SID costs laid out for golf course residents

Alastair Baker
News Editor
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Photo by Alastair Baker
Examples of road conditions at the Red Lodge Country Club Estates.

The cost of a Special Improvement District (SID), to overhaul the roads at the Red Lodge Country Club Estates, is being estimated at $1,299,900. The cost will be split between residents and landowners residing in the specified area over the life of the SID Bond that could run from 15-20 years. 

The project will entail the area to be split into north and south with the division line running along Grizzly Circle. Those residing or owning land in the northern end will face a bill of $1,595.91 spread over semi annual payments at approximately $160 a year.  

In the southern end of the estates the amount will come to $1,940.16, approximately $200 a year with an approximate 5.2 percent interest added over the life of the bond.

There are 208 properties in the northern section and 467 properties in the southern section. 

Speaking at the announcement was Dan Semmens, a public finance partner with Dorsey & Whitney, who explained, “paying for roads is a continuous conundrum in the municipalities, just not in Montana. There isn’t a great funding source. There is a gas tax and other types of revenue but roads are always difficult, so it’s not unusual to finance roads through SID.”

SIDs are financing mechanisms, used to finance improvements with special local benefits to certain properties. A city creates an SID, with the costs of financing the project spread across all properties within the district. The city sells SID bonds and uses the proceeds to pay for the improvements and to fund a deposit to the city’s SID revolving fund and, as appropriate, a district reserve account. The city levies special assessments against all properties within the district, and uses the special assessment monies to pay debt service on the SID bonds.

Red Lodge Mayor Bill Larson told those in attendance that the City does not have funds to undertake this project and that the Resort Tax monies are “pretty well tapped out.”

Clay Cumming, chairman of the board of the Red Lodge Property Homeowners Association, said of the project “It’s a must do from our perspective. We will have gravel streets up there soon if we don’t do anything.”

The majority of residents at the meeting were in favor of the road improvements but were concerned that if the City proposes another SID to cover the cost of road or infrastructure elsewhere in the town that they would have to contribute financially.  They were told this would not happen as a SID only applies to the district concerned.

There were also questions about delinquent lots not paying into this but Semmens replied that “the lien of an SID is like a tax lien and the city can close it and they will use lose the property. It will not fall back on others who are paying.”

Another query focused on whether the SID would exceed the principle amount of the assessment that would either result in “no project as we can’t raise the assessment above the amount, or the City covers the difference. If so it wouldn’t be passed on to the tax payer,” said Semmens. 

Small Homeowners Associations that exist within the golf course and pay for their own private road maintenance will not be benefitting with this SID project but will have to contribute to the cost of the general road improvements as they do use the public road to get to their private road. 

Great West Engineering project manager Brandon Duffey explained the reason for the project outlining issues with the aging asphalt across the area. 

To this end the project has been broken up into north and south. The southern half is older with more block cracking, with the northern end in better condition. As a result there will be two different improvements, the south will receive scrub seal to help rejuvenate the asphalt, and once dry will be gone over with chip seal.  The northern part will only get the chip seal. Every road will have the crack seal. 

“You’re not getting a new road, just preserving the asphalt,” Duffey said. The maintenance industry standard is a 5-7 year life span on both the scrub and chip seal to maintain the flexibility of the asphalt so keeping that oil in it. 

Courtney Ellis an associate in the public finance department of  Dorsey & Whitney explained how the cost to the homeowner was assessed based on trip evaluations from each property or commercial outlet, with the latter covering more of the expense because of the higher traffic footprint. 

Once the SID is approved, construction is expected to take place from July –September this year. 

Property owners can protest any time within 15 days after the date of mailing and first publication of notice by the municipality. If protests are made by the owners of property in the district to be assessed for more than 50% of the cost of the proposed work, the city cannot proceed to create the SID at that time.

A tentative Schedule for creating the SID is April 24 the City Council adopts resolution of intention to create district and calls public hearing; May 3 mailing and first publication of notice (starts 15-day protest period); May 10 second publication of notice: May 18; Protest period ends at 5 p.m.; May 22: City Council holds public hearing, passes upon all protests and, if protests are insufficient, adopts the resolution creating the district.