Special Assessments FAQ
City policy strives to create equity among all property owners. On average, approximately 25-35% of street project costs are paid through special assessments. On average, approximately 65-75% of street project costs are paid through federal funds, MSA funds, and property taxes.
Primary Benefit Rates
- Paid for the street you abut/access (typically the short side of the property)
- Assessment rates ($/adjusted front foot) are based on type of project (mill & overlay, rehabilitation, reconstruction) and set by City Council annually
Secondary Benefit Rates
- Paid for minor arterial and collector streets
- Higher volume streets that “connect” you to other parts of the City
- Every property participates in projects associated with two collector/minor arterial streets (typically one North-South and one East-West)
- Assessment rate ($/equivalent single family property) is fixed, regardless of project type
It depends on the type of the project:
- Mill & overlay projects typically take 2 to 4 weeks
- Rehabilitation projects (full pavement replacement, keeping existing curb & gutter) typically take 6 to 10 weeks
- Full reconstruction projects (with curb & gutter replacement) typically take 12 to 16 weeks
- Continued street deterioration
- Increased wear & tear on vehicles
- Increased maintenance costs for the City (paid via property taxes)
- Unsafe conditions
- Damage to underground utilities
- Higher future special assessments
- More expensive repair (for example reconstruction instead of rehabilitation)
- Increased construction costs (due to inflation)
- Continued street deterioration
- Federal funds. The City competes with five other cities in Mn/DOT District 4 for approximately $1.2M in federal funding annually. Historically, the City has received the equivalent of $0.5-0.6M per year
- Municipal State Aid (MSA) funds. The City receives approximately $1M annually
Federal and MSA funds can only be spent on minor arterial and collector streets. The City uses these funds to offset or reduce special assessments and/or property tax funds spent on street projects. MSA funds are also used as a local match (20%) for Federal appropriations (80%) for larger projects with citywide benefit.
- Local funds
- City-wide Property tax collections
- Special assessments to properties in the benefiting area
- The final assessment hearing is typically held after the project has been completed and all costs are known. Property owners will receive a final assessment letter stating the final assessment hearing date and payment options. The first assessment payment is due with property taxes the year following the final assessment hearing. Partial or full payments can be made after the final assessment hearing.
- The City has approximately 200 miles of streets to maintain. In a typical year, the City must complete between seven and ten miles of major maintenance projects (mill & overlay, full pavement rehabilitation, and complete road reconstruction.)
Federal and MSA funding is insufficient, limited to certain streets, and/or requires a local match (20%).
The City does not maintain a capital improvement fund sufficient to “pay cash” for street projects. A “cash” fund for street projects would at least double property taxes.
The City bonds (or borrows) money to pay for street projects. State statute requires that at least 20% of the project cost be special assessed.