What is the Utility Extension Project?

This is the City’s Utility Master Plan that will extend collection and distribution systems to several areas presently served by shallow wells and septic systems.

Where has the latest extension of utility services occurred?

Southwest 4 is underway with anticipated substantial completion in December, 2007. The Southwest 5 Project is currently in the bidding phase. Upon City Council approval, construction is anticipated to commence in August or September of 2007.

Who will oversee the installation of the improvements?

The City has contracted with MWH Constructors, Inc. to provide construction management services.

When will the improvements start?

Construction on the SW4 project began in late June 2006 with estimated substantial completion by December of 2007. The contract completion is formally March of 2008.

The Southwest 5 Project is currently in the bidding phase (April/May 2007). Upon City Council approval, construction is anticipated to commence in August or September of 2007.

What is the assessment methodology?

Cape Coral City Council enacted Ordinance No. 8-99 on March 8, 1999, to provide for the creation of assessments areas and to authorize the special assessments that will fund the construction of certain utility improvements to benefit the properties within an extension project area. Essentially, this ordinance ensures that “growth pays for growth,” and that only properties which benefit from utility improvements pay the assessment.

In general, the City utilizes the “land area” method for calculating assessments whereby the parcel square footage is divided by 5,000 sq. ft to determine equivalent lots. For example, a 10,000 sq ft parcel would be 2.0 equivalent lots. There are some qualifying adjustments for hammerhead parcels. A rate is established per equivalent lot based upon the estimated costs of the project (GMP). The rate times the number of equivalent lots assigned to the parcel equals the assessment. For a more detailed explanation of the methodology used to calculate the assessments, please refer to the Assessment Methodology Paper prepared by Nabors, Giblin and Nickerson, P.A., which can be obtained from the City Clerk’s Office.

Are there other special assessment programs within the City of Cape Coral?

Yes, other special assessment programs include seawalls and sidewalks.

What will the utilities assessment proceed fund?

The assessments will fund all project costs associated with the collection/distribution portion of the extended utility systems that will provide water, irrigation and sewer services in the utility extension area.

Can the assessment proceeds be spent for other purposes?

No, by law, special assessment proceeds can only be used for the services or facilities for which they have been imposed.

When do we start paying the assessment for the current utility extension project?

There are three payment options available. If you do not participate in the Prepayment Option or the Deferred Assessment Option, you will automatically be placed in the Amortized Payment Option. No additional notice will be sent to you, and the first installment will automatically be on your next tax bill.

What is my assessment amount?

A public hearing notice containing the assessment amount to be levied on parcels located within the assessment boundary will be sent at least 20 days prior to the final public hearing to levy the assessments.

Beginning with the first tax bill after the assessment has been levied, each year, during August and September the account balance will be adjusted to reflect the amount sent to the Tax Collector to be billed on the Tax Bill. After your account has been updated, you will be able to view your payoff balance on the City’s Internet site. Please note that the payoff amount will include the remaining principal balance plus the amount forwarded to the Tax Collector for collection. The account is updated annually or when paid in full and does not reflect payment of the amount forwarded to the Tax Collector for collection. For those participating in the Deferred Assessment Option Program, your payoff balance will not be available on the City’s Internet site. Please call (239) 574-7722 for a payoff amount.
(To view account balance: http://ecape.capecoral.net/ )

If I participate in the Amortized Payment Option, will the annual installment be the same each year?

Not necessarily. Annual assessment amounts are based upon your share of the debt service for the bonds. You will be quoted a maximum annual amount. Generally, annual installments are less than the maximum annual amount and may vary slightly from year to year. However, you will not be billed more than the maximum annual amount.

If I participate in the Amortized Payment Option, can the annual installment be escrowed with my home mortgage payment?

Yes, if you make monthly payments that include an escrow for property taxes, then the non-ad valorem assessments will be added to the payment amount. You will probably be contacted by your escrow agent regarding the increase in the escrow amount. As soon as the assessment is approved, it is advisable that you contact your mortgage company or escrow agent as soon as possible after that to begin escrowing the annual installment that will be due.

Can I pay off an assessment?

Each utility extension project will provide for an initial prepayment period whereby payment in full is based on project costs only and does not include the cost to issue the financing instruments. The initial prepayment period for the Southwest 5 Project is from July 24, 2007 to October 31, 2007.

After the assessments have been levied, if you do not participate in the Initial Prepayment Option and default to the Amortized Payment Option, annual installments are calculated during the months of August and September each year. After July 31st benefited property owners may also pay off the imposed special assessment by paying the annual assessment amount included on the tax bill to the Lee County Tax Collector and the remaining principal balance of the assessment to the City of Cape Coral. Any one of all of the assessments may be paid in full. Upon payment in full of both the annual assessment (to the Lee County Tax Collector) and the remaining principal balance of the assessment (to the City of Cape Coral) the assessment will no longer appear on the tax bill.

If I sell the property and have not prepaid, do I have to pay the assessment?

If you participate in the Amortized Payment Option, you do not have to payoff the assessment if you sell the property. The assessment continues to be assessed against the property regardless of the owner. The assessment is imposed annually on the tax bill for the property. However, please note that some banks and other lending institutions may require payment in full.

If you participate in the Deferred Assessment Option and you sell your tax parcel or any portion thereof, refinance any debt secured in whole or part by your tax parcel, or transfer ownership of your tax parcel or any portion thereof to a third party (transfer to a trust owned by you for estate planning purposes will not constitute a transfer), payment in full of the principal balance, accrued interest and collection costs is due and payable to the City of Cape Coral. Failure to remit such amount will result in the City pursuing legal action, including possible foreclosure on your property. In addition, failure to inform any buyer or transferee of this program and your election of the Deferred Assessment Option might result in potential legal liability to the buyer or transferee.

If I participate in the Amortized Payment Option, what will happen if I do not pay the annual assessment?

Because the City is using the tax bill collection method, Florida law requires that all ad valorem assessments be paid at the same time. If you do not pay your taxes, which include the non-ad valorem assessments, a lien will be placed against your property equal in rank and dignity with the liens of all state, county and municipal taxes and special assessments. Failure to pay the assessments will cause a tax certificate to be issued against the property which may result in a loss of title.

What if I can’t pay the taxes and non-ad valorem assessments at one time?

The tax amounts and non-ad valorem assessment amounts are considered one bill due and payable to the Lee County Tax Collector. No partial payments are accepted by the Tax Collector once the bill has been issued.

If you would like to make installment payments prior to issuance of a tax bill, there is a quarterly installment program available through the Lee County Tax Collector’s office for the payment of taxes and non-ad valorem assessments. The Lee County Tax Collector’s office also has a deferral program available to certain homesteaded properties. You can contact them at (239) 533-6000.

I don’t pay taxes now due to homestead or other exemption. Will I have to pay the annual installment for the special assessment?

Yes, if you participate in the Amortized Payment Option. Special assessments are not taxes. The special assessment applies to all properties within an assessment area regardless of any tax exemptions. You will be sent a tax bill by the Lee County Tax Collector, but it will only include the non-ad valorem assessments.

I claim a deduction for property taxes on my income tax return each year. Can I claim a deduction for the non-ad valorem assessments?

This is a question for your tax advisor. Generally, a non-ad valorem assessment against a residence is not a valid income tax deduction. However, if you own rental property or a business, the non-ad valorem assessment may be deductible when computing your income taxes. Please contact your accountant or income tax preparer for information regarding your specific situation.

Why assessments rather than property taxes?

According to state statutes, cities only have the authority to impose taxes citywide and not within specific area of the City. In addition, assessments are a more equitable way of distributing the costs of the project to those who are benefiting. The property taxes you pay may only be used in operations of City government.

The special assessment for any Utility Extension Project may only be used for that specific project area.

By using special assessments as a funding tool, the City can: (1) determine which properties receive a benefit from the proposed improvements and (2) have those benefited property owners assist in funding the improvements in an amount proportionate to the benefit(s) received.

Why is the City using the tax bill collection method to collect the assessments?

Billing and collecting assessments on the annual property tax bill saves money for everyone by reducing the administrative costs of the program. Reducing collection costs benefits the property owners who pay on time. It also provides a stable revenue source with which to fund the utility system extension project.

Can vacant lots apply for the Deferred Assessment Option or does it just apply to houses?

All lots, vacant or developed quality for the Deferred Assessment Option. Please see the Financing Options pages for more detailed information.

If I participate in the Deferred Assessment Option, how much do I have to pay each year on the assessment?

The amount you pay is up to you. You can pay nothing, make a minimum partial payment or pay off the entire assessment. The City will establish a minimum payment amount, if you decide to make a payment. You can elect to pay as much or as little as you wish in addition to the minimum.

If I participate in the Deferred Assessment Option, will my payments be collected on my tax bill?

Payments will not be collected on the tax bill. The repayment of the debt is entirely your responsibility. You will receive a statement of your account every year, but making a payment will be up to you.

What is the term of the Deferred Assessment Option?

This option is available for only up to 20 years. The balance must be paid in full at the end of the 20-year period. Because the City is responsible for satisfying the bonds when they mature, failure to pay at the end of 20 years will result in the City initiating foreclosure proceedings.

Can I elect to use the Deferred Assessment Option and then at a later date elect to go back to the traditional financing option (Amortized Option)?

No, you may not. Once you select the Deferred Assessment Option, you cannot opt out and go back to traditional financing.

How does the City pay for the work associated with the extension project?

The property owners will pay assessments and impact fees.

How are the Projects financed?

The Utility Extension Projects will be financed in the short term by commercial paper and in the long term by bonds.

How and when do the homeowners pay for the assessments?

We will be utilizing an early billing program that will be run through the County Tax Collector. Owners will make their yearly payments with their tax bill.

When do we pay our impact fees?

Impact fees are due upon connection to the system. Undeveloped parcels will pay only after the property is developed.

Do we connect to the new lines after they are installed?

Yes, state law requires that anyone adjacent to these utilities to connect with the exception of the secondary (reuse irrigation) system. (For more detailed information, click here to see hook-up procedures under the Process tab on the home page.)

Do the existing wells and septic tanks need to be removed?

Septic tanks are required to be removed or abandoned but the wells can remain and be utilized for irrigation purposes if desired. (Click here for more details.)

What if I am a seasonal resident and am not here when the construction is completed. Do I need to make special arrangements with someone to accomplish the service connection?

Seasonal residents are encouraged to make arrangements to accomplish the service connection. This arrangement can be with a neighbor, friend, plumber etc. Please note developed properties have up to 6 months to hook-up to the system from the date of the Letter of Availability which is sent to owners by the City of Cape Coral.

I am building a new house in the construction area. Do I need to install a well and septic tank system if City utilities are coming?

A Waiver form is available at the City’s permit department. You may also check with the Utility Extension Team to plan the timing of construction with the estimated completion of any utility area. They can be reached at (239) 573-1191.