Mike Martin doesn’t believe he should have to pay a $2,400 special tax bill for street and sidewalk work in front of his rental properties on North Sixth Street.
Martin, who rents two homes in a one-block stretch of the street where improvements have been made, was among three property owners who objected to the tax bills when they were tabled in December by the Columbia City Council until a decision is made on interest rates for paying off the assessments.
To cover his share of the $324,698 project, which includes repaving the road, adding sidewalks and upgrading sewers on North Sixth Street between Wilkes Boulevard and Hickman Avenue, Martin plans to increase rent $50 per month for two years.
The city is charging $15 for each foot of property abutting the street and will recoup $21,409, 6.6 percent, of the costs. Property owners have 10 years to pay, but the city begins charging 9 percent interest after 60 days.
Community Development Block Grants are funding $244,724 — about 75 percent — of the project and reducing the tax bills by one half, according to an October staff memo to the council.
The city needs the tax revenues to fund future projects, according to a memo to council members from City Finance Director Lori Fleming.
The interest rate for special tax bills would change under a proposal going before the council when it meets today at 7 p.m. on the fourth floor of the Daniel Boone Building. The proposed ordinance amendment would set the rate equal to the prime rate published in The Wall Street Journal on the day the council approves a certain project. (For example, it was 7.25 percent Monday.) The proposal would cap the interest at 9 percent.
For Martin, the prospect of a slight reduction in interest won’t affect his plans to raise rents. “When you’re dealing with low-income housing, you’re on a tight budget,” he said, adding that there’s a trade-off between paying the street tax or making improvements to the houses.
Jim Cornelison, who rents from Martin at 712 N. Sixth St., said he understands why the city is billing property owners but won’t be able to afford the extra rent and plans to move.
Pauline Stevens said she’s lived at 805 N. Sixth St. for three years and remembers the piles of mud and rubble that blocked her driveway for months. Stevens said she didn’t realize the city levied “special assessments” for such projects and thought her taxes already paid for it.
“From my understanding, the only reason for the raise is for us to pay for the street work ... and that’s not right,” Stevens said. “We’re still paying for everybody else’s street (through taxes). It’s not our fault ... the street needed to be repaired; that’s normal wear and tear.”
Delton Jacobs, who owns one house on the street with the Jacobs Group, believes the special tax bill makes sense. “We now have a higher value because of the improvement to the street,” Jacobs said. He doesn’t anticipate raising rent at this point, adding that the market will decide.
Pat Hemphill, who owns rental property at 809 N. Sixth St., also approves of what the city has done and said he has no intention of passing along the cost of the tax bill, which he plans on paying all at once.
“Every time I drive by, I say, ‘Thanks, city,’ ” he said.