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Resolution to Adopt Special Assessment Rate for Penn State Road and Scaup Duck Avenue Paving Municipal Service Benefit Unit
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BRIEF OVERVIEW
Pursuant to Florida Statutes, Sections 125.01 and 197.3632, the Department of Public Works received an application from a resident on Penn State Road in May 2022, requesting the creation of a road paving Municipal Service Benefit Unit (MSBU). The Board adopted Ordinance 2022-22 on October 25, 2022, creating the Penn State Road and Scaup Duck Avenue Paving MSBU.
In 2023, due to escalating construction costs, this MSBU project was consolidated with additional projects into a single bid package to solicit more competitive pricing. The estimate was updated to current market amount of $794,819.00. On October 10, 2023, the BOCC approved moving forward with bids.
Final construction was completed July 26, 2024, in the amount of $745,572.50 which is $49,246.00 less than the 2023 estimated cost. The MSBU benefiting property owners’ two-thirds construction cost share is $497,049.00. Property owners are also responsible for the engineering design, permitting, inspection and testing cost of $61,855.00 (which is capped at 10% of construction cost), as well as administrative overhead of $7,956.00. The assessment methodology is based on an equal per lot assessment with corner lots paying one-half assessment for each unimproved road. Three owners executed their Unity of Title option, resulting in fifty-two (52) assessable units.
Based on the property owners’ cost, the total up-front budget is $566,860.00, creating a one-time assessment of $10,902.00 per unit if paid (or post-marked) by May 9, 2025. Assessments not received by the deadline are automatically financed over a ten-year period at an estimated interest rate of 6.0%, creating an annualized budget of $81,656.00 and a per unit assessment rate of $1,650.00.
FINANCIAL IMPACT
Project cost of $815,383.00 was paid from:
Fund: 1013 - Constitutional Gas Tax, Department: 03211 - Debt Srv/Reserv-Const GF, Account: 5606308 - Improv-Road Assmt Project.
The County intends to reimburse itself for the expenditure of such revenues from a draw upon the County's line of credit upon the completion of the project, which amount of such draw shall equal the cost of the project less any payments made by residents. The MSBU will be funded by a non-ad valorem assessment on benefitting property owners' annual tax bill and paid from:
Fund: 7917 - State-Scaup Duck Pvg, Department: 09917 - Penn St Scaup Duck Paving, Account: 5910130 - Trnsf-Constitutaion Gas Tax which will reimburse the County for the property owners' cost sharing portion of $566,860.00 upon approval of the attached resolution levying the non-ad valorem assessment. The remaining 248,524.00 is the County's cost share for construction.
Revenue:
Fund: 7917 - Penn State-Scaup Duck Pvg; Account: 3252001 - Asmt-Srv-Non Ad Valorem; Amount: $81,656
Expense:
Fund: 7917 - Penn State-Scaup Duck Pvg; Dept: 09917 - Penn State Scaup Duck Paving; Accounts: Various
LEGAL NOTE
The Board has authority to act on this matter pursuant to Sections 125.01 and 197.3632, Florida Statutes, and Chapter 24, Hernando County Code of Ordinances.
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RECOMMENDATION
It is recommended that the Board approve implementing the Penn State Road and Scaup Duck Avenue Paving MSBU by authorizing the Chairman’s signature on the attached resolution. This resolution adopts the preliminary annual assessment rate of $1,650.00 per unit on the 2025 tax bill and approves the draw funds from the County's Line of Credit for $566,860.00 for a 10-year term.