PREPAYMENT OPTION FAQS

Please see below for a series of FACTS about the Undergrounding of Utilities Project assessment prepayment option.

What is the value of prepaying the assessment for the undergrounding project?  

The primary benefit of participating in the initial prepay opportunity enables the property owner to avoid future interest and other charges which are added to the assessment if paid annually. Also, by prepaying at this time, property owners will minimize their overall assessment amount. Once you prepay, your obligations for this assessment are concluded.


What is the cost of my prepayment? 

For prepayment cost, please refer to your June assessment notice previously sent to you or enter your address into the online cost search tool.


How do I prepay the assessment? 

Property owners interested in participating in the initial prepayment option for their undergrounding of utilities assessment should make their payment prior to the September 1st, 2017 deadline.

To prepay an assessment, please make your check payable to the Town of Palm Beach, Florida and mail it to the Town of Palm Beach, Attention: Finance Department, P. O. Box 2029, Palm Beach, Florida 33480. Please be sure to write the assessment parcel number on your check.


Why should I pay by September 1st? 

Doing so enables us to work with the Palm Beach County Tax Collector’s office to ensure the 1st annual assessment payment will not appear on your November tax bill.


Is this the only opportunity I will have to prepay the assessment?  

This is the initial prepayment opportunity, in other words, the 1st opportunity to prepay. Property owners may prepay the assessment anytime up until the Town-Wide Underground Utility project is funded by the issuance of long term general obligation bonds to fund the Town-Wide Underground Utility Project.


What does the town do with my prepayment since there is pending litigation concerning the funding of the project?

Assessment prepayments will be held in escrow until current litigation is resolved.


If I do not prepay, how many annual payments will there be? 

There will be 30 annual payments.


What is the interest we would be paying if the annual payment is elected? 

If the assessment is paid annually interest is added to the payment.  For year 1 interest is estimated to be 3.81% and may vary annually if short term debt is used. Short term debt is planned for financing until the general obligation bonds are issued. Annual interest rates will be locked when financing is obtained through the issuance of general obligation bonds to fund the Town-Wide Underground Utility Project.


What are the additional charges associated with the annual payment?    

There will be interest and additional overhead charges such as fees paid to the Palm Beach County Tax Collector to coordinate assessment collection which appears on your annual tax bill.


If one did not prepay, then what is the annual amount?  

The annual assessment is different for all parcels.  Go to www.undergrounding.info and use the assessment cost search tool to show your prepay amount and estimated annual payment.


How do I find more information about the project? 

Another option to obtain information is to go to http://undergrounding.info/ and use the “Contact” tool on the website.

Property owners may also send an email to underground@townofpalmbeach.com or call 561-227-7077 and leave a voicemail which are typically returned within one business day. Whichever method is used to request information, please tell us the parcel control number if available, owner’s name, property address, your phone number to call or email address to send answers to assessment related questions.


When one pays property taxes in advance, one gets a discount. Does the prepay amount contain a discount?  

The initial assessment prepayment amount allows the property owner to avoid all interest payments and financing associated with future prepayment opportunities or the annual payment option.


Is my assessment tax deductible? 

Assessments are not deductible from your annual income taxes. However, the IRS allows assessments for local improvements to be used to increase the cost basis of the property, which may reduce the amount of capital gains tax you pay on the sale of your property. (Refer to IRS publications 551, 530 and 17).  Please consult with a tax professional to obtain information about your specific property.


Will those who prepay the assessment receive an acknowledgement letter?

Yes. Those who prepay will receive a letter and a receipt.


For more undergrounding assessment FACTS, please visit: http://undergrounding.info/assessments-faqs/ 

You can review the prepayment reminder letter here:  http://undergrounding.info/prepayment-option-for-underground-townwide-utilities-assessment/

GENERAL FAQS

How can I find out how much this will cost me?

The initial assessment amount is on your notice received in the mail and you can find out your cost online at: http://undergrounding.info/cost-search-tool/  The initial assessment amount was calculated using the following assumptions with contingencies:

The amount of the initial assessment is based on a total debt issue of $90,000,000 and estimated debt service for 30 years at an estimated interest rate of 4.31%.

Assessments are calculated based on an estimated annual debt service of $5,275,000.

Administrative and legal fees totaling $100,000 have been added.

The assessment has been increased by 2% to include the 2% first year charge imposed for the cost of collections by the Palm Beach County Tax Collector and Property Appraiser. In the second year and every year thereafter the cost drops to approximately 1% for Tax Collector and a small fee for the Property Appraiser.

The assessment amount in the notice has been increased by 5% to account for the up to 4% early payment discount allowed by the Palm Beach County Tax Collector and a contingency for uncollectable assessments.

It is highly likely the final assessment amount will decrease from the amount on your notice. 


When will the final assessment numbers be available?  We plan to post the final assessment amounts online in the cost search tool, shortly after adopted on July 12th.


When will the assessments be billed?  They will be billed on your property tax bill which you will receive from the Palm Beach County Tax Collector issued in November 2017.


What is the average cost per property owner? The average annual assessment in the initial assessment resolution for a single family home is $1191 or $3.26 per day. The average annual assessment for condos is $331 or $0.91 per day.


How will this project be financed? In the long-term the project will be financed through general obligation bonds paid by a special assessment to each individual property owner to ensure equity. The assessment method is an equitable form of payment that has been used by other communities that have undergrounded and has been approved by the courts.  In the short term, a financing plan was developed that will use a combination of the revenue from the assessments and Commercial Paper.


How long is the special assessment levied? The assessments will be levied for 30 years from the start of the assessment.


Is a special assessment an equitable way to pay for the undergrounding project? YES. After significant review and consideration by both the Underground Utilities Task Force and Town Council it was determined that the assessment methodology was the fairest approach for apportioning costs associated with this project.


How are the assessments determined?  A methodology has been developed that is based on the special benefit provided to properties within the Town as a result of undergrounding overhead utilities.  The benefits are safety, reliability and aesthetics.

The benefits are allocated 30.8% to safety, 38.4% to reliability and 30.8% to aesthetics.

The safety factor is based on land use and lot size. Reliability is based on population density factors derived from the 2010 census data and land use. The Aesthetic calculation is based on lot size and land use.

If a property has overhead utilities, then they receive the entire weight of the safety reliability and aesthetic benefits based on their land use and lot size.

If a property does not have overhead utilities, the assessment is reduced by 1/2 of the safety and aesthetics benefits.


Has the special assessment methodology been approved by the courts? YES.


Are the funds allocated from the special assessment dedicated to the undergrounding project? YES.


If I sell my home, do I need to pay off the assessment? NO. Once you sell your home, the remaining assessment payments will transfer to the new property owner.


If I believe my assessment is incorrect, who do I talk to about this? The Town has an appeals process put in place to deal with any inaccuracies on a case by case basis.  After the final assessments are adopted, you must appeal in writing to the Town Manager based upon provisions of section 90-49 of the Town Code of Ordinances.


When will I hear from someone regarding my appeal? It would depend on the complexity of the issue.


What if I can’t make it to the public hearing, how do I submit a comment? You may send a letter to the Town Council at the Town of Palm Beach, 360 South County Road, Palm Beach, FL  33480.


Will my assessment change over the 30-year period? The amount may change but it cannot exceed the amount in the notice you received unless circumstances cause us to initiate a new notice of assessment.


Can I deduct the assessment from my taxes? Assessments are not deductible from your annual income taxes. However, the IRS allows assessments for local improvements to be used to increase the cost basis of the property, which may reduce the amount of capital gains tax you pay on the sale of your property. (Refer to IRS publications 551, 530 and 17) Please consult with a tax professional to obtain information about your specific property.


When will the project start in my neighborhood?  Project sequencing maps are available online depicting the current schedule which is subject to change.


Can I prepay? Yes, you will have the ability to prepay once the final assessments are adopted on July 12th.  A prepayment letter will be sent to you in (August) and you should prepay by September 15th.  You will have  at least one more opportunity to prepay before long term debt is issued.


What information is on the website? 

Master plan                 

UUTF meeting agendas and minutes                 

The Dashboard                 

Project sequencing map                 

News releases regarding the project             

Facebook link for updates

Cost Search Tool