million grant from the South Florida Water Management District, Cooperative Funding Program, for irrigation distribution mains. There is potential to receive additional funds on the next grant cycle, officials said.

The city will use the same methodology as it did with the Southwest 6&7 and North 2 UEPs. The line extension will be based on the Equivalent Parcel (EP) method (1 EP = 10,000 square feet). This means those with oversize lots will pay more. The capital fee is based on the Equivalent Residential Unit (ERU) method.

To put the cost in context, the city adjusted for inflation.

According to the city, at today’s dollars, North 1 West will be the third most expensive UEP for residents. Southwest 4 in 2006 cost residents $35,136 in 2023 dollars ($20,428 in 2006) and Southwest 5 in 2007, $34,175 ($20,440 when built).

Southwest 6&7 was the least expensive at $23,396 today, $16,758 in 2013. North 2 was next at $24,223 in today’s dollars, $19,382 in 2017.

The public hearing for the Initial Assessment Resolution is set from Feb. 3, with a homeowner informational meeting to happen on March 8 at 6 p.m. at City Hall.

The public hearing for the Final Assessment Resolutions and Assessment Rolls and the resolutions to approve the construction and engineering and inspection contracts will be on March 22, with the notice to proceed expected in April.

Councilmember Tom Hayden said he didn’t want to wait until March 8 to inform residents about what they’re about to face.

“I just want us to be fully prepared for what we will face over the next several months,” Hayden said.

Mayor John Gunter liked the idea of the 30-year assessment, as it would help make it more affordable, though not enough for some, and that the city should tell residents in North 1 West what’s coming ASAP.

“We know the number. We know it’s coming. We know we will be inundated with phone calls. We need to get this information out, send them a notice about the meeting,” Gunter said. “There are people on a fixed income. We’re going to assess $3,700 a year on these households. It’s going to be catastrophic for some people.”

Mason added affected property owners will receive a packet as soon as council approves the resolution on Feb. 3.