Agenda - Council Work Session - 11/18/2014

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RELEVANT LINKS: In re Appeal by Eastside Development, 2001 WL 1035280, C4-01-582 (Minn. Ct. App. Sept. 11, 2001). Blomquist v. City of Eagan, 2001 WL 436187, C2-00- 1591 (Minn. Ct. App. May 1, 2001). Johnson v. City of Eagan, 584 N.W.2d 770 (Minn. 1998). In re Village of Burnsville, 310 Minn. 32, 245 N.W.2d 445 (Minn. 1976). Nordgren v. City of Maplewood, 326 N.W.2d 640 (Minn. 1982). Minn. Stat. § 444.075. Smith v. Spring Lake Township, 2001 WL 1464455, C0-01-370 (Minn. Ct. App. Nov. 20, 2001). Am. Bank v. City of Minneapolis, 802 N.W.2d 781 (Minn. Ct. App. 2011). Minn. Stat. § 471.345. Minn. Stat. § 429.041, subd.l . Especially with regard to street improvements, it may be very difficult to demonstrate that there is any significant increase in market value as a result of the resurfacing or reconstruction. When a court disallows a portion of an assessment because it was in excess of the benefit to the specific property, the city may not try to recoup the disallowed amount through another method —such as by imposing a charge for a utility line on only that property and not on the other properties involved in the assessment. When the cost of an improvement exceeds the benefit, the difference must not be borne by a particular property, but instead by the city as a whole. The Minnesota Supreme Court has held that connection charges, based on a different state law, are not assessments and may be imposed on top of prior assessments. One unpublished Court of Appeals decision, however, held that the cost of the connection charges should be included with the amount of special assessments in determining the special benefit to the property. More recently, the Minnesota Court of Appeals has clarified that the special benefit test does not apply to unpaid special charges collected in the form of special assessments when defraying the cost of providing "police power" services such as removal of snow, weeds, or public nuisances. C. Practical points to consider The following three strategies help avoid the problem of proceeding on estimates that do not equal actual revenue. 1. Coordinating procedures Chapter 429 allows coordinating the timelines of the special assessment and competitive bidding processes in a way that may protect the city from successful appeals and ensuing budget shortfalls. The city may determine the assessment amount and prepare the assessment roll before work on the local improvement even begins. The competitive bidding threshold for all cities, regardless of size, is $100,000. Thus, special assessment projects must be bid if the estimated cost exceeds $100,000. If needed, the city may advertise for bids and allow sufficient time after the bid closing date to permit the city to prepare the assessment roll based on the lowest responsible bid the city receives and to hold the assessment hearing (the second hearing) based on that low bid. The city then proceeds with the actual work of the project after certification of the assessment roll and the 30-day appeal period is over. League of Minnesota Cities Information Memo: 9/22/2011 Special Assessment Guide Page 4