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Special Assessment Frequently Asked Questions October 24, 2016 <br /> What are Special Assessments? <br /> Special Assessments are a charge imposed on certain properties for a particular improvement that <br /> benefits the owners of those properties. <br /> Why does the City charge Special Assessments for particular improvements? <br /> Special assessments are used to finance, or partially finance, particular public improvements that <br /> provide a direct benefit to certain properties. The amount of the assessment bears a direct relationship <br /> to the value of the benefit the property receives. In theory, special assessments are considered to be <br /> more equitable than property taxes because those who pay them obtain some level of direct benefit <br /> from the improvements. <br /> What authority does the City have to charge Special Assessments? <br /> The authority to use special assessments originates in the state constitution which allows the state <br /> legislature to give cities and other governmental units the authority "to levy and collect assessments for <br /> local improvements upon property benefited thereby." The legislature confers that authority to cities in <br /> Minnesota Statutes Chapter 429. <br /> How are Special Assessments determined for particular improvements? <br /> The City uses its adopted Special Assessments Policy as a guide to determine whether a particular <br /> improvement is eligible for the use of special assessments, which properties are eligible to be assessed <br /> for the improvements, and the amount each benefiting property is to be charged. When a particular <br /> improvement is determined to be eligible for special assessments, City staff identifies the properties <br /> that will directly benefit from the improvements and proposes the assessment amounts, interest rate <br /> and term of the special assessments. The City Council must approve the proposed assessments and <br /> terms before assessments can be collected (levied). <br /> How is the maximum amount of a Special Assessment determined? <br /> Special assessments can never exceed the amount of the special benefit received by the property as <br /> measured by the increase in market value due to the improvement. <br /> How are interest rates for Special Assessments determined? <br /> Interest rates are set at the current municipal bond rate at the time of the adoption of the assessment, <br /> plus two percent (2%). <br /> How are terms for Special Assessments determined? <br /> Special assessments are payable over a number of years (terms) which are typically determined based <br /> on the type and cost of the improvement (terms are typically 5 or 10 years). <br /> How are Special Assessments collected from property owners? <br /> Prior to certification of the assessment to the county auditor, the owner of any property so assessed <br /> may pay the entire assessment on such property, with interest accrued to the date of payment, to the <br /> City Finance Office. At any time thereafter, payment may be made to the City Finance Office for the <br /> entire amount of the assessment remaining unpaid, with interest accrued to December 31 of the year in <br /> which such payment is made. All unpaid assessments due are added to the Anoka County property <br /> taxes the following year. <br /> Page 1 of 2 <br />