Answers to Your Questions About Special Assessments
What are special assessments?
Special assessments are a way for cities to charge certain properties for the cost of making a local improvement, or to collect certain charges that will benefit those properties. The authority to levy special assessments is granted under Minnesota Statute, Chapter 429.
What improvements can be paid for with special assessments?
Special assessments can be used to finance many different types of local improvements, including the following:
- Street and sidewalk improvements
- Storm and sanitary sewer systems
- Steam heating mains
- Street lights
- Water works systems
- Parks, open space, playgrounds, and recreational facilities
- Planting, maintenance, and trimming of street trees
- Nuisance abatement
- Dikes and flood control works
- Retaining walls and area walls
- Pedestrian skyway systems
- Underground pedestrian concourses
- Public malls, plazas, and courtyards
- District heating systems
- Some fire protection systems
- Highway sound barriers
Can special assessments be used to collect service charges?
Cities may use special assessments to recover the cost of the following service charges if the city has adopted an ordinance to provide for it.
- Snow, ice, and rubbish removal from sidewalks
- Weed elimination from streets and private property
- Elimination of public health hazards from private property
- Street lighting, sprinkling, and dust treatment
- Repair of sidewalks and alleys
- Trimming and care of trees and removal of unsound trees
- Unpaid sewer and water bills
What is the procedure for ordering a special assessment improvement?
The following is a summary of the procedure for ordering a special assessments improvement:
Initiation of the order for the improvement. The order for the improvement may be initiated by the City Council or by a petition from affected property owners.
Preparation of a feasibility report on the improvement. The city engineer (or other qualified person) must prepare a report on the proposed improvement.
The report must include the estimated cost of the proposed improvement, and whether it is necessary, cost-effective, and feasible.
Notice of the public hearing on the improvement. A public hearing must be held on the proposed improvement. The city must publish a notice of the public hearing to consider the proposed improvement and mail a notice to each property owner in the proposed assessment area.
Public hearing on the improvement. At the public hearing, interested persons will have an opportunity to voice their concerns, whether or not they are in the proposed assessment area.
Ordering the improvement and advertising for bids. If the City Council must pass a resolution to order the improvement. The City Council will decide how the improvement will be done and, if necessary, issue a call for bids.
Notice of the public hearing on the proposed assessment. The city must publish notice of the hearing in the city newspaper and mail notice of the hearing to each property owner.
Public hearing on the proposed assessment. The purpose of this hearing is to give affected property owners an opportunity to express their concerns on the actual special assessment levy. The Council will pass a resolution adopting the assessment.
Senior Deferral. The Council may defer the payment of a special assessment for seniors if the following criteria is met:
- The applicant must apply for the deferment not later than 90 days after the assessment is adopted by the Council.
- The applicant must be 65 years of age or older or retired by virtue of permanent and total disability.
- The applicant must be the owner of the property and must occupy the property as his or her primary residence.
- The applicant’s income from all sources shall not exceed the low income limit as established by the Department of Housing and Urban Development as used in determining the eligibility for Section VIII housing.
The deferred special assessment will accrue interest from the date of the adoption of the assessment until it is paid in full. Please contact the City Clerk for additional information and application form.
Paying a special assessment. The City Clerk will bill each property owner for the improvements in early fall. The property owner has the following payment options at that time:
- Payoff the entire assessment by October 31st of the current year and there would be no interest charged.
- Make a partial payment of at least one-half of the total assessment by October 31st of the current year. The remaining balance will be certified to the County Auditor and added to your property taxes over a 15 year period at the interest rate specified in the notice.
- Make no payment and allow the assessment to be added to the property tax statement over a 15 year period at an interest rate as specified in the notice.
Levying and collecting assessments: The Clerk must certify the assessments to the County Auditor by November 15th. The assessment will be amortized over a fifteen year period and payable with the County tax bill.