A sewer betterment assessment is a tax that can be assessed by municipalities to properties that have been "bettered" by the construction of a public sewer. Service by a public sewer is an improvement over on-site wastewater disposal (i.e. septic systems, etc.). Therefore, when a municipality constructs public sewers, the value of those properties abutting the sewer line are said to have been improved or "bettered".
In Massachusetts, sewer betterments are governed by Chapters 80 and 83 (excluding Sections 1 and 2 of Chapter 80) and are under the jurisdiction of the Department of Revenue. Local rules and regulations must be formally adopted by a community through a vote of Town Meeting (See Article 3, Special Town Meeting September, 1986).
Sewer betterment assessments are monies intended to pay back all or a portion of the debt service of the "local share" of the sewer construction and associated engineering capital costs. There are two (2) basic methods for calculating sewer betterment assessments the 'fixed uniform rate" method and the "uniform unit" method.
approved the "uniform unit" method which defines each property as a number of "sewer units" and divided the assessment costs by the total number of sewer units included in the project. A "sewer unit" is defined as a single family residence. Therefore, a two-family residence would be equal to two (2) sewer units, three-family to three (3) sewer units, etc. Commercial, industrial and vacant properties are calculated into "single family equivalents" to include them in the assessment. Typically, this is done by calculating average water usage for developed properties and by determining intensity of future use, zoning and developable area for undeveloped properties. For example, a sewer unit for non-residential, developed properties are defined a being equivalent to 300 gallons per day of average water consumption. Therefore, a commercial property which historically has an average meter use of 600 gpd would be calculated as 2 sewer units. An acceptable method of converting undeveloped property into sewer units would be to calculated the number of potential developable dwelling units based on zoning and available lot area. Chelmsford
The sewer betterment assessment is a one time tax that can be paid in one lump sum or apportioned up to a maximum of twenty (20) years. The assessing body can establish a set period of time for the apportionment (which may simplify the billing process over allowing the property owners to choose a time period) Apportioned assessments can be charged interest at one rate of five (5) per cent per year or up to two (2 percent higher than the rate of borrowing used to fund the sewer project. Chelmsford's interest rate is presently 8% (2% over borrowing rate of 6%).
The initial billing is sent by the Assessors in a notice separate from the property tax bill. Each property owner shall be given thirty (30) days in which to pay in full with no interest. Those property owners who do not pay within this time can have their assessments apportioned with interest added each year on the unpaid balance. The annual apportionments are added to the property tax bill. A lien is placed on the properties electing to apportioned the assessment over time. A lien is created by recording the listing of unpaid betterments at the Middlesex North District Registry of Deeds. This filing entitles the Town with the appropriate mechanism to assess and collect the sewer betterment. The lien is discharged when the assessment is paid in full or will expire automatically two years after the final payment is made.
The sewer betterment assessments for the first phase of sewering in
was levied in August of 1989 and the cost per sewer unit was $1,250.00. After eleven subsequent phases of the Sewer Project have been levied, the most recent per unit cost is set at $3,500.00. Using this method and rate schedule of assessing, at this point over $6.7 million of the $29.1 million in local share costs for the sewer program will be recovered by sewer betterment assessments. This represents approximately 23% of the project cost being borne directly by the sewer system service area properties. The town-wide sewerage project is designed to protect the public drinking water supply for the entire town and therefore a portion of the sewer project costs are added to the general tax rate. The sewer betterment program is administered by the Chelmsford Sewer Commission. Chelmsford
The timing of the assessment of betterments usually coincides with the project's completion. However, sewers do not necessarily have to be on line prior to issuing the assessments. Once the costs to be included are known and the construction is complete enough that the improvement is imminent, sewer betterments can be issued. The Massachusetts Department of Revenue states "a sewer is a public work of such permanent character that its discontinuance is unlikely and therefore, it is the construction of the sewer and the potential for sewer service that increases the value or use of abutting or nearby properties, not the actual connection'.
Sewer "betterments" are only assessed to properties abutting public sewer lines. There are other properties that may also receive benefit from these facilities' for example, developments connecting through private easements or through private sewer extensions. Chelmsford has established provision in their local rules and regulations to include these properties in the calculation for capital cost recoupment. This is accomplished by imposing privilege fees and compensatory privilege fees. These fees are calculated as the sewer betterments would have been if the property abutted the public sewer line. Payment of these fees are required at the time of connection to the public sewer system and is general not apportioned.
Abatements and Deferrals under Massachusetts General Laws (Chapter 80, Section 5) establishes a timetable within which grievances and requests for abatements must be filed. A property owner must file a petition for an abatement within six (6) months after the assessment notices have been sent. The Sewer Commission has four (4) months to act on the petition and then must notify the owner within ten (10) days of making their decision whether the request was granted or denied. A Deferral of betterment principal and interest can be granted to eligible property owners who are receiving deferral of their property taxes Under Chapter 59, Section 5, Clause 41A from the Chelmsford Board of Assessors. When a complete deferral is granted, the sewer betterment assessment is postponed until property ownership is transferred, at which time, the original principal, plus interest, is due and payable in full. Another type of deferral is allowed on vacant, undeveloped property. If this deferral is granted, the property owner must pay a 4% interest charge annually and pay the principal, in full, within 3 months after the land is built on.
Chelmsford Sewer Betterment and Privilege Fees Rules & Regulations, 9/8/96 rev. 4/23/90
Acknowledgment is given to Emily H. Cox . P.E., Weston & Sampson
"Sewer Betterment Assessments: A Financing Alternative"
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