'5 Questions With' Amanda Gordon

Blog Post

1. Recently there has been a lot of discussion regarding Erosion Control Special Improvement Districts. What is an Erosion Control SID?

By way of recent legislation, the Ohio Legislature created a powerful community improvement and economic development tool to fight erosion along the Lake Erie shoreline through the creation of Erosion Control Special Improvement Districts (SIDs). Through the SID, property owners can secure financial assistance to complete erosion control projects on their properties through the levy of a special assessment on their properties at favorable rates.

I am serving as counsel to the first Shoreline Special Improvement District in Ohio that was formed by 13 communities in Lake County, and our firm is also representing a number of other communities along the Lake Erie shoreline in the early stages of the Erosion Control SID process.

2. Can you explain the special assessment process to abate erosion on a homeowner’s property and the benefit over traditional financing, such as drawing on a home equity line of credit?

Utilizing the special assessment procedures under Chapter 727 of the Revised Code, property owners would petition their local municipality to levy a special assessment on their property in an amount of the cost of the erosion control project. Once approved through the various legal requirements, the lien of the assessment is placed on the property owners’ properties, has a first priority lien at the same level as real property taxes, and is paid semi-annually with real property taxes.

In turn, special revenue bonds are issued for a term typically between 15 and 20 years and secured by the special assessments on the property owners’ properties. The proceeds are used to pay for the erosion control work.

This procedure, which comes with several technical and legal requirements, allows for the property owners to finance the costs of the erosion control improvements over a longer period of time as well as at a lower interest rate than they would likely be able to obtain in a traditional personal financing.

3. Erosion Control SIDs appear to be a great financing tool for property owners experiencing erosion control issues. What concerns should a property owner have and how long does the process take?

Yes, it is a great financing tool with long-term repayment and low interest rates. There are no concerns for the property owner other than working with the local municipality, the Ohio Department of Natural Resources and the Army Corp of Engineers to identify the necessary improvements and secure the applicable permits. The Erosion Control SID, which is run by a board made up of public officials and property owners and is advised by counsel, will help guide the property owner through the entire process. The timing is subject to numerous factors; however, once the Erosion Control SID is established, it should take between two to three months after permitting is completed for property owners to participate and take advantage of the financing and begin their abatement projects.

4. Are Erosion Control SIDs only available to those property owners who have been impacted by Lake Erie?

Right now the authorizing law only applies to properties abutting Lake Erie. As we have been in discussions with multiple communities and property owners, it has become apparent that problems caused by erosion should be addressed not just on Lake Erie, but also along inland rivers and waterways as well. In listening to various stakeholders, Mike Wise of our team took the initiative to seek an amendment to the authorizing statute to include water resources within a watershed district. The amendment is pending in the General Assembly. Assuming it passes, the use of an Erosion Control SID’s availability will expand inland.

5. As a seasoned bond attorney, what are your thoughts about the bond market as we continue to experience low interest rates? What would you recommend to clients?

As we continue to assist our clients with infrastructure financings across the state, we continue to see interest rates at or near all-time lows.  Even with market fluctuations, it still remains an excellent time to finance infrastructure and other public improvements. This continues to be one of the best markets to issue debt in an extremely cost-effective manner. My advice is to continue to establish and pursue plans for their infrastructure, equipment and other public improvements to take advantage of these current favorable conditions.

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