The cost of any improvement shall be assessed upon property by the improvements based upon benefits received. The following general principles shall be used as a basis of the city’s assessment policy.
(A) Project cost. The PROJECT COST of an improvement includes the costs of all necessary construction work required to accomplish the improvement, plus engineering, legal, administrative, financing and other contingent costs, including acquisition of right-of-way and other property. The finance charges include all costs of financing the project. These costs include but are not limited to financial consultant’s fees, bond rating agency fee, bond attorney’s fees, and capitalized interest. The interest charged to the project shall be included as financing charges.
(B) City cost. The CITY COST of an improvement is the amount of the total improvement expense the city will pay as determined by Council resolution. Where the project cost of an improvement is not entirely attributed to the need for service to the area served by said improvement, or where unusual conditions beyond the control of the owners of the property in the area served by the improvement would result in an inequitable distribution of special assessments, or for any other reason determined by the city, the city, through the use of other funds, may pay such CITY COST.
(C) Assessable cost. The ASSESSABLE COST of an improvement is equal to the PROJECT COST minus the CITY COST.
(D) Interest. The city will charge interest on special assessments at a rate specified in the resolution
approving the assessment roll. If bonds were sold to finance the improvement project, the interest rate shall be 2% more than the average interest rate of the bonds, rounded to the nearest quarter of a percent. If no bonds were sold, the interest rate shall be set at the same rate.
(E) Prepayment. Property owners may pay their assessments in full interest free for a period of 30 days after the assessment hearing. After such period interest shall be computed from the date specified in the assessment resolution.
(1) The city will transmit a certified duplicate of the assessment roll with each installment, including interest, to the County Auditor, or in lieu of such certification, annually certify to the County Auditor by November 30 in each year, the total amount of installments of and interest on assessments on each parcel which are to become due in the following year.
(2) Prior to certification of principal and interest or the first installment thereof, to the County Auditor, a property owner may make a partial prepayment of the principal to the city. Such partial prepayment must be at least $100. If the partial prepayment is made after the 30-day “interest free” period allowed by state law, interest will be charged on the amount of the partial prepayment from the date specified in the resolution and paid along with the partial prepayment.
(3) After the city has made the first certification of principal and interest to the County Auditor, prepayment will be accepted only for the total amount still owing including interest and must be made prior to November 15 of any year. If a parcel has two or more separate special assessments, prepayment of the remaining principal balance may be made on one or more assessment totals.
(4) Tax-exempt parcels such as churches and school properties may make only one partial prepayment to the first certification to the County Auditor. The remaining principal after the partial prepayment will be paid in equal installments over the remaining term of the special assessments.
(F) Extensions. Where an improvement is designed for service of an area beyond that receiving the
initial benefit, the city may pay for increased project costs due to such provisions for future service extensions. The city will levy assessments to cover this cost when a new improvement is installed as an extension of the existing improvement upon identification of such additional amount in the notice of hearing for the extensions or new improvements. As an alternative, the city may assess these costs to the area of future benefit immediately.
(G) Frontage roads. Because frontage roads along highways or other arterial streets are deemed to be of benefit to commercial or industrial properties, the entire costs of any improvement on such frontage roads shall be assessable to the benefited properties, even if only those properties on one side of such frontage roads are benefitted.
(H) Project assistance. If the city receives financial assistance from the federal government, the state, the county, or from any other source to defray a portion of the costs of a given improvement, such aid will be used first to reduce the CITY COST of the improvement. If the financial assistance received is greater than the CITY COST, the remainder of the aid will be placed in the Capital Improvement Fund to be applied towards other city projects.
(I) Assessable property. Property owned by the city and other political subdivisions including municipal building sites, parks and playgrounds, but not including public streets, alleys, and right-of- way, shall be regarded as being assessable on the same basis as if such property was privately owned. Private right-of-way shall be assessable.
(J) Individual benefits. The city must construct improvements specifically designed for or shown to be of benefit solely to one or more properties. The costs for these improvements will be assessed directly to such properties, and not included in the assessments for the remainder of the project. An example of this would be utility service lines running from the main lines to the property.
(K) Benefit appraisals. In the event that city staff has doubt as to whether or not the proposed assessments exceed the special benefits to the property in question, the City Council may order benefit appraisals as deemed necessary to support the proposed assessments. As a general rule, benefit appraisals may be ordered when the proposed assessment exceeds $10,000 for a standard city reconstruction on a residential lot or $30,000 per acre for commercial or industrial property.
(L) Condemnation awards. A property owner may elect to offset special assessments against condemnation awards. In such case, the property owner must execute an agreement (net assessment agreement) with the City Council.
(Res. 10-01-2020, passed 10-21-2020)