Road rash: Who pays to fix county blacktop?

CEDAR RAPIDS - Stuck in another time and place is an old country blacktop, now called 74th Street NE, which stands as a testament to what happens when a city barrels its way into the country.

Engulfing the busy street are new residential developments in every direction. They have concrete streets whose cost was factored into the price of the homes and condominiums. So who pays to turn lumpy, bumpy 74th Street NE into a city street?

The mile of road serves as an east-west connection between even busier north-south Council Street NE and C Avenue NE. It has no curbs, proper drainage or shoulders.

City officials and the City Council are crafting a formula by which all city taxpayers, not just those who live along 74th Street, will pay a share. The plan is to turn the 24-foot-wide, seal-coat country road into a 37-foot, concrete city street with curbs, gutters, storm water improvements, sidewalks and bike lanes.

The city decided to use citywide funds to pay two-thirds of the street cost, with those living along and near the street paying one-third via special assessments. Individual assessments would vary by location.

The project is slated for two phases at a total cost of $3.85 million. The city's initial proposal was to raise $711,000 of the $2.1 million first phase via special assessments, with a similar one-third percentage expected for the $1.75 million second phase.

Aaron Mishler and his family closed on the purchase of their new house at 1114 Deer Run Dr. NE on July 1 and then received a certified letter from the city informing them they would need to pay up to $1,870 as their share of the project.

“I think that's a lot to ask,” said Mishler, 36, an insurance claims adjuster.

He agrees 74th Street NE needs a major fix, but he argues the street is an arterial for the entire area, not just a street used primarily by the closest neighbors.

Michael Cimprich of 1132 Deer Run Dr. NE says the same. He said he uses 74th Street NE so rarely he didn't even attend the informational meeting about the city's plans. Then he learned of his assessment, which is close to $2,000.

“It's not fair to assess such a small area for such a large project,” said Cimprich, 26, an equipment operator for Marion.

Rob Davis, the city's engineering operations manager, said sorting out who should pay for a road improvement in a fast-developing part of the city requires a lot of work. He's done it a dozen or so times in the past five or six years.

Similar debate swirled around 33rd Avenue SW, he said.

Ideally, the timing of major street improvements would allow developers to pay the upfront cost and pass that on by rolling it into the price of homes in a special assessment area. The city's planning and budget capabilities, however, don't typically allow for that kind of timing. So developers don't factor the cost into home prices and just attach a caveat in the property deed for a possible future cost to the owner.

Putting the cost into the mortgage means it would be paid off over, say, 30 years at a relatively low interest rate. Instead, the special assessments come with a 10-year payback at higher interest rates.

“The thing that's a little frustrating is the city is not in the business of being a bank,” Davis said. “If (these costs) could be spread into the mortgage, people would never notice. … You wouldn't have any of that discussion.”

Abode Construction Inc. of Cedar Rapids is building homes to the north of 74th Street NE in the special assessment area. Hannah Kustes, vice president for the company, said Abode offered to pay for a portion of 74th Street NE so no special assessments would be required of homeowners. The city had not gotten far enough along on the project to know what the costs might be, though.

Factoring such costs into the price of the homes, she said, is a better way to handle such development costs.

“People don't expect those things to come up after the fact when you get stuck with another surprise bill,” she said.

Davis said the $711,000 that the city had sought for phase one likely will be reduced because Abode agreed to build a regional detention basin on part of its land at its cost. The basin is designed to retain stormwater runoff for an area larger than Abode's development.

The regional detention basin is benefiting the whole region, said Davis. So the city will pick up a bigger share of the 74th Street NE road improvement, he said.

Still, City Council member Tom Podzimek said projects like 74th Street NE should require special assessments to pay for a portion of the cost.

“If government is just going to hand out improved areas and nobody has to pay for them, let's do my street,” Podzimek said.

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