The value of all outstanding LID assessments must be less than the actual value of the real property which includes the value of the proposed LID improvements thereon. The method used to determine the actual value of real property is determined by the city council and is final except in the presence of fraud or gross mistake. The normal method of assessing the actual value is to use the current assessed valuation of a specific parcel of property for ad valorem tax purposes as shown by the records of the Assessor of Madison County, Idaho.
Joint Powers (Idaho Code Section 50-1710)
The city may exercise LID powers jointly with other public agencies such as the Water and Waste Water departments. Improvements may be constructed jointly as part of another project or projects.
Call for Bids (Idaho Code Section 50-1710)
The city may purchase, construct, or otherwise acquire the improvements described by the LID. If improvements are to be constructed by city, the city must publish notice of advertisement for bids in the official newspaper for three consecutive weekly issues.
Once bids are received, they will be reviewed by both the Engineers and the City Council before awarding the contract to the lowest responsible bidder. The City Council must approve the bid by motion prior to awarding the Contract. The City reserves the right to reject any and all bids.
Interim Financing (Idaho Code Section 50-1722)
The city may choose to issue interim warrants to finance the cost of the improvements. The warrants are secured by assessments or bond proceeds, and are issued based upon the estimates of the engineer assigned to the LID.
Engineer’s Report (Idaho Code Section 50-1712)
After the contract for improvements has been awarded the engineer assigned to the project by the city will prepare a report of the total costs and expenses of the project. The report will also contain an assessment roll, or list of all properties to be assessed by the improvements, showing the amount chargeable to each property owner. If the engineer determines that deviations from the method of assessment determined by city council are necessary, the reason for such deviations will be detailed in the report.
Resolution Setting Hearing on Assessment Roll (Idaho Code Section 50-1713)
After the engineer’s report has been submitted to the council, the assessment roll will be filed with the city clerk at city hall where it will be available to the public. A council session to consider objections will also be scheduled at this time.
Notice of Hearing on Assessment Roll (Idaho Code Section 50-1713)
Notice of the hearing will be published in the official newspaper at least 15 days before the hearing is scheduled to occur. In addition, notice will be mailed to each property owner within the limits of the LID to the mailing address that is specified for property tax purposes, which is maintained by Madison County. The notice will also include the amount of the individual assessment as well as the time and date of the hearing where objections will be heard.
Hearing on Assessment Roll (Idaho Code Section 50-1714)
Owners of any property assessed on the assessment roll may file any objections to the assessment with the city clerk. During the hearing, the council will hear all such objections and determine if there are problems related to:
- The regularity of the proceedings in making such assessment,
- The correctness of such assessment,
- The amount levied on any particular lot or parcel of land, including the benefits accruing thereon and the proper proportionate share of the total cost of the improvements to be borne thereby, and
- The inclusion of any lot or parcel of land in the proposed LID.
If discrepancies in the assessment are recognized, the council has power to revise, correct, conform, or set aside any assessment and order any assessment be reevaluated. If any assessment is increased in an amount greater than 20% of the amount sent out in the hearing notice, a new notice will be sent out, and a new hearing will be held.
Ordinance Confirming Assessment Roll (Idaho Code Section 50-1715)
After the hearing the council will pass an ordinance confirming or rejecting the assessment roll. The ordinance is the final determination of the validity and correctness of the assessments and the amounts levied on each property.
The council may decide to make assessments payable by installment. If so, any resident owner with an assessment not paid in full at the end of a 30-day period (may be longer if determined to be necessary by the city council) from the adoption of the ordinance will be presumed to have chosen to pay the balance of the assessment in installments. The ordinance will describe the term, payment dates, and interest rate to which the installments will be subject. More frequent and smaller installments are good as they help to reduce the financial burden for some taxpayers.
Reassessments (Idaho Code Section 50-1720)
If any assessment is found to be invalid for any reason, council can make the required corrections and make reassessments.
Appeals (Idaho Code Section 50-1718)
Anyone who feels that their interests were not represented by the decision of the council confirming assessments may appeal to the district court within thirty days from the date of publication of the ordinance confirming the assessment roll. After thirty days, validity of the ordinance is conclusively presumed.
Notice of Assessments (Idaho Code Section 50-1716)
After the ordinance confirming the assessment roll is passed, a letter addressed to each property owning assessed will be sent. The letter will detail the total amount of the assessment and the terms of payment as described in the ordinance.
Failure by the city to give notice of the assessment does not affect the validity of the assessment, nor does it extend the time for payment. However, the city will be liable for damages sustained by any taxpayer because of such failure.
Lien of Assessments (Idaho Code Section 50-1721)
The assessments described in the ordinance confirming the assessment roll constitute liens on their respective properties. These liens are superior to all other liens. Properties with assessments that are not paid when due can be foreclosed upon and sold in a suit brought by the city.
Assessments are payable within thirty days of the assessment roll confirmation ordinance, unless council has provided for annual installment payments. An installment that is unpaid after twenty days from its due date is delinquent. Delinquent assessments are penalized by two percent, and charged a $0.25 certification fee.
Payments are calculated based on three variables: (PV) The assessments remaining balance, (i) the interest rate, and (N) the remaining term of the payment period. In most cases, payments (PMT) and interest are calculated annually as follows: PMT = PV/N = PV * i. If the assessment calls for monthly payments, that amount is divided by 12.
Example: I was just assessed $5,000 at 5.5% for the next 10 years. My payment will be payable monthly. What is my monthly payment for year 1?
PV = $5,000
i = 5.5%
N = 10
PMT = (5000/10+5000*5.5%)/12
PMT = (500+275)/12
PMT = $64.58
If a property owner currently paying in installments chooses to pay his assessment in full, he will be required to pay the full amount of the unpaid assessment, all penalties, all interest payable, plus the next year’s interest. Idaho state statute 50-1715 requires collection of the next year’s interest. This protects municipal corporations from being responsible for financing obligations made by the corporation on behalf the assessed taxpayer.
Example: The terms of my assessment are $10,000 principle at 5% interest for 10 years. It is currently the 1st day of the 7th month of year 4, and the unpaid balance of my assessment is $7,000. I have no penalties for late payment. To pay off my assessment in full I would owe: The current $7,000 unpaid balance of my assessment, the remaining $350 I owe in interest for the current year, plus $300 I will owe in interest next year for a total of $7,650.
Remedies for Delinquent Assessments
Several options are available to the city to resolve delinquent assessments. Council may certify delinquent assessments to the tax collector for collection as property taxes are collected. The city may foreclose on a property, or issue delinquency certificates and sell the property.