The Prepay Program was designed to allow property owners to pay for their special assessments prior to the bonds maturing. When a prepayment of specials is made, the property owner stands to save a substantial amount of money. With the exception of the first bond year, the property owner is required to pay the principal for all years outstanding. The interest for the tax year in which the prepay is being made is amortized to the month in which the payment is being made. For example, if the property owner were to pay in February, he/she would pay for two months interest. If a property owner chooses to prepay the assessments in the first year that the bonds are spread on to the tax roll, the property owner is required to pay the first full year's interest and all of the principal for the project.
When the property owner decides to prepay specials, the property owner files an Escrow Agreement with the City. The money that the City receipts is then placed into an escrow account. The proceeds are invested at a rate sufficient to cover the debt service interest requirements that need to be made on the outstanding debt.
Prepayments on special assessments are made for a variety of reasons. One of the more commonly stated reasons is to make a property more marketable. Another is to lower the cost of the mortgage payment due on the property. Whatever the reason, the property owner is clearly the one who benefits from the program. Prepayments can be made on all outstanding City specials, one project, or multiple projects. However, the full balance for the project(s) must be made. Partial or down-payments cannot be accepted.
For prepay information on your property, please submit a request for payoff of specials.
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