Nobody likes paying specials because truthfully they are not "special" at all. When you get a special assessment levied on your home, most of us assume our "specials payment" is simply going to pay off the infrastructure by our house. One thing that many people are not aware of is that when the city loans money to pay for the infrastructure, they may get a loan at a 4% interest rate, then they will charge you a 5% interest rate. In other words, the city of Fargo is acting like a bank by charging you a HIGHER interest rate on a loan.
We have been told for quite some time that this higher interest rate was there to pay administrative fees or to give the city a little extra money in case someone were to default on their specials payment. Well, after doing some digging, the facts do not match up to the story we have been told. Once the city pays off the loan/bond on your "specials" the EXTRA 1% the city has been charging you sits is now available for the city to use that money as a sort of slush fund. They take that EXTRA money they have been charging you all those years on your "special assessments" and they move that money into the General Fund to pay for capital projects.
Fargo's finance director Kent Costin sent me this info laying out how it works:
Let's take the first one (2005 Series B) as an example. The city had a bond issued in 2005 for $10,675,000. The whole time the city had been charging YOU a higher interest rate than they are paying the bank to pay back the bond. What does the city do with this EXTRA money once the bond is paid off? Do you they give it back to you, or use it lower your tax burden? No, they use that money to pay for capitol projects.
As you can see in the example above, the city used the "FINAL FUND TRANSFER" to help pay for the Fire Station remodeling and/or the BSI Police station fit up.
Fargo City Commissioner Tony Gehrig and I did a Facebook LIVE earlier today to discuss this revelation. Please WATCH and SHARE this video, so that we, as taxpayers, can get back more of our money rather than having the city of Fargo act as a bank.