CENTERVILLE — It has been said and Centerville residents are under the impression property values in the 2012 street improvements project area will increase after construction is finished.

Centerville's city clerk Friday, Sept. 21 by telephone talked about her property in the project area on East State Street and how it will increase in value.

"It's worth it to me to have a new street in front of my house," Kim Crego, city clerk and commissioner of municipal services, said. "Because my house is now just worth more. And of course that means I'm going to pay more taxes."

Crego pointed out the amount any property goes up in value would depend on the type of improvements considering street, sidewalk and driveway approaches are part of the project.

"Everybody is assessed the cost of the street evenly," Crego said. "Then, if they have sidewalks, driveway approaches, so their cost is going to be higher because those are assessed only to that property. They're not assessed to any other property."

Yet some residents questioned during two city meetings the 2012 street improvements project, the preliminary assessments and how council valuations were determined.

Scott Arnold, the owner of two rental properties in the North 10th Street project area, questioned how the city made the preliminary assessments.

"The council came up with the valuations and then what the dollar amounts to the increase per address and they don't seem like they add up," Arnold said. "It's like they pulled these numbers out of the sky."

Many property owners in the street improvement project area have, as the result of three unidentified realtors, a council valuation or fair market value for their property higher than what the county assessor says it's worth. And then there's property owners in the project area who have a significantly lower council valuation than what the county assessor says it's worth.

The concept is that all properties in the project area will benefit because of the 2012 street improvements project.

"One would assume that all of (the properties) would go up. They would be higher. One would assume,” Crego said.

Of the 141 units or lots in the project area, 46 were given a council valuation lower than what the county assessor lists as the property's worth.

Several properties' council valuation were significantly lower than assessed value.

• The property at 717 E. State St. was given a council valuation of $3,500. The county has it assessed at $34,780. The property has a preliminary assessment of $875, which is the maximum it can be assessed. The property's allocated project cost to lot is $4,839.02. The property's conditional deficiency, what it doesn't have to pay, is $3,964.02.

• Casey's at 705 E. State St. was given a council valuation of $450,000. The county has it assessed at $483,000. Casey's at 401 W. Maple was given a council valuation of $100,000. The county has it assessed at $128,790.

• Iowa Trust and Savings Bank at 200 N. 10th St. was given a council valuation of $480,000. The county has it assessed at $712,920.

• The property at 412 N. 10th St. was given a council valuation of $30,000. The county has it assessed at $41,240.

• The property at 415 N. 10th St. was given a council valuation of $20,000. The county has it assessed at $36,820.

• First Baptist Church at 603 W. State St. was given a council valuation of $250,000. The county has it assessed at $537,790.

• The property at 610 W. State St. was given a council valuation of $95,000. The county has it assessed at $106,620.

What makes the council valuation or fair market value — what the property will be worth after the improvements have been done —important is that is how the city determined preliminary assessments.

The city cannot assess for more than 25 percent of the council valuation or fair market value for any property in the project area. The higher the council valuation, the higher the preliminary assessment.

Crego said council valuations were determined by three local realtors hired by the city. They assessed the properties in the project area and assigned each a council valuation or fair market value.

"All of this is based on fair market value of the property," Crego said. "It's not based on what the county assessor says. It's based on what realtors feel you can sell it for."

Perhaps the value assigned by the county assessor should be part of the equation because the Iowa assessor's web site says their assessments are based on fair market value.

Some landowners in the project area stand to save thousands of dollars because the city's preliminary assessments are based on council valuation and not on what the county assessor says the property is worth.

While 46 lots or units in the project area have a council valuation below county assessed value, the remaining 95 lots or units in the project area have a council valuation higher or the same as what the county assessor says they are worth.

For instance, the property at 400 W. Washington was assigned a $75,000 council valuation and was given a preliminary assessment of $12,026.97 by the city. The county has it assessed at $56,140. The almost $20,000 difference between the city and county could mean this property owner has a significantly higher preliminary assessment.

The property at 201 N. 10th St. has a council valuation of $110,000. The county assessor says it's currently worth $69,110. The city has assigned a $5,582.75 preliminary assessment for the property owner.  

The property at 314 W. State St. has a council valuation of $125,000. The county assessor says it's currently worth $97,900. The city has assigned a $17,328.02 preliminary assessment for the property owner.

Find the difference between Centerville council valuations and Appanoose County property assessments by going to City Hall to look at what the city has determined and then go to the county assessor's web site to see what the properties are worth.

In essence, the three anonymous realtors hired by the city to set a council valuation or fair market value for the properties in the 2012 street improvements project area, determined what each owner would pay in preliminary assessments. The assessments were done in May.

Crego said the three local realtors were hired with the understanding their identities would not be revealed.

Crego admitted any one of the three could have inflated a property's council valuation or fair market value in order to get a higher assessment. While possible, not very likely, she said.

"But these people are hired to be independent," Crego said. "And there was three of them that were hired. No, I don't think they're out to do that. I think they're fair. I think they're reasonable people. And their credentials, their businesses are on the line. So, I don't think they're going to be out with grudges or anything like that."

Crego said it was her understanding not one of the three realtors hired had property in the project area. If they did, they would not be allowed to assign fair market value or council valuation, she said.

Crego said during Friday's interview the city was looking into one property.

The 2012 street improvements project area includes 10th Street from West Maple Street to West Washington Street; West State Street from Fifth Street to 10th Street; and East State Street from Haynes Avenue to 18th Street and from 18th Street to the entrance to Oakland Cemetery. The improvements are expected to cost approximately $4.3 million.

Properties within 300 feet of the project area are assessed.

The estimated $4.3 million dollar project is being funded by property assessments not more than 25 percent of the cost of the improvements and the city issuing general obligation bonds to pay the more than 75 percent left over. The West State Street project area includes approximately $600,000 in federal money.