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HomeMy WebLinkAbout04-14-2005 Mounds View Charter Commission April 14,2005 • Mounds View Charter Commission Minutes Meeting April 14,2005 1. Call to order -The meeting came to order at 7:08 PM 2. Roll Call—Present- B.Amundsen, B. Doty,M. Eenigenburg,B.Mori, B. Thomas, J. Thomas, William Werner, Sr Absent— Excused -J. Miller 3. Approval of agenda and minutes Motion by B.Amundsen, second by B. Mori to approve agenda as amended for sequence of items. UNANIMOUSLY APPROVED Motion by B.Doty, second by B. Thomas to approve minutes of March 10, 2005 as submitted. UNANIMOUSLY APPROVED 4. Citizens comments from the floor None 5. Reports of the Chair Court has approved Carol Miler to Charter Commission, but she has to confirm oath. Nene 11111 6. Reports of members Bill Werner—re: Decision Resources survey of citizens and the reported survey result that respondents support a referendum if levy increases more than 6.9%. He offered it as evidence that the community would support a referendum for levy limits. Barbara Thomas—House has approved statewide initiative and referendum language,the Senate has to act before it would go to the Governor and the ballot. 7. Unfinished Business a. Review Resolution 2005-04 and Chapter 5.05 language-B.Amundsen presented corrected resolution language, corrected Chapter 5.05 language, and a flow chart of the language. Chairman J. Thomas suggested the Commission not discuss the material but that everyone take and review for next meeting. Mewed. -bp tow.#rust, 404.* M. t enc aS w iwu�1►J btiMker , E b. Election Of Officers. -Motion by B. Thomas, second by M. Eenigenburg to nominate, as a slate,the current officers for an additional two year term. Discussion followed and Chair J. Thomas said he spoke with J. Miller and she is willing to serve for two more years. AYES—6 NAYS— 1, APPROVED c. Section 8.04 Reviews—Review and Discuss Special Assessment Percentage Barb Thomas shared a number of reference documents; MN Statutes Chapter 429. 429.021-.04,429.051, excerpts from"Handbook for Minnesota Cities"Chapter 26, and a House Research Department article on Special Assessments printed in February 2004. Discussion followed about current Mounds View Charter language of benefited property owners versus MN Statutes. Chair J. Thomas suggested the 11111 Page 1of2 Mounds View Charter Commission April 14,2005 Commission halt discussion of the material and everyone take"for review befor�next • meeting. .. •._ . .. Mdved�cav�t:v►M+t a n ;,„f •.. . ..less d. Section 7.10 Review and Discuss materia s a`ouu ob�igation .ons - Bill Mori distributed copies of other community charters;Anoka, Ham Lake, and St. Cloud; along with the League of Minnesota Cities Model Charter for financing and bonding of city indebtedness. Discussion followed. Members consensus requested Chapter 7.10 language be distributed with next minutes for discussion at next meeting. " ': -: G Otoveek 4 eavWro►t odr rwy�w.ea+4:w a� wr.�etwlSl�•rt 0c sU ec 8. New Business Set next month and future agenda items. a. Review and Discussion of Resolution 2005-04 for Section 5 Initiative& Referendum b. Review and Discussion of Section 8.04 Special Assessments c. Review and Discussion of Section 7.10 Obligation Bonds 9. Adjournment Meeting adjourned at 8:45 PM Respectfully submitted, Brian Amundsen, Secretary (146- aittiliKeU ovk A912 Zov S" • lok • • Page 2 of 2 • City of -Iounds Resolution No. 2005-04 View Mounds View Charter Commission Dated April 14, 2005 Whereas, the Mounds View Charter Commission is reviewing the lists of past Charter Commission request for housekeeping and clarification updates to sections of the Mounds View Charter that have caused confusion or seem to be semantically incorrect. Chair Jonathan J Thomas The Mounds View Charter Commission acting under Minnesota Statute 410.12 763-784-5205 Subdivision 7, recommends the following amendments by the addition of the bold Vice Chair and double underline language and by deletion of the language. Bill Doty The Mounds View Charter Commission request the City Council adopt by ordinance 763-786-3421 those items where there is unanimous agreement. We also request a response within 60 days with recommendations for modifications to any item that the City Council 2nd Vice Chair Jean Miller deems not acceptable as presented. 763-786-3959 Charter Commission Objective(s) (not inclusive of all language changes): Secretary 1) Response to request made by the City Council to provide both marked up and Brian Amundsen proposed version of the text be submitted. 763-786-5699 2) Throughout the Chapter clarify Mounds View resident terminology usage so Matthew Eenigenburg that references are more consistent rather than having references to"people of • 763-783-7216 Mounds View", "registered voters", "citizens of Mounds View", and "voters". William Mori 3) Section 5.01 define the term "voter". 763-784-3645 4) Section 5.02 clarify committee size and membership requirement, and Barbara Thomas petition signer requirement. 763-780-6226 5) Section 5.03 clarify the process and requirements for sufficiency. 6) Section 5.04 clarify the process for insufficient petitions. William Werner Sr 7) Section 5.05 clarify the process for Initiative and process time line. 763-784-3603 8) Section 5.06 correct"electors"to "voters". 9) Section 5.07 correct"into operations"to"enactment", correct"electors"to "voters", assure Chapter 4 applies to setting of election ballot. 10) Section 5.08 clarify requirements for"Recall", time line for actions of Clerk-Administrator, council member, and Council. The entire Chapter 5 amendments recommended for consideration and unanimous approval are attached to this resolution. For ease of readability a fully modified and unmarked version of the proposed language is attached. Respectfully submitted, Johnathan Thomas, Chair Brian Amundsen, Secretary • DRAFT Resolution 2005-04 Page 1 of 4 Minnesota Statutes 2004, Chapter 429. q `is Page 1 of 1 4 ==429.051 429.051 Apportionment of cost. . The cost of any improvement, or any part thereof, may be assessed upon property benefited by the improvement, based upon the benefits received, whether or not the property abuts on the improvement and whether or not any part of the cost of the improvement is paid from the county state-aid highway fund, the municipal state-aid street fund, or the trunk highway fund. The area assessed may be less than but may not exceed the area proposed to be assessed as stated in the notice of hearing on the improvement, except as provided below. The municipality may pay such portion of the cost of the improvement as the council may determine from general ad valorem tax levies or from other revenues or funds of the municipality available for the purpose. The municipality may subsequently reimburse itself for all or any of the portion of the cost of a water, storm sewer, or sanitary sewer improvement so paid by levying additional assessments upon any properties abutting on but not previously assessed for the improvement, on notice and hearing as provided for the assessments initially made. To the extent that such an improvement benefits nonabutting properties which may be served by the improvement when one or more later extensions or improvements are made but which are not initially assessed therefor, the municipality may also reimburse itself by adding all or any of the portion of the cost so paid to the assessments levied for any of such later extensions or improvements, provided that notice that such additional amount will be assessed is included in the notice of hearing on the making of 11/1 such extensions or improvements. The additional assessments herein authorized may be made whether or not the properties assessed were included in the area described in the notice of hearing on the making of the original improvement. In any city of the fourth class electing to proceed under a home rule charter as provided in this chapter, which charter provides for a board of water commissioners and authorizes such board to assess a water frontage tax to defray the cost of construction of water mains, such board may assess the tax based upon the benefits received and without regard to any charter limitation on the amount that may be assessed for each lineal foot of property abutting on the water main. The water frontage tax shall be imposed according to the procedure and, except as herein provided, subject to the limitations of the charter of the city. HIST: 1953 c 398 s 5; 1955 c 842 s 1; 1957 c 40 s 1; 1959 c 490 s 1; 1961 c 286 s 1 • • http://www.revisor.leg.state.mn.us/bin/getpub.php?pubtype=STAT CHAP&year=current&ch... 4/14/2005 House Research Department February 2004 Special Assessments Page 9 • other miscellaneous funds and sources. As with special assessments, the revenue collected may be used to pay for the improvement directly or to repay the bonds issued to pay the costs of the improvements. How Are Special Assessments Different from Property Taxes? Special assessments are a form of taxation and may be paid using the same mechanism and at the same time as property taxes. However, there are a number of differences between them: • the basis for determining the amount charged • what real property is subject to the charge • whether personal property may be charged • whether there are any statutory limits • deductibility for income tax purposes Market value v. benefit. Property taxes are based on the market value of the property—ad valorem taxes. Special assessments, on the other hand, are determined without regard to cash valuation. They are based on the benefit to the property. The formula used by a local government to determine how much of a project or service will be paid for by special 0 assessments will typically use factors such as per foot of frontage amount after finding that the improvement provides substantially the same benefit on that basis to adjacent properties. Whatever factors are used, the formula used must approximate a market analysis for the specific local improvement's For example, two houses located in the same taxing jurisdictions, one with an estimated market value of$200,000 and one with estimated market value of$500,000, pay significantly different property taxes. But if each home had 150 feet of frontage on the street, and the city was installing curb and gutter to that street,both homes would pay the same amount for the assessment for the improvements since the assessment charge is based on footage and not on the market value of the property. Taxable property v. all real property. Property taxes can be levied only on taxable property, but special assessments are imposed on nearly all real property that is benefited. The state constitution does not exempt any property from special assessments for local improvements. Any exemption must be statutory and there are few exceptions.' 25 Bisbee v. City of Fairmont, 593 N.W.2d 714,719(Minn.App. 1999)(special assessment was invalid on its face because front-footage method calculation based on average costs of projects from prior years did not approximate a market analysis and was unrelated to particular costs). 26 State v. Roselawn Cemetery Assn.,259 Minn.479,481, 108 N.W.2d 305(1961)(tax-exempt property subject to special assessment unless statutorily exempted as is cemetery property under specified circumstances 111 under Minn. Stat. §§ 306.14,307.09);but note that federal property is exempt,Op. Atty. Gen.408-C(Sept.21, 1953). Several statutes specify that one governmental unit must pay special assessments imposed by another. See, e.g., Minn. Stat. §473.448 (the Metropolitan Council's transit operations or special transportation services are exempt from all taxation,licenses,or fees imposed by the state or by any political subdivision but are subject to I • CHAPTER 26 B. Relation of special assessments to market value Special assessments reflect the influence of a specific local improvement on the value of specific property. No matter what method the city uses to establish the amount of the assessment, the real measure of benefits is the increase in the market value of the land as a result of the improvement. Buettner v. City of St. Cloud,277 A special assessment that exceeds the special benefit is a taking of the N.W.2d 199(Minn. 1979). property without fair compensation in violation of the Fourteenth Southview Coun0,Club.v.City of Amendment of the United States Constitution.Article X, Section 1 of the Inver Grove Heights,263 N.W.2d lover (Minn. 1978). Minnesota Constitution reads in part as follows: "The legislature may 385authorize municipal corporations to levy and collect assessments for local improvements upon property benefited thereby without regard to cash Minn.Const.art X,§ 1. valuation."As the courts have made clear, the special benefit is the increase in market value of the land as a result of the improvement. Minn.Stat.§429.081. A property owner may appeal a special assessment to district court if the Minn.Stat.§429.061. owner files a signed written objection with the city clerk prior to the assessment hearing or with the presiding officer at the hearing. The district 0 court determines de novo any special benefit due to the improvement. Buzick v. City of Blaine,505 Special assessments are presumptively valid if the land assessed receives a N.W.2d 51 (Minn. 1993). special benefit from the improvement, the assessment is uniform as applied Schumacher v. City ofExcelsior, to the same class of property, and the assessment does not exceed the special 427 N.W.2d 235(Minn. 1988). benefit. The special benefit is measured by the increase in the market value Tri-State Land Co.v. City of of the land due to the improvement. The assessment roll constitutes prima Shoreview,290 N.W.2d 775 facia proof that an assessment does not exceed a special benefit, and the (Minn. ]980). party contesting the assessment must introduce evidence sufficient to Ewert v.City of Winthrop,278 overcome the presumption. If the evidence is conflicting and there is an N.W.2d 545(Minn. 1979), appeal of the amount of a special assessment, it is the responsibility of the district court to determine whether the assessment exceeds the market value increase and,if so, by what amount. Property owners are appealing special assessments to district court with greater frequency. Thus it is imperative at the hearing on the assessments for the city to present direct evidence of the benefit in the form of expert testimony by a person qualified to appraise real estate, and determine the increase in market value as a result of the improvement. The evidence presented by the city must fairly support a finding that the market value will increase at least as much as the amount of the proposed assessment. HANDBOOK FOR MINNESOTA CITIES 26-5 This chapter last revised 12/15/2004 T CHAPTER 26 Anderson v.City of Bemidji,295 When a court determines whether the evidence defeats the presumption that N.W.2d 555(Minn.1980). the benefit exceeds the assessment,the city is not required to show that the Village of Edina v.Joseph,264 special assessment corresponds exactly to the benefits received.The Minn.84, 119 N.W.2d 809(Minn. assessments,however,must be roughly proportionate to the benefits 1962). accruing to each property as a result of the improvement. And,the benefits should be uniform as to the same class of property. Johnson v.City of Eagan,584 When a court disallows a portion of an assessment where the disallowed N.W.2d 770(Minn.1998). portion was in excess of the benefit to the property assessed,the city may In re Village of Burnsville,310 not try to recoup the disallowed amount through another method—such as by Minn.32,245 N.W.2d 445(1976). imposing a utility lateral benefit charge on only that property and not on the other properties involved in the assessment. When the cost of an improvement exceeds the benefit,the difference must not be borne by a particular property,but instead by the city as a whole. Nordgren v. City of Maplewood Although the Minnesota Supreme Court has held that connection charges are 326 N.W.2d 640(Minn. 1982). not assessments and may be imposed on top of prior assessments,one Court Drawer v.Spring Lake Township, of Appeals decision held that the cost of the connection charges should be 2001 WL 1464455,co-01-370 included with the amount of special assessments in determining the special (Minn.Ct.App.Nov.20,2001) benefit to the property. (connection charges). • Cities that finance local improvements by special assessments must use great care in conducting proceedings. Before ordering an improvement,the council should gather as much evidence as possible on whether the benefits of a particular improvement sufficiently justify the cost. But the council must also determine the increases in market value to the benefited property. If voters have petitioned for an improvement, and the benefit does not substantially exceed the cost, a council might use different strategies depending on its objectives and the potential for appeals. Minn.Stat.§429.081. The council could,under certain circumstances, obtain waivers of rights to Minn.Stat.§462.3531. appeal before entering into the contract and ordering the improvement. That plan may be feasible only if the assessable area is small. Also, any waiver of rights is effective only for the amount of assessment estimated or for the assessment amount agreed to in a developer's agreement. An effective waiver of rights of appeal may contain additional conditions providing for the increases in assessments that will not be subject to appeal,under the provisions specified in the law. HANDBOOK FOR MINNESOTA CITIES 26-7 This chapter last revised 12/15/2004 • f • CHAPTER 26 The advantages of special assessment financing include the following: • Special assessments have been a dependable source of revenue. • Special assessments are a means of raising money outside city debt and general property taxes. (Special assessment bonds do not count toward statutory debt limitations.) • Special assessments provide a means of levying charges for public services against property otherwise exempt from taxation. • Special assessments lower the cost to the community of bringing undeveloped land into urban use, and of increasing the usefulness of urban land. • Perhaps the chief value of special assessments is that by charging the property owner for the benefit received, they prevent or minimize the possibility that a property owner will reap a financial profit from the improvement at the expense of the general taxpayer. The disadvantages of special assessment include the following: • The difficulty in establishing the special benefit to the property. 1110 • The difficulties in special assessment administration. In addition to the subjective difficulty of relating assessment charges to special benefits, the administrative procedures require careful execution in order to avoid court litigation. While assessment determinations necessarily involve judgment,many communities have instituted procedures making this determination as objective as possible. • Cities have frequently used special assessments to underwrite premature public improvements. Because the city generally bears some of the cost of every public improvement, land speculators sometimes urge councils to do unjustifiable special assessment programs. • The availability of special assessment financing often tempts city officials to underwrite the cost of governmental programs that should be an obligation of the entire city. • HANDBOOK FOR MINNESOTA CITIES 26-9 This chapter last revised 12/15/2004 • i • CHAPTER 26 D. Alternate cost apportionment procedures See Parts IB and IIB8 of this Because of recent court decisions,unless all the property owners have Chapter for a complete discussion signed a waiver of appeal of the special assessments,the city should conduct of this issue. "before and after"market improvement valuation studies concerning the proposed assessment area in order to determine the amount of special benefits. The assessment cannot exceed the special benefits to the property measured by the difference in market value before and after the improvements. E. Exempt property Minn.Stat.§429.061,subd.4. Although the levying of special assessments is in some ways an exercise of Diocese of St.Paul v.City of St. the taxing power,the tax exemptions the Constitution grants to religious, Paul, 138 Minn.67,163 N.W.978 charitable, and educational institutions do not prevent special assessments (1917). against their property. Private cemeteries, churches,hospitals, schools, and Ramsey County v. Trustees of similar institutions must pay special assessments. Railroads in Minnesota are Macalester College,87 Minn. 165, not exempt from special assessments. 91 N.W.484(1902). 41111 Washburn Mem'1 Orphan Asylum v.State,73 Minn.343,76 N.W. 204(1898). Minn.Stat.§306.14,subd.2 Public cemeteries are exempt from special assessments, although there are (subjecting profit-making some limited circumstances under which cemeteries may be subject to cemeteries to special assessments). special assessments. Minn.Stat.§307.09. Additionally, land dedicated as a private cemetery by a private person or a religious corporation is exempted to a certain extent. Minn.Stat.§435.19. With the exception of land the United States government owns, cities may levy special assessments against the property of any other government units to the same extent as if the property were privately owned. For this purpose, "governmental unit"refers to all cities (except Minneapolis, St. Paul, and Duluth),towns, school districts,public corporations, and counties. If the unit does not pay the amount of an assessment against it,the city may recover the money in a civil action. HANDBOOK FOR MINNESOTA CITIES 26-31 This chapter last revised 12/15/2004 6c-Ce Gly Minnesota Statutes 2004, Chapter 429. Page 5 of 26 the same street or streets or different streets may be included in one proceeding and conducted as one improvement. • Subd. 3. Relation to charter and other laws. When any portion of the cost of an improvement is defrayed by special assessments, the procedure prescribed in this chapter shall be t2 followed unless the council determines to proceed under charter provisions; but this chapter does not prescribe the procedure to ,I'' be followed by a municipality in making improvements financed without the use of special assessments. If the council determines to proceed under charter provisions for special assessments, such provisions shall be deemed to include a requirement that notices of proposed assessments inform property owners of the procedures they must follow under the charter in order to appeal the assessments to district court. The notices shall also inform property owners of the provisions of sections 435.193 to 435.195 and the existence of any deferment procedure established pursuant thereto in the municipality. Charter provisions shall also be deemed to require that when the council determines to make any improvement, it shall let the contract for all or part of the work, or order all or part of 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. 1111 HIST: 1953 c 398 s 2; 1965 c 877 s 1; 1971 c 617 s 5; 1973 c 201 s 1; 1974 c 233 s 2; 1974 c 314 s 1; 1976 c 195 s 1; 1978 c 518 s 1; 1979 c 330 s 2; 1981 c 334 s 5; 1984 c 548 s 4; 1984 c 582 s 3; 1984 c 591 s 2; 1984 c 633 s 2; 1987 c 138 s 2; 1997 c 219 s 5; 2000 c 490 art 5 s 31; 2000 c 493 s 5 ==429.03 429.03 Repealed, 1953 c 398s 13 subd 1 ==429 .031 429.031 Preliminary plans, hearings. Subdivision 1. Preparation of plans, notice of hearing. (a) Before the municipality awards a contract for an improvement or orders it made by day labor, or before the municipality may assess any portion of the cost of an improvement to be made under a cooperative agreement with the state or another political subdivision for sharing the cost of making the improvement, the council shall hold a public hearing on the proposed improvement following two publications in the newspaper of a notice stating the time and place of the hearing, • the general nature of the improvement, the estimated cost, and the area proposed to be assessed. The two publications must be a week apart, and the hearing must be at least three days after the second publication. Not less than ten days before the hearing, notice of the hearing must also be mailed to the owner of each parcel within the area proposed to be assessed and must H..•/A„,„n„ra,norr 1Prt ctata mn „c/hin/vPtn„h nhn7niihtvne=STAT CHAP&vear=current&ch... 4/14/2005 Minnesota Statutes 2004, Chapter 429. Page 6 of 26 contain a statement that a reasonable estimate of the impact of the assessment will be available at the hearing, but failure to • give mailed notice or any defects in the notice does not invalidate the proceedings. For the purpose of giving mailed notice, owners are those shown as owners on the records of the county auditor or, in any county where tax statements are mailed by the county treasurer, on the records of the county treasurer; but other appropriate records may be used for this purpose. For properties that are tax exempt or subject to taxation on a gross earnings basis and are not listed on the records of the county auditor or the county treasurer, the owners may be ascertained by any practicable means, and mailed notice must be given them as provided in this subdivision. (b) Before the adoption of a resolution ordering the improvement, the council shall secure from the city engineer or some other competent person of its selection a report advising it in a preliminary way as to whether the proposed improvement is necessary, cost-effective, and feasible and as to whether it should best be made as proposed or in connection with some other improvement. The report must also include the estimated cost of the improvement as recommended. A reasonable estimate of the total amount to be assessed, and a description of the methodology used to calculate individual assessments for affected parcels, must be available at the hearing. No error or omission in the report invalidates the proceeding unless it materially prejudices the interests of an owner. (c) If the report is not prepared by an employee of a • municipality, the compensation for preparing the report under this subdivision must be based on the following factors: (1) the time and labor required; I (2) the experience and knowledge of the preparer; (3) the complexity and novelty of the problems involved; 'and (4) the extent of the responsibilities assumed. (d) The compensation must not be based primarily on a percentage of the estimated cost of the improvement. (e) The council may also take other steps prior to the hearing, including, among other things, the preparation of plans and specifications and the advertisement for bids that will in its judgment provide helpful information in determining the desirability and feasibility of the improvement. . YcY14r) (f) The hearing may be adjourned from time to time, and a 'X ��" resolution ordering the improvement may be adopted at any time within six months after the date of the hearing by vote of a11 majority of all members of the council when the improvement has \4' been petitioned for by the owners of not less than 35 percent in frontage of the real property abutting on the streets named in • the petition as the location of the improvement. When there has been no such petition, the resolution may be adopted only by vote of four-fifths of all members of the council; provided that if the mayor of the municipality is a member of the council but has no vote or votes only in case of a tie, the mayor is not httn://www.revisor.leg.state.mn.us/bin/getpub.php?pubtype=STAT_CHAP&year=current&ch... 4/14/2005 Minnesota Statutes 2004, Chapter 429. Page 7 of 26 deemed to be a member for the purpose of determining a four-fifths majority vote. • (g) The resolution ordering the improvement may reduce, but not increase, the extent of the improvement as stated in the notice of hearing. Subd. 2 . Approval by park board or utilities commission. A resolution ordering a park improvement may be adopted only by a four-fifths vote of the council and shall also be approved by the park board, if there is one; provided, that if the mayor of the municipality is a member of the council but has no vote or votes only in case of a tie, the mayor shall not be deemed to be a member for the purpose of determining such four-fifths majority vote. A resolution ordering an improvement of the water, sewer, steam heating, street lighting or other facility over which a utilities commission has jurisdiction shall also be approved by the utilities commission. Subd. 3 . Petition by all owners. Whenever all owners of real property abutting upon any street named as the location of any improvement shall petition the council to construct the improvement and to assess the entire cost against their property, the council may, without a public hearing, adopt a resolution determining such fact and ordering the improvement. The validity of the resolution shall not be questioned by any taxpayer or property owner or the municipality unless an action for that purpose is commenced within 30 days after adoption of the resolution as provided in section 429.036. Nothing herein • prevents any property owner from questioning the amount or validity of the special assessment against the owner's property pursuant to section 429.081. In the case of a petition for the municipality to own and install a fire protection system, a pedestrian skyway system, or on-site water contaminant improvements, the petition must contain or be accompanied by an undertaking satisfactory to the city by the petitioner that the petitioner will grant the municipality the necessary property interest in the building to permit the city to enter upon the property and the building to construct, maintain, and operate the fire protection system, pedestrian skyway system, or on-site water contaminant improvements. In the case of a petition for the installation of a privately owned fire protection system, a privately owned pedestrian skyway system, or privately owned on-site water contaminant improvements, the petition shall contain the plans and specifications for the improvement, the estimated cost of the improvement and a statement indicating whether the city or the owner will contract for the construction of the improvement. If the owner is contracting for the construction of the improvement, the city shall not approve the petition until it has reviewed and approved the plans, specifications, and cost estimates contained in the petition. The construction cost financed under section 429 .091 shall not exceed the amount of the cost estimate contained in the petition. In the case of a petition for the installation of a fire protection system, a pedestrian skyway system, or on-site water contaminant improvements, the petitioner may request • abandonment of the improvement at any time after it has been ordered pursuant to subdivision 1 and before contracts have been awarded for the construction of the improvement under section 429.041, subdivision 2 . If such a request is received, the city council shall abandon the proceedings but in such case the httn://www.revisor.leg.state.mn.us/bin/getpub.php?pubtype=STAT_CHAP&year=current&ch... 4/14/2005 4 Minnesota Statutes 2004, Chapter 429. Page 8 of 26 petitioner shall reimburse the city for any and all expenses incurred by the city in connection with the improvement. • HIST: 1953 c 398 s 3; 1955 c 811 s 1; 1957 c 430 s 1; 1961 c 525 s 1,2; 1963 c 771 s 1; 1965 c 877 s 2; 1967 c 57 s 1,2; 1973 c 123 art 5 s 7; 1984 c 548 s 5; 1984 c 582 s 4; 1984 c 591 s 3; 1984 c 633 s 3; 1986 c 444; 1994 c 614 s 6; 1996 c 402 s 1; 2000 c 490 art 5 s 32 ==429.035 429.035 Improvements, petition. When any petition for the making of any improvement in any statutory city, town, or city of the second, third, or fourth class, however organized, for the cost of which special assessments may be, in whole or in part, levied therefor, is presented to the governing body of the municipality, this body shall, by resolution, determine whether or not the petition has been signed by the required percentage of owners of property affected thereby. HIST: (1918-33) 1927 c 311 s 1; 1953 c 398 s 12; 1961 c 338 s 2; 1973 c 123 art 5 s 7 ==429.036 • 429.036 Appeal from determination of legality of petition. Any person, being aggrieved by this determination, may appeal to the district court of the county in which the property is located by serving upon the clerk of the municipality, within 30 days after the adoption and publication of the resolution, a notice of appeal briefly stating the grounds of appeal and giving a bond in the penal sum of $250, in which the municipality shall be named as obligee, to be approved by the clerk of the municipality, conditioned that the appellant will duly prosecute the appeal, pay all costs and disbursements which may be adjudged against the appellant, and abide by the order of the court. The clerk shall furnish the appellant a certified copy of the petition, or any part thereof, on being paid by appellant of the proper charges therefor. The appeal shall be placed upon the calendar of the next general term commencing more than 30 days after the date of serving the notice and filing the bond and shall be tried as are other appeals in such cases. Unless reversed upon the appeal, the determination of the governing body as to the sufficiency of the petition shall be final and conclusive. • HIST: (1918-34) 1927 c 311 s 2; 1986 c 444 . ==429.04 429.04 Repealed, 1953 c 398 s 13 http://www.revisor.leg.state.mn.us/bin/getpub.php?pubtype=STAT_CHAP&year=current&ch... 4/14/2005 CHAPTER 26 1. Initiation of proceedings Minn.Stat.§429.031. Either the council or a petition from affected property owners may initiate proceedings. If a petition, it must have the signatures of the owners of at least 35 percent in frontage of the property bordering the proposed improvements. If the council acts on its own initiative, an extraordinary majority is not necessary to initiate the proceedings. (A four-fifths vote will be required to pas the subsequent resolution ordering the improvement). 2. Preparation of a report Minn.Stat.§429.031,subd. 1(b). The law requires the city engineer or another competent person to prepare a feasibility report on the proposal. The report must cover such factors as whether the project is necessary,the availability of necessary money in the general fund to pay the city's share of the cost, an estimate of that cost, whether the improvement is cost effective, and any other information necessary for council consideration. The report must also include the estimated cost of the improvement as recommended. A reasonable estimate of the total amount to be assessed, and a description of the methodology used to calculate individual assessments • for affected parcels, must be available at the hearing. 3. Public hearing Minn.Stat.§429.031,subd 3. The council may omit this step if 100 percent of the affected land owners sign the petition requesting the improvement. Minn.Stat.§429.031,subd. 1(a). The city must publish notice of a hearing on the proposed improvement twice in the official newspaper,with the notices appearing at least one week apart. At least three days must elapse between the last publication date and the date of the hearing. Minn.Stat.§429.031,subd. 1(a). The city must mail a notice to each property owner in the proposed assessment area, at least 10 days prior to the hearing,that states the time and place of the hearing, the general nature of the improvement, and the estimated cost. Failure to give notice of this improvement hearing will invalidate subsequent assessment proceedings. Minn.Stat.§429.031,subd. 1(b). The notice must contain a statement that a reasonable estimate of the impact of the assessment will be available at the hearing. A reasonable estimate of the total amount to be assessed, and a description of the methodology used to calculate individual assessments for affected parcels, must be available at the hearing as well. • 26-16 HANDBOOK FOR MINNESOTA CITIES This chapter last revised 12/15/2004 House Research Department February 2004 Special Assessments Page 5 • A special assessment that does not meet these requirements is an unconstitutional taking.' The benefit is measured by the difference between what a willing buyer would pay a willing seller for the property before and after the improvement,based on the highest and best use of the land.10 Present use of the land is not the controlling factor." The assessment roll is prima facie evidence that the assessment does not exceed the special benefit. The contesting party has the burden of introducing competent evidence to overcome this presumption.'2 Procedure to Impose Special Assessments Minnesota Statutes, chapter 429, specifies the procedures that must be followed in order to use special assessments.13 Local governments must be careful to follow all of the necessary steps to insure that the assessments are properly imposed to avoid legal challenges from the landowners. The following summarizes the procedure as if it has three phases. Although the statutes do not refer to phases, it may be easier to understand the complicated process this way. 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 Assessment14 • 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. 9 Southview Country Club v. City of Inver Grove Heights, 263 N.W.2d 385,387-388(Minn. 1978) (citing Carlson-Lang Realty Co. v. City of Windom,307 Minn.368,369,240 N.W.2d 517, 519(1976); Quality Homes, Inc. v. Village of New Brighton,289 Minn. 274, 183 N.W.2d 555(1971);In re Improvement of Superior Street,Duluth, 172 Minn.554,559,216 N.W.318,320(1927)). 10 Eagle Creek Townhomes,LLP v. City of Shakopee,614 N.W.2d 246,250(Minn.App.2000)review denied (Sept. 13,2000)(citing EHW Properties v. City of Eagan, 503 N.W.2d 135, 139(Minn.App. 1993)and Buzick v. City of Blaine,491 N.W.2d 923,925 (Minn.App. 1992),aff'd 505 N.W.2d 51 (Minn. 1993)). "Anderson v. City of Bemidji,295 N.W.2d 555, 560(Minn. 1980). 12 Buzick v. City of Blaine, 505 N.W. 2d 51, 53 (Minn. 1993)(citing Tri-State Land Co. v. City of Shoreview, 290 N.W.2d 775,777(Minn. 1980)). • 13 Chapter 429 does not prescribe the procedures to be followed by a municipality in making improvements financed without the use of special assessments. Minn.Stat. § 429.021, subd.3. 14 Minn. Stat. §429.031. House Research Department February 2004 Special Assessments Page 7 • 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. If any of the assessments contained in the final roll are different than the proposed assessments, the local government must mail a notice to the property owner stating the new amount.16 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.19 Home rule charter cities: special note. If a city is following procedures set in its charter, a few of the statutory provisions still apply. Specifically, if a city proceeds under its charter provisions, it must give property owners notice of the procedures they must follow under the charter in order to appeal the assessments to district court. The notice must also inform property owners of any deferment procedure established by the municipality.20 A city proceeding under its charter must 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. 16 Minn. Stat. §429.061,subd. 2. 17 Minn. Stat. §429.091. '8 Minn. Stat. §429.061,subd. 3. • 19 Minn. Stat. §429.041,subd. 1. 20 Minn. Stat. §429.021,subd..3 (referring to Minn. Stat. §§ 435.193 to 435.195 described on page 9).