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PUBLIC IMPROVEMENT <br />SPECIAL ASSESSMENTS <br />I. GENERAL <br />Minnesota State Law, Chapter 429 provides that a Municipality has the power <br />to make public improvements such as; sanitary sewer, storm drainage, water source, <br />storage and distribution facilities, street improvements including grading, curb and <br />gutter, and surfacing, sidewalks, street lighting, recreational facilities, etc. <br />THE THEORY OF SPECIAL ASSESSMENTS <br />Special assessments are an indirect form of taxation. They are a compulsory <br />charge on selected properties for a particular improvement or service which benefit the <br />owners of the selected property and are also undertaken in the interest of the public. <br />Special assessments have three distinct characteristics: <br />1. They are a compulsory levy used to finance a particular public improvement <br />program. <br />2. The levy is charged only against those particular parcels of property deemed <br />to receive some special benefit from the program. <br />3, The amount of the charge does not exceed the value of the benefits <br />received. <br />Special assessments are imposed only on real estate. They are never levied against <br />personal or moveable property. In theory, special assessments are frequently <br />regarded as more equitable than property taxes because those who pay them obtain <br />some direct benefits from the improvements undertaken. <br />SPECIAL ASSESSMENT USES <br />Special assessments have three important applications: <br />1. The first and most popular use is for financing new improvements <br />particularly when new tracts of land are being converted to urban use. In <br />this application they are frequently used to pay for sanitary sewer, storm <br />drainage, water source, storage and distribution facilities, street <br />improvements including grading, curb and gutter, and surfacing, <br />sidewalks, street lighting, recreational facilities, etc. For new <br />developments the most current Development Contract also identifies <br />additional requirements. Refer to the Appendix for an example <br />Development Contract. <br />2. Special assessments may also be used to underwrite the cost major <br />maintenance programs. Large-scale repairs and maintenance <br />-3- <br />