State statutes provide a means to finance the construction of a sewer project by assessing the properties that benefit from the sewer service. Those in a defined sewer district are assessed for the construction of the cost to build that line. In Brookfield there are four Districts described under the Projects tab above.
The assessment amounts are based on the Grand List value of a property. The assessment rate is akin to a tax mil rate. It is calculated by taking the cost of a project, which is usually the amount of loans and/or bonds, divided by the total Grand List value of all eligible properties in the district. So, for example, in the case of the Three Condo District completed in 2009, the net cost of the project is $4,339,329 (1) and the total Grand List value of all properties eligible to connect comes to $60,744,910 (2).
The payment of the loan has a defined term with a known average interest rate. In the case of the Three Condo Project the loan term is 20 years at an average of 3% interest. Thus the assessment is due is divided in equal 20 year increments with interest assessed at 3% of the unpaid balance. Below is a calculator for you to determine the principal and interest on your property.
In the original Federal Road South District there is a 2% Capital Recovery Fee as provided by CT State Statue. The fee is calculated based on 2% of the Grand List Value of the new construction less the Grand List Value before construction. (7)
New since 2011: An Elderly Resident Assessment Deferral Policy.
(1) In the case of the Three Condo project the total project amount is $5,571,000. The net project amount is reduced due to a Clean Waters Fund grant by the State of Connecticut of over $1.2 million.
(2) The Grand List Value of a property is determined by the Brookfield Tax Assessor. It is set as 70% of the fair market value of the property. In the case of the Three Condo District this includes the value of each property eligable to be on the sewer, including Whiconier School and industrial properties along Vale Road.
(3) Generally the loan or bonds to fund the project have a fixed term and defined average interest rate. In the case of the Three Condo and Del Mar Drive Area Projects, the term is 20-years at an anticipated average interest rate of 3%. Thus the assessments are due over a term of 20 years, with an assessed interest of 3% on the unpaid balance.
(4) If additional properties connect within a sewer district they are assessed at the same rate. The property values are determined at the same year as the other properties. In the case of the Federal Road North District, the basis year is 1983, the last year revaluations occurred. It was the 1983 values used to determine the original assessment. In the case of the Three Condo District the basis year is 2006 and for the Del Mar Drive Area District the basis year is 2011. The value of additional properties in the basis year is calculated based on a government published construction cost index for Connecticut and is viewable here.
This data was captured at http://www.fhfa.gov/Default.aspx?Page=87 under
All-Transactions Indexes (Estimated using Sales Prices and Appraisal Data) at
States through 20xxQ# (Not Seasonally Adjusted) [TXT] (But this is now changed as of 2014)
Data is now captured from http://www.fhfa.gov/DataTools/Downloads/Pages/House-Price-Index-Datasets.aspx. See the link under Quarterly Data -> U.S. and Census Divisions (Seasonally Adjusted and Unadjusted) -> [TXT] Scroll down to CT data.
(5) A property owner can elect to prepay the entire Benefit Assessment. That will avoid future bills and interest payments. However, if too many properties do that, there will not be the income flow to pay the loan. In that case, the funds may come either from (a) additional properties connecting or (2) State Statues allow for a supplemental assessment to assure the bonds are paid. That has never occurred in Brookfield.
(6) As additional properties come on a district, the potential exists to lower the amount that the original properties are assessed. However, a property that has pre-paid is not eligible for a rebate.
(7) Capital Recovery Fee in Districts with a bond paid off: Where does the money go?
By State Statue (Sec. 7-267) the funds may be used as seed money to begin new projects or as a reserve against needed capital improvements on the existing system. In this regard, the funds may be used for planning and design as well as construction. While some within the existing system ma argue that the excess monies belong to them, it must be recognized that the initial planning which put the system in place was probably paid for by the town in general. Further, judiciuls expansion of the sewer system can result in some economy of scale via reduced user charges, as wel as a general improvement in the quality of life and favorable improvements to the tax base. *
* Quote from Methods of Capital Cost Recovery on Water Pollution Control Projects, A Summay and Analysis of the 1995 Sewer Benefit Assessment Survey, January 1997. A Document by the State of Connecticut Department of Environmental Protection.