What is a special assessment?
A special assessment is a charge imposed on real property (land and buildings) to help pay for a public improvement that benefits the property. The City is authorized by state law and city charter and ordinances to use special assessments to finance public improvement projects.
What are special assessments used for?
Special assessments typically help pay for street reconstruction, mill and overlay (resurfacing), sanitary and storm sewer construction, sidewalks, alleys, and other public improvements.
How are special assessments different from property taxes?
Special assessments are a form of taxation and may be paid in the same way property taxes are paid for. But special assessments differ from property taxes as follows:
- Assessments are calculated differently than property taxes
- Nearly all property can be subject to a special assessment, including tax-exempt property such as schools, religious institutions, government entities, non-profit organizations, hospitals and universities.
- Personal property is not subject to special assessments
- Special assessments are generally not deductible for income tax purposes.
Why does the City need special assessment policies?
The City needs clear policies and procedures to describe how properties are assessed. Fairness and transparency are key reasons for a policy document that can be referenced and relied on by property owners, city staff and elected officials. Res 24-720 adopted by City Council on June 26, 2024.
Special Assessment Policy
For what kinds of projects does the city charge special assessments?
Typical public improvement projects subject to special assessments include:
Street Reconstruction (existing paved city residential and arterial streets)
Street Mill and Overlay (resurfacing existing paved city residential and arterial streets)
Street Rehabilitation – (resurfacing existing paved residential and arterial streets and repairing and/or replacing street components such as curbs, gutters, storm sewer systems, sidewalks, and pedestrian ramps as needed
Storm and Sanitary Sewer Mains (repairing, replacing or upgrading)
Sidewalk (replacement, new installation)
Alleys (reconstruction or new construction)
Joint Improvement Projects (undertaken with other government agencies)
How is my special assessment calculated?
Step 1:
The City’s Department of Public Works calculates the total Project Cost and then determines an Assessable Cost, usually 25% of Project Cost for street reconstruction and mill and overlay projects.
Assessable Cost is divided by the project’s total street frontage to derive a per-foot assessment rate. That rate is multiplied by each property’s assessable frontage to determine a preliminary assessment amount for the property.
Step 2:
The maximum special benefit of the project is then calculated for all properties. Special benefit is the increase in market value of a property resulting from the public improvement project. Special benefit is calculated as follows:
Establish the estimated market value of each property based on Ramsey County assessed valuations.
Assign a special benefit percentage to each property based on analysis from an independent appraisal consultant.
Multiply the estimated market value by the special benefit percentage to derive a maximum special benefit assessment amount. This is the secondary assessment amount.
Step 3:
The preliminary and secondary assessment amounts are compared and the Final Assessment is lesser of the two amounts.
Are there any types of properties that are not assessed?
Yes. Some examples:
- Condo/townhome storage units
- Condo/townhome garage units
- Platted outlots
- Land-locked parcels (not abutting street right-of-way)
- Parcels exempt by law (e.g., federal properties, cemeteries)
How does the assessment process work?
- The Department of Public Works defines a public improvement project, estimates the cost, identified financing, and describes it in a Summary of Engineering Recommendations.
- The Assessments Office identifies all the properties to be assessed and prepares resolutions for City Council approval of the project. The City Council approves the project at a public hearing following mailed notice to property owners.
- When project construction nears substantial completion, the Assessments Office prepares City Council resolutions to levy the assessment. The City Council approves the assessment at a public hearing following mailed notice to property owners.
- Following approval of the assessment roll, the Assessment Office mails invoices to property owners for the total amount of the levied assessment. Property owners may pay all or a portion of the assessment. A portion of annual principal, plus interest is then “certified” to the County in November.
Can I appeal my assessment?
Property owners may appeal the levied assessment in Ramsey County District Court. Owners must file a notice stating the grounds for the appeal with the City Clerk within 20 days after the order adopting the assessment. Owners must also file the same notice with the Clerk of District Court within 10 days after filing with the City Clerk.
How do I pay my assessment?
You can pay by e-check or credit card online at www.stpaul.gov/assessments, by check in US mail to the address noted on the invoice, or in person at the Assessments Office.
Does the City charge interest on my assessment?
The City charges interest on a special assessment at a rate specified in the assessment roll attached to the City Council resolution that levied the assessment.
How long do I have to pay off my assessment?
20 years for most public improvements such as street reconstruction, sewers and sidewalks.
10 years for street mill and overlay projects.
Terms may vary for other projects.
Can I pay off my assessment early?
You can pay your assessments in full, interest free, for up to 30 after the City Council levies the assessment. After that time, interest will be computed on the outstanding balance. You can also make payments to the City’s assessment office at any time to reduce or eliminate your outstanding balance.
Do I pay my assessments with my property taxes?
That is the typical payment method. Each year in November the City transmits the total amount of principal and interest installments on your assessment to Ramsey County for collection with the next year’s property taxes.
Can I defer paying my assessment?
If you are a senior citizen, a disabled person, or an active member of the military and you meet certain income requirements, you may apply to defer the payment of principal and interest on your special assessment. A deferral is not a forgiveness of the assessment, and is not an exemption, exclusion or reduction of any amount due. It is simply a delay in payment of the assessment. At some point in the future the assessment must be paid with compounded interest.