Agenda - Council Work Session - 11/18/2014

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RELEVANT LINKS: Buzick v. City of Blaine, 505 N.W.2d 51 (Minn. 1993). EHW Properties v. City of Eagan, 503 N.W.2d 135 (Minn. Ct. App. 1993). Schumacher v. City of Excelsior, 427 N.W.2d 235 (Minn. 1988). Tri-State Land Co. v. City of Shoreview, 290 N.W.2d 775 (Minn. 1980). Buettner v. City of St. Cloud, 277 N.W.2d 199 (Minn. 1979). Southview County Club. v. City of Inver Grove Heights, 263 N.W. 2d 385 (Minn. 1978). Minn. Const. art X, § 1. A. What do special assessments pay for? Special assessments have a number of important uses: • The most typical use is to pay for infrastructure in undeveloped areas of a city, particularly when the city is converting new tracts of land to urban or residential use. Special assessments frequently pay for opening and surfacing streets; installing utility lines and constructing curbs, gutters, and sidewalks. • Special assessments may partially underwrite the cost of major maintenance programs. Cities often finance large scale repairs and maintenance operations on streets, sidewalks, sewers, and similar facilities in part with special assessments. • Another use of special assessments is the redevelopment of existing neighborhoods. Cities use special assessments when areas age and the infrastructure needs updating. B. The special benefit test Special assessments reflect the influence of a specific local improvement on the value of selected property. No matter what method the city uses to establish the amount of the assessment, the real measure of benefit is the increase in the market value of the land because of the improvement. Under the special benefit test, special assessments are presumptively valid if: • The land receives a special benefit from the improvement. • The assessment does not exceed the special benefit measured by the increase in market value due to the improvement. • The assessment is uniform as applied to the same class of property, in the assessed area. Because special assessments are appealable to district court, it is important that the city considers the benefit to the property as a result of the specific improvement. Councils often do this by retaining a qualified, licensed appraiser. At the hearings on the assessments the appraiser presents a written or oral report on the increase in market value as a result of the improvement. A special assessment that exceeds the special benefit is a taking of property without fair compensation and violates both the Fourteenth Amendment of the United States Constitution and the Minnesota Constitution. Property assessed must enjoy a corresponding benefit from the local improvement. This is a different concept than property tax valuation. The Minnesota Constitution states: "The Legislature may authorize municipal corporations to levy and collect assessments for local improvements upon property benefited thereby without regard to cash valuation." League of Minnesota Cities Information Memo: 9/22/2011 Special Assessment Guide Page 2