Special assessment Guide Presented By Claire Baartman, Finance Officer Justin Weiland, City Administrator City of Dell Rapids, SD

Special Assessments Definitions: Special assessment: The term used in the United States to designate a unique charge that government units can assess against real estate parcels for certain public projects such as construction and maintenance of local improvements. Special Assessment District (SAD): A specific geographic boundary of the area where the construction and maintenance of local improvements will take place. (SDCL 9-43-128) Local improvement: The process of building, altering, repairing, improving, or demolishing any local infrastructure facility, including any structure, building, or other improvement of any kind to real property… (SDCL 9-43-75). Special Benefit: The benefit gained on real estate as a result of the construction and maintenance of local improvements. QuickStarter has created an outline to help you get started on your presentation. Some slides include information here in the notes to provide additional topics for you to research.

Contents Where to Begin Resolution of Necessity Process Plans and Specs Bid, Award & Construction Assessment Roll & Notice of Hearing Approval and Levy of Assessments Special Record Mailing to Property Owners Collection

CAUTION!!! We are not experts in Special Assessments These are recommendations based on our experience. Always follow State Statute Always check with your CITY ATTORNEY

Special Assessment: When? Local Improvement Property Benefitted – Must Pass the Special Benefit Test Funding Mechanism City Driven or Property Owner Driven

Special Assessment: Project Examples Public Infrastructure Infrastructure for undeveloped areas – Infrastructure maintenance and replacement in existing neighborhoods. Infrastructure has aged and needs replacement. Water Main Installation / Replacement Sewer Main Installation / Replacement Storm Sewer Improvements Curb and Gutter Installation Sidewalk Installation Street Surfacing Improvements Inclusive of sub surface improvements Able to include Engineering Costs Associated With Project Special Assessment: Project Examples

Special Assessment: Pros & cons Dependable Source of Revenue for the project Revenue Source that does not count towards Debt Limit A means to tax a specific property for improvements abutting their property and not the entire community Helps the City to plan for future infrastructure improvements (Capital Improvement Plan recommended) Special Assessment Cons: The process and administration of Special Assessments is difficult and time consuming What improvements are assessable is sometimes difficult to determine (Adopt an Assessment Policy) Determining the Special Benefit Test is sometimes difficult to prove Property Owners reactions to Special Assessments is not always positive (Over Communicate) Special Assessment: Pros & cons

WHERE TO BEGIN: Identify project Identify Scope of Public Improvement Project Local Improvement – Make Sure it is assessable/benefit Gain Political Support of Council and Mayor Begin Preliminary Engineering to Calculate Cost Estimates. Property Owners will want to know costs to property Adopt a Special Assessment Policy for your Jurisdiction

WHERE TO BEGIN: Hold a Public Informational Meeting to inform those that will be impacted. START EARLY!!! Provide Affected Property Owners with Information maps, costs, preliminary plans, benefits Gain Property Owner insight through discussion and comments. Incorporate comments and desires into design. Get Property Owners on Board with the Improvement!

Where to begin: Communication A Public Meeting is not a required step of the Special Assessment process. However communication with affected property owners will increase chances of support and success.

WHERE TO BEGIN: Funding Identify Funding Source(s) City Funds, Loans, Grants, Special Assessments, Etc… Secure Funding Source(s) Dell Rapids has utilized DENR STATE WATER PLAN for Utility Replacement/Installation Costs. Grant and Loans. Dell Rapids has utilized various DOT programs to assist with funding surfacing improvements. Rural Development Grants and Loans and various other funding programs exist. WHERE TO BEGIN: Funding

RESOLUTION OF NECESSITY Calculation of Special Assessment (SDCL 9-43-78) Engineering Firm calculates costs to benefitted properties. Utilize Special Assessment Policy to dictate the calculation of Special Assessments. Deferred Assessment – Property Outside of Municipal Boundaries/Other Special Requests Send Properties Owners a “Worst Case Scenario” Cost Emphasize Costs are Estimates - Property Owners will be responsible for Actual Bid Costs

RESOLUTION OF NECESSITY Consider Holding another Public Meeting – Round Table Have Plans Available for Review Engineers Available to Answer Questions Explain the Assessment Process Comment Cards Continued Communication – Build Trust

Resolution of necessity Proposed Resolution of Necessity (SDCL 9-43-82) Notice of Hearing (SDCL 9-43-83) Mailing to Property Owners (SDCL 9-43-84) Certified Mail Include Individual Property Cost Breakdowns Include Resolution Include Public Hearing Notice Public Hearing (SDCL 9-43-85)

Resolution of necessity: Cover Letter

Resolution of Necessity: General Nature of the Proposed Improvement Estimate of Total Cost and/Or Cost Per Lineal Foot Description of Classes of Lots Method of Appropriating the Benefits to the lots Details, Plans and Specifications viewable for inspection.

Resolution of necessity: Public Hearing Hold Public Hearing – Take Public Comment / Hear Objections Adopt Resolution of Necessity – with or without amendments 20 Day Referendum Period Property Owners May Stop Special Assessment – written petition of more than 55% of the total front footage of the project.

PLANS AND sPECS Following 20 Day Referendum - Direct Engineer to design Final Specifications. The plans and specifications shall be filed in the office of the finance officer and available for examination by any interested party. (SDCL 9-43-8) Incorporate Public Input and individual property preferences into the Plans and Specs.

BID, AWARD, CONSTRUCT Go Out For Bids (20 Days Following Publication – SDCL 9-43-86) Follow all Bid Procedures and Laws Bonding – Close on Financing prior to awarding Bid Award Bids

Construction Don’t Forget – Keep the Public Updated! Hold a Pre-construction Meeting with Engineer, Contractor and Sub-Contractor Utilize Newsletters, Text Messaging, Social Media to keep public informed. Consider talking about: Unique Aspect A special assessment is not an ad valorem property tax

Construction Complete Contractor Completes Project Engineer Calculates Assessments based on actual costs improved to benefited property Finance Officer Creates the Assessment Roll Consider talking about: Unique Aspect A special assessment is not an ad valorem property tax

Assessment ROll Assessment Roll (SDCL 9-43-87) Name of the Owner Legal Description Amount Assess Assessment Payable in Installments (SDCL 9-43-89) Number Of Installments – Determined by Governing Body Interest Rate Whole assessment or any installment may be paid at any time. Installments paid before their respective due dates are deemed paid in inverse order of their due dates.

Assessment Roll Notice of Hearing: Finance Officer Shall Publish a Notice of Hearing Describe Improvement Time and Place of Hearing Open for Public Discussion Finance Officer Shall Mail a Copy of the Notice First Class or Certified Mailing may not be less than 10 nor more than 20 days before the date set for the Hearing (SDCL 9-43-90)

The Hearing Agenda to be Posted – 24 Hours in Advance Governing Body to take Action (SDCL 9-43-91) Approve – See Next Slide Equalize or Amend – Publish Changes, Notice and Hearing Shall be Held (SDCL 9-43-93) Reject – New Roll May be Made (SDCL 9-43-92)

Approval and Levy of assessments APPROVAL OF RESOLUTION AND LEVY OF ASSESSMENT According to (SDCL 9-43-94) & (SDCL 9-43-95) Describe Assessment and Local Improvement Provide Dates of Official Approval Resolution to Specify Payment under Plan One or Plan Two (SDCL 9-43-102) Plan One: Collection by County Treasurer Plan Two: Collection by Municipal Finance Officer Approval and Levy of assessments

Appeal of Decision Decision of a Municipal Government may be appealed (SDCL 9-43-96) Shall Be Within 20 Days After the Publication of the Adopted Assessment Roll Shall File Written Notice with Finance Officer & Clerk of Circuit Court in the County in which the Property is located Shall Describe the Property and Reason for Appeal.

Special Record The Finance Officer Shall Prepare by Special Record: Record of all Assessments Consecutive Number Date Assessment is Due Name of Property Owner Legal Description of Property Amount Assessed Character of the Improvement The Date Payment/Installment is Paid

Mailing to Property Owners Finance Officer Must Immediately Mail to the Owners of Each Assessable Piece of Land (SDCL 9-43-99) Notice Specifying the Amount of Assessment Number of Installments, Date of Approval of the Assessment Roll Statement: That any number of installments may be paid without interest at the office of the FO within 30 days from the date of approval of the roll, after which date the unpaid balance will draw interest from the date of the approval of the assessment Roll.

Collection of Assessments Begin Collections on Annual Basis Assessments Paid Prior to Term – with Calculated Interests to Date of Payment. Communicate with County on Annual Basis

Make your project a success Identify a Project Identify Funding Sources Determine if a Special Assessment meets the Special Benefit Test Adopt an Assessment Policy Know the Costs Over Communicate with Property Owners Incorporate Property Owners Suggestions into Project Follow Special Assessment Laws (SDCL 9-43) Establish a Capital Improvement Plan Make your project a success

Works Cited South Dakota Codified Law – SDCL 9-43 South Dakota Municipal League – Guide to Special Assessments Dell Rapids Public Notices and Correspondence