Special Service Areas (SSA) and Special Assessment Areas (SAA)

Two similar terms you may have heard when looking for a new home “Special Service Area” (SSA) and “Special Assessment” (SA) are very different financing tools that have important differences you should know about as a resident or potential resident of Montgomery.

Special Service Areas: This financing technique allows the cost of a subdivision’s continuing maintenance costs to be borne by the subdivision itself (rather than the Village as a whole or the Homeowner’s Association). The amount is added to each property’s tax bill and is only for the cost of the maintenance of the subdivision’s public areas (examples: Stormwater basins, landscaping, etc.) The cost to the individual is much less than an SA. It is not a fixed amount and cannot be paid off as the maintenance is a continuing cost.

Generally, all new Montgomery neighborhoods will have a Special Service Area (SSA) established that simply provides for maintenance of common stormwater basin areas as specified with the original approval of the development plans. In certain instances, maintenance may include monument areas, landscape buffers, etc. By ordinance, the Village has established SSA’s for each new neighborhood.

Activation of an SSA will take place once the Village has adequate certainty that the development will be ready for acceptance within the next calendar year. Once accepted, Developer/HOA discontinues maintenance responsibility of the stormwater basins which is then transferred to the Village. Until that time, those areas will remain the responsibility of the developer or the HOA, depending on the HOA provisions. Once a subdivision’s basins are near acceptance, it is the Village's intent to activate the Special Service Area and collect fees from residents on their tax bills. When an SSA is activated for a development, the tax the residents pay toward the SSA will only be used for that SSA and any surplus will be put in a reserve fund for future use for that neighborhood only.

For example, residents that live in Foxmoor will only pay for the Foxmoor SSA and those funds will only be used for maintaining specified common areas in that neighborhood. While fees collected could amount up to $1.10 per $100 of Equalized Assessed Value (EAV), the Village estimates that the actual tax would be between 1/3 to 1/2 of that amount. 

Second, Special Assessment: Generally speaking, SA’s are used to fund much of the costs of the public infrastructure construction costs (i.e. roads, lights, sidewalks, etc.) for a particular subdivision. As an example, Lakewood Creek (not Lakewood Creek West) has a Special Assessment that is paid off by each homebuyer over a period of 28 years with payments of approximately $1,600 per year for a single family home. This amount increases annually according to a predetermined amortization schedule. It can be paid off early if desired. It is not dissimilar from having a second mortgag. Lakewood Creek is the ONLY subdivision in Montgomery that has this type of assessment. Lakewood Creek also has a backup SSA, but it will not be activated by the Village unless the Homeowners Association (HOA) does not manage the maintenance of the common areas according to Village standards. If you have questions about the Special Assessment for Lakewood Creek please contact Municap at 443-539-4105.

SSA Estimate Formula

$300,000 (Home/Property Market Price) x 1/3 = Equalized Assessed Value (EAV) of $100,000

What happens to the Homeowners Association fees when the SSA is activated?

Homeowners Association fees are determined by the Developer and, later, by the residents. There may be items not covered by the SSA that cause a property to have both the SSA, and a Homeowners Association Fee. The decision to have a Homeowners Association fee (or what amount that fee is) rests solely with the Developer/Residents and the Village has no control over that issue.

Example of why the Village uses SSA's

Accepted Residential Developments

Why use Naturalized Plantings for Stormwater Management?

Chaddick Institute Honorable Mention 2007

Controlled Burn Pictures from 2008

SSA Terminology/Definitions:

Active Type: Indicates that the Village will take responsibility of the SSA once it accepts the development.

Backup Type: Indicates that the owner of the property will take care of the SSA. If the owner does not take care of the SSA then the Village will take over responsibility. Certain standards have been set and will be monitored by Village consultants to assure the standards are being met.

Dormant Status: Indicates the Village has not levied to fund the maintenance of the SSA.

Levied Status: Indicates that the Village has levied a tax on the property owners of the SSA in order to fund maintenance of the SSA.

Questions: Please contact Michael J. D. Brown, Planner. 630-896-8080 x 1222 or brown@ci.montgomery.il.us

Below is a table indicating each established SSA as well as its type and status. A link is provided in order to view the SSA Ordinance and its location.

Disclaimer

The information contained in this document is intended as general educational and background information only and is not intended to apply to any specific situation nor may it be relied upon for any situation. Any resident or prospective resident should consult the actual ordinances and documents that apply to the property in question and consult competent legal counsel to interpret the impact of any of these items and other issues on the property. The Village reserves the right to change its policies and procedures at any time in accordance with law.