PROCEDURE TO IMPOSE SPECIAL ASSESSMENTS
Minnesota Statutes, chapter 429, specifies the procedures that must be followed in order to use special assessments. Local governments must be careful to follow all of the necessary steps to ensure that the assessments are properly imposed to avoid legal challenges from the landowners.
Although the statutes do not refer to phases, it may be easier to understand the complicated procedure as if it is divided into three phases, as summarized below. For specific types of projects, there are specific additions or exceptions to these procedures. The law also provides for supplemental assessments and appeals from assessments, which are not covered here.
Phase I: Initiation and Preliminary Assessment
Initiate the process. Either the local government or a petition signed by the affected property owners may initiate the proceedings.
Prepare a report. The local government must have a report prepared on the necessity, cost-effectiveness, and feasibility of the proposed improvement. The city engineer or some other competent person prepares the report.
Give notice of public hearing. The local government must publish a notice for the public hearing twice in the newspaper, at least one week apart. In addition, the local government must mail a notice to all property owners in the proposed assessment area at least ten days prior to the hearing.
Hold public hearing. The hearing must be at least three days after the second notice in the newspaper. A reasonable estimate of the total amount to be assessed and a description of the methodology used in calculating the individual assessments must be available at the hearing. Interested persons must be allowed to speak at the hearing. (This public hearing is not required if 100 percent of the landowners requested the proposed assessment.)
Adopt a resolution ordering the improvement. If the local government initiated the proposed assessment, a four-fifths vote is needed to pass the resolution. If the property owners initiated the petition, the local government only needs a majority vote to adopt the resolution. In both cases, the resolution must be adopted within six months of the hearing held during Phase I.
Phase II: Detailed Analysis
Solicit bids. After a local government decides to do a project, it must determine the actual cost of the project in order to prepare the assessment roll. The statute specifies the bidding process.
Prepare proposed assessment roll. The local government must calculate the proper amount to be specially assessed for the improvement against every assessable parcel of land. The assessment roll must be available for the public to inspect.
Give notice of public hearing. The local government must publish a notice in the newspaper at least once, not less than two weeks prior to the scheduled meeting. The notice must state the day, time, place, general nature of the improvement, area proposed to be assessed, total amount of the proposed assessment, and describe the process for objecting to the improvement. In addition, the local government must mail a notice to each affected property owner at least two weeks prior to the public hearing on the proposed assessment. The notice must state the amount to be specially assessed against the property owners property, the prepayment options, the interest rate if the payment is not prepaid, and that the local government may adopt the proposed assessment at that hearing. The notice must also state that no appeal may be made as to the amount of the assessment adopted at the hearing unless the property owner has objected in writing prior to the hearing or in person at the hearing.
Hold public hearing. The local government may make amendments to the proposed assessment at the hearing. The hearing may be continued at another time.
Phase III: Approval of Final Assessment Roll, Certification
Approve and certify the assessment roll. The local government must approve the final assessment roll and then the assessment roll must be certified to the county auditor. A property owner has 30 days after adoption of the assessment to appeal it to the district court. If any of the assessments contained in the final roll are different than the assessments, the local government must mail a notice to the property owner stating the new amount. The local government may have to go back to phase II.
Issue debt to finance the improvement. The local government issues obligations to finance the improvement. The local government may issue local improvement bonds or assessment revenue notes to pay for the local improvement. Local improvement bonds are general obligation bonds, backed by the full faith and credit of the local government. If less than 20 percent of a project is to be paid for with special assessments, the local government must hold a referendum on the issuance of the bonds.
Collect the assessments. The local government may certify to the county auditor the entire assessment roll (for the entire project), or the local government may certify annually the amount of assessment on each parcel for that year. A taxpayer may prepay the entire assessment amount and avoid interest charges, in which case the prepaid amounts are taken off the assessment rolls.
Let contracts for work on the improvement. The local government must let the contracts within one year, unless the resolution specifies another time frame. Home rule charter cities. If a city is following procedures set in its charter, a few of the statutory provisions still apply. Specifically, a city proceeding under its charter provisions, must:
- give property owners notice of the procedures they must follow under the charter in order to appeal the assessments to district court,
- give property owners notice of any deferment procedure established by the municipality and
- let the contract for the work, or order the work done by day labor or otherwise as may be authorized by the charter, no later than one year after the adoption of the resolution ordering such improvement, unless a different time limit is specifically stated in the resolution ordering the improvement.
