Lansing City Council to set public hearing tonight on Montgomery Drain project

Taxpayers could be hit with $12 million bill

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MONDAY, Sept. 14 — The Lansing City Council moved one step closer tonight to issuing $12 million in tax assessments to residents that could begin arriving this winter and would cover about two-thirds the cost of Ingham County Drain Commissioner Pat Lindemann’s $34.8 million Montgomery Drain reconstruction project.

Paid back with interest over 30 years, the city’s portion of the regional project tallies more than $41 million, according to city calculations. Half of that cost — about $1.37 million per year for 30 years — is set to be paid by every taxpaying property owner in the city. Those situated adjacent to the ongoing drain reconstruction project will pay the other half, plus the citywide assessment.

That equates to an average cost over 30 years of $6,681 for residential properties without parking lots and $243,445 for commercial properties, calculated using an algorithm based on acreage and the amount of water runoff from each individual parcel, officials explained.

While still subject to change, the funding plan means the average taxpaying property owner would pay an added .26 mills on their winter property taxes — or about $13 for a home with a taxable value of about $50,000. Property owners in the immediate vicinity of the project could pay much more: an additional $223 annually for residences and $8,114 for commercial land.

The City Council released tonight a list of the property owners who are targeted to eat the bulk of the drain assessment, though it’s only published on pages 34-36 of its latest agenda posted online. A more easily accessible online listing is set to be made available sometime later this month.

Many property owners would pay less than $10,000. Others — including developers like Pat Gillespie and Joel Ferguson — would have their companies pitch in millions for the assessment. The entirety of the Frandor shopping center, for example, is set to be billed about $2.7 million.

Council members, meeting as the Committee of the Whole, recommended unanimously that the Council set a Oct. 12 public hearing. The Council was expected to approve it tonight.

Lansing Mayor Andy Schor has said he tried and failed to convince Lindemann to tap the brakes on the decades-long plans to reconstruct the drain, which runs from Frandor to the Red Cedar River. Under the drain code, however, city officials have said they’re powerless to stop the pollution-prevention project and can only decide how to pay the city’s share of the annual bill.

Income tax shortfalls and other revenue pitfalls amid the coronavirus pandemic haven’t done the city’s already struggling fund balance any favors in recent months. Schor’s latest budget proposal estimated city revenues to decline by at least $12.5 million over the upcoming year.

And with several million dollars already slashed from the budget and reserve funds at an all-time low, the mayor can’t reach much deeper into the city’s pockets to cover the costs, he has said. The only viable alternative: Bill local property owners directly for the costs for the next 30 years.

“It’s either spread out among all the citizens of Lansing and everyone has to pay, or we’re assessing that specific area,” Schor told City Pulse last month. “We’re splitting it. Nobody wants to pay more. That would also be quite a bit of money if we just billed it to taxpayers in that area.”

City Council members have also unsuccessfully suggested the project be delayed, but are now more focused on making sure local residents are fully aware of the incoming assessments. Councilwoman Carol Wood also suggested neighborhood meetings be scheduled this month.

Once the assessments are formally set, property owners will have 60 days to appeal them.

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