No; the State Statute that allows the City to assess for public improvements is very clear on this matter. If the special assessments were validly levied and collected, there is no way for the City to refund previously paid special assessments.
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The City’s Utility Funds covers the cost of curb and gutter, sanitary sewer, domestic water and stormwater utility improvements in a neighborhood reconstruction project. Under the City’s previous Special Assessment Policy, residents are assessed the rest of the project cost, (major costs include road base and pavement) or 100% of the cost for the street reconstruction portion of the project. The new policy will transition from 100% assessment to 100% taxes with a transition period of 16-years.
The old policy is not financially or legally sustainable. Recent estimates for special assessments in neighborhoods with homes of all sizes have climbed as high as $32,000, a figure that is not sustainable. Under State Statutes, the City can assess properties for public improvements, but the benefit to property values must be equal to or greater than the assessment. As assessments climb, it may be difficult for the City to prove the market benefit.
The cost of subcuts and retaining walls will be removed from special assessments in the first year or 2021 construction projects. After the first year, assessments would be reduced each year until it reaches no assessment at Year 16. Sample assessment amounts by year are provided in the appendix of the assessment policy.
Yes. All taxpayers will begin paying taxes to the city for street reconstruction each year. In the first year, City taxes on the median-valued home would increase by approximately $40 for funding street reconstruction. In the remaining 15 years of the transition of either option, City taxes on the median-valued single-family home would increase by $11 per year for funding street reconstruction. Over the 16-years, the cumulative amount paid to the city from a median-valued single-family home is estimated at $1,865. Note that higher-valued homes would pay more in City taxes and lesser valued homes would pay less.
The policy change benefits all taxpayers by creating a sustainable funding source to ensure high quality streets. The streets provide the traveling public pathways to key destinations. These trips occur 24 hours a day, 7 days a week, in a variety of modes for a variety of reasons. Residents, businesses, emergency services, and others expect a high level of service to ensure disruptions do not occur.
Minnesota’s power of taxation is found in Article X of the Constitution of the State of Minnesota. The article states that taxes will be uniform. The City cannot tax properties of the same class differently based on the fact that they were previously
Typically during the sale of a home, the buyer and seller negotiate paying off the assessment into price of the home.
The City borrows money to fund street reconstruction. The interest rate applied to unpaid portions of the special assessments is 1 percent above the rate at which the City borrows. Historically, that rate was typically between 3 and 4 percent.
The City has reconstructed approximately half of the local streets. Therefore, approximately half of the properties have paid an assessment. Approximately 4% of properties change owners per year. If they moved into a neighborhood after street construction, some property owners within a recently constructed street may not have paid for an assessment. We anticipate it will take approximately 25 years to complete reconstruction of the remaining local streets at which point the cycle starts over.
Data is collected on the condition of the pavement, watermain, sanitary sewer, storm sewer, and lighting systems. The condition of the systems are compared to the remaining life in those systems to determine if now is the right time to maintain the systems or reconstruct the systems. Once reconstruction is determined the right plan of action, street reconstruction areas are compared to planning documents such as the Pedestrian and Bicycle Master Plan to determine additional needs. After all the needs are identified, staff tries to prioritize based on need with consideration of impacts to residents in an area over multiple years.
It is not recommended to delay a street reconstruction project after staff has determined the systems need replacement. The street and utility systems are vital pieces of infrastructure. Delaying reconstruction increases the risk of outages to customers. Staff has considered many factors in prioritizing street reconstruction neighborhoods to keep up with the needs of the community