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Benefit Districts are a financing and development tool whereby cities can issue general obligation bonds for construction of public improvements and assess the cost to properties that benefit. The bonds are then retired through payment of special assessments by these benefiting properties.
Benefit Districts are used by the city to assist in development of arterial roadways (usually associated with section line roads), water lines and sanitary sewers. It is the most responsible and fair method available to cities in Kansas to pay for the roads and infrastructure associated with new development. The method is designed to prevent established residents from paying for new roads in the city. Many citizens voice a message that new development must pay for itself. Benefit Districts are a tool used by almost every city in Johnson County and a majority of cities within the state of Kansas to ensure that the costs of new development are attributed to the development itself rather that he city as a whole.
With the number of roadway, sanitary sewers and water line improvements all over the City, if the City did not utilize benefit districts, either the improvements would not be improved, or the City's property taxes would be higher. Developers have the option to build the street in front of their land to meet City specifications, but in so doing, a hodge-podge of improvements would occur, and the roadway could be under construction at different times and cause much more disruption than the orderly process afforded by the creation and administration of Benefit Districts. The other method of paying for new development available to a developer is posting an excise fee. An excise fee sets an amount of money aside until the City is ready to improve the roadway. However, the payment of excise fees does not guarantee the timely improvement of infrastructure near new development. A benefit district will bypass the city's schedule of street improvements and allow for continued developer activity. Also, Benefit District may be spread over a ten year period, whereas Street Excise Tax shall be paid as a lump sum.
Ron Shaver, deputy city attorney
Curt Hanneman, senior accountant