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Borough's 1st road district sees results

Posted: Thursday, August 01, 2002

It's a much smoother drive through the neighborhood these days, says K-B Subdivision resident Kevin Austin, now that his road has been paved.

It took three years of resident pressure, a petition and favorable legislation from the Kenai Peninsula Borough before the residential area behind the Red Diamond Center saw five roads improved and paved.

To get it done, residents formed a Road Improvement Assessment District, a kind of local improvement district in which the borough appropriates project funding up-front and residents agree to pay back the bulk of those costs plus interest over a 10-year period.

The idea has been attempted before, but one has never gotten close to actual construction.

"This is quite a story," said Austin, president of the K-B Estates Committee, which led the push to create the assessment district and overcome initial skepticism among residents. A petition begun in January of last year gathered the necessary signatures.

"The peninsula never had a successful RIAD before," he said. "We're the first. It took three years to get done. We voted it in with just over 70 percent wanting to do it."

Alaska Road Builders has completed paving on the five subdivision roads, including Forest Wood Avenue, Ravenwood Street, Huntington Drive, Rockwood Drive and Homewood Way, which are the access and interior roads of the subdivision.

Work continued this week on the finishing touches, such as matching the pavement to existing driveways. Some residents have taken the opportunity to have their driveways paved, Austin said.

Making the assessment district fly required changes to borough law, which were made last year.

Borough law at the time served to nix assessment districts whenever properties expected to bear more than 4 percent of the total cost were delinquent in borough property taxes. That number was determined to be so low that it virtually prohibited otherwise feasible improvements from ever seeing the light of day. In April of last year, the Kenai Peninsula Borough Assembly adopted an ordinance increasing the limit to 10 percent, a move that assembly members said was a reasonable delinquency rate that would protect the borough's interest in assessment districts and promote feasible

projects.

The borough also set the due date for annual installment payments to Oct. 31, timing it to the arrival of Alaska Permanent Fund Dividend Checks, thus making such payments easier on subdivision residents.

In May 2001, the Kenai Peninsula Borough Road Service Area Board approved the project, and a month later, the assembly passed a resolution forming the K-B Subdivision road improvement assessment district.

The cost of the project was estimated at $384,156. That sum was appropriated in July of last year. However, Alaska Road Builders' submitted a bid of $279,607, significantly lower than the estimated cost -- good news for the residents and the borough.

In addition, the road service area is prepared to pay 25 percent of the cost of the improvements as soon as the final bill is submitted.

The remaining cost will be distributed among subdivision properties based on the assessed values of those properties. Austin said he anticipates that the average assessment will fall somewhere between $3,500 to $4,200 payable over 10 years.

"I personally have not talked to anyone disappointed in the project, but a lot who have come up and shook my hand," he said.

Austin also said that overcoming many of the roadblocks that have stymied other assessment districts was more than one person could handle. He said the K-B Subdivision project succeeded because residents combined their efforts and formed a committee to spread out the workload.

Austin predicted that now that their project has shown the way, other neighborhoods might use the RIAD financing vehicle to improve their roads, too.

"Doing a RIAD today is certainly easier than three years ago," he said. "Others will look at it. The people here are ecstatic. We finally have paved roads. The ice has been broken."

Borough Mayor Dale Bagley said he hoped others would take advantage of the chance, but he also said putting a RIAD together takes a lot of work, not only for

the borough, but also for the residents who organize it.

"We definitely have a lot more money in the road service budget," he said. "But I don't think there will be a lot of them coming forward."

Bagley said he expects that some of the nicer subdivisions may opt to take

the RIAD route to upgrade. But other residents may like the country-road feel of unimproved gravel, he said.

"It's great to have this one off the table," he said.

Jeff Sinz, borough finance director, said the road service area has a couple of revolving funds designed to move RIADs along.

A $50,000 pool of money is available to front the costs associated with preliminary engineering. If a project does not proceed, the service area eats that cost. If a project goes forward, the expenditure is recovered in the ensuing assessments, he said.

Another fund of $150,000 is available for pavement and certain gravel projects. It is from that fund that the board may authorize paying up to 25 percent of the costs associated with those projects. If one project draws that fund down, the service area can go back to the assembly for further funding, Sinz said.

The money to cover the up-front construction costs comes from a $2 million

fund set aside in the borough's general fund. It is the appropriations from that fund that assessments repay over 10 years.



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