05-05-25 - Council Work Session Agenda

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CITY COUNCIL WORK SESSION STAFF REPORT ITEM NO. 9 STAFF ORIGINATOR: Michael Grochala, Community Development Director WORK SESSION DATE: May 5, 2025 TOPIC: Special Assessment Senior Citizen Deferral BACKGROUND Minnesota Statutes Chapter 435.193 allows cities to provide a hardship assessment deferral provided standards are adopted establishing guidelines for determining the existence of hardship. City Code section 303.10 allows for the City Council to defer payment of special assessments on homestead property owned by a person that is 65 years of age or older or retired by virtue of permanent and total disability. The deferment is subject to certain income - related conditions. To be eligible a property owner must meet the following income -related requirements: 1) The owner's shall not have an annual gross income in excess of Section 8, low-income limits in effect at the time of the application. This number is set annually for the metro area. 2) The applicant and any other owner of the property who resides therein with the applicant shall not have gross assets (excluding the homestead property) in excess of $50,000. 3) The Assessor's Market Value of the applicant's homestead parcel shall not exceed $60,000. Items 2 & 3 above have not been adjusted since 1983. The code allows for the Council, on the recommendation of the City Administrator, to adjust the asset and market value requirements by motion. However, staff are proposing deletion of the gross assets and market value requirements. This would leave the low-income limits that are regionally established each year ($78,250 for a two -person household). Alternatively, some cities use a formula determination based on the annual assessment amount as a percentage of annual gross income. For example, the hardship determination could be established when the annual assessment rate exceeds 2% of total adjusted gross incomes. This would allow for a more flexible policy based on assessment amounts.