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• • • Gordon Heitke January 28, 2008 Page 3of13 neither assessments nor the undefined "general revenues." The result would be a significant impairment of the city's ability to undertake improvements in these areas. A more fundamental question is whether the City Charter may absolutely prohibit special assessments for all or certain types of improvements that would otherwise be assessable under Chapter 429. Minnesota Statutes, Section 429.021, subdivision 3 indicates that when the cost of any improvement is defrayed by special assessments, "the procedure in this chapter shall be followed unless the council determines to proceed under charter provisions." Clearly, a charter may establish an alternative procedure for carrying out special assessment financing (as the Lino Lakes Charter has done in the current Chapter 8). It is not clear, however, that a charter may supersede the substance of Chapter 429 and flatly prohibit the use of assessments as a financing tool. A full discussion of the relationship between city charters and state law is beyond the scope of this letter. However, in our view Subdivision 2 creates the potential for litigation based on a claim that the charter is preempted by (or conflicts with) state law. Section 8.02. Relation to State Law. This subdivision clarifies that state law "relating to local improvements" applies except as otherwise provided in the charter. However, this subdivision uses the term "local improvements" without defmition, while the rest of the Commission Amendment uses the term "public improvements." As noted above, the lack of defined terms creates ambiguity and uncertainty. Section 8.03. Power to Impose Special Assessments. Subdivision 1. This subdivision partially reiterates state law regarding the general rule of special assessments, i.e., they can be imposed only when the improvement provides a "special benefit." The only concern we have is the statement that such special benefit must be enjoyed by "adjacent or nearby properties." As noted above, there is a large body of law about measurement of benefit, and the proximity of a property to the improvement is not always critical in that analysis. Arguably, adding these terms in the charter limits the ability to find benefit where it would otherwise exist under state law (i.e., where the property's market value is increased by the amount of the assessment). As such, this provision could impair the city's ability to undertake certain kinds of improvements, and could also raise the question about preemption by state law (similar to the issue raised under Section 8.01, subdivision 2). Subdivision 2. This provision prohibits the use of special assessments for maintenance (except in the case of a 100% petition). As with the prohibition on assessments for improvements designed to open up new areas of the city, this provision might conflict with or be preempted by state law. Further, reading this provision together with the first sentence of Section 8.01, subdivision 2, the charter leaves almost no authority to undertake street maintenance at all. Section 8.01, subdivision 2 indicates that all improvements funded with general 327632v3 SJB LN140 -86