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City to issue $19 million in refunds

By Staff | Feb 26, 2013

Cape Coral will be closing the books on about 54,000 accounts associated with the legacy utilities assessment areas from the 1990s.

The city will issue refunds of the remaining cash balance in each account to current property owners. The estimated total amount to be refunded from nine assessment areas is about $19 million, according to a statement released by city information manager Connie Barron.

“The project costs ended up being less than what the property owners paid,”

Barron said. “A lot of people finance their assessments and these were financed for 18 years, since 1995.”

Barron did not know Tuesday the size of the refund each property owner would receive. “That will be in the information that comes forward in the resolutions,” she said.

Councilmember Marty McClain estimated the total amount averaged out could come to $350.

McClain said he wasn’t too surprised about the refund, only that it went back all those years.

“Once the project is fully funded, there are checks and balances that take place, and whatever is left is your refund,” McClain said. “Between the early 1990s to early 2000s, there were a lot of projects from the UEP that got put in costing hundreds of millions of dollars.”

Three of the larger projects ended last year: Green Wastewater, Striped Green Wastewater and Orange Water and Wastewater. These three project areas, along with a fourth project (Orange Irrigation), represent more than 96 percent of the total refund balance.

“We are preparing the appropriate final resolutions for City Council authorization to issue these refunds,” said City Manager John Szerlag in a statement. “We expect the resolutions to be presented to Council by April, and all refunds to be issued by mid-June.”

So where has the $19 million been? McClain said it depends on how far back the project goes and the money received for the project.

“It’s been sitting there and it’s been utilized, you get a rebate when those accounts have a surplus,” McClain said. “We knew the money was there. It wasn’t as if we on council didn’t know the refunds were coming.”

Refunds will be issued to the current property owner of record and not to any prior owner of the property. The current owner will receive the refund because the added value of a city utilities project stays with the property.

The cost of the project is assessed on the benefited property and not a particular property owner. All refund amounts will include any interest earned over the period of the loans less administrative costs to issue the refunds.

These legacy assessments were the result of one of the largest utilities expansion efforts in Cape Coral. In the 1990s, utilities construction encompassed most of the developed city (southeast Cape) as areas received water, sewer and/or irrigation lines and new roads.

“It is important to point out that the city used a different project delivery method and financing plan with these older projects in the 1990s, which resulted in larger balances at the end of the loan,” added Szerlag. “We do not expect this to occur on the same level with any recently completed projects in the southwest Cape or any subsequent projects and assessments in the city.”

The exact refund amount will not be finalized until the resolutions are adopted by City Council.

The following list shows the legacy areas and estimated balances to be refunded:

Area Balance

Green Water & Irrigation $ 238,000

Blue Irrigation $ 120,000

Diplomat Water $ 302,000

Santa Barbara Water $ 44,000

Trafalgar North Water $ 40,000

Orange Irrigation $3,300,000

Striped Green Wastewater$ 407,000

Green Wastewate $4,990,000

Orange Water & Wastewater $9,800,000