Special Assessments Defined

When a developer wants to subdivide a piece of land, the developer approaches the City of Derby with a plan showing the layout of each lot within the subdivision. The developer requests the City of Derby provide this subdivision with various improvements necessary to develop the lots. Typical improvements include:

Sanitary sewers Sidewalks Storm water sewers Streets

Traffic signals Turning lanes Water mains

The City of Derby provides the financing for and oversees the construction of these public improvement projects. The owners of the lots within the subdivision (the benefit district) repay the city through special assessments. The owner of each individual lot pays a predetermined portion of the cost of the improvements. Typically, these improvements are repaid to the city over 15 years, and are collected as special assessment taxes by the county.

Pay-In Period

After public improvement projects are completed, the project costs are divided among the lots in the benefit district and a total cost per lot is calculated. The property owner is sent a letter (Notice of Assessment) explaining the type of improvements constructed and the amount of each assessment. The property owner is asked to pay the assessment in whole or in part before a given date. If the amount is not paid on or before the stated date, bonds will be issued and the balance of the assessment will be collected in installments, with interest.

Paying Special Assessments

Typically, property owners pay a monthly amount into an escrow account set up by their mortgage company as part of their monthly mortgage payment. Each mortgage company establishes their protocol of making either annual or semi-annual payments to the Sedgwick County treasurer.

Each May and November, owners of record are sent a tax statement from the Sedgwick County treasurer indicating the amount of special assessments and general property taxes that will be due in June and December. This payment is typically made by the mortgage company from the established escrow account; however, some property owners prefer to pay their taxes themselves and pay the amount due every June and December.

Determining Cost

When property owners purchase a lot subject to special assessment, the packet of information presented at the closing table should include an estimate of proposed special assessments. Realtors should inform prospective purchasers of the estimated special assessments for the lot being purchased.

For questions regarding assessments, contact the Director of Finance at 316-788-1519.