Street assessments out of line?
Street assessments. No one likes them, but what about the fairness and legality of them. The city of Detroit Lakes says its system works well; some residents don't agree.
Barbara Craft appeared before the Finance Committee Thursday afternoon. It was not her first visit to city hall about the Rossman Avenue street assessments.
"She does not feel the assessments were levied properly," City Administrator Bob Louiseau explained.
Craft, who lives on Rossman Avenue, purchased another house on Rossman Avenue a few years ago so her disabled daughter could live near her.
When the Rossman Avenue street project was done in 2007, the house -- valued at $52,600 -- was assessed $7,906.16 (about 15 percent).
"In no way did this property increase in value $7,900," she said in an earlier interview.
The value increased to $55,700 in 2008, according to county assessments.
"They did acknowledge they didn't do a special benefit test," Amy Fish said. Fish, another resident on Rossman Avenue involved in the fight along with Craft, said her assessments are so high there's no way she'll ever be able to sell her house.
"I picked up a third job because of special assessments," she said.
Fish's house is valued at $80,000, and the assessments were $16,000, or $22,000 with the interest included.
"Getting a (third) job was not my first choice," she said.
She and her family looked into selling the house and moving, but after talking to several realtors, they were told that's not really an option either.
"Our house is now not sellable because of special assessments," she said. To add on the cost of the assessments would put the house in the $100,000 range, and it will never sell for that, she added.
Craft brought a list of legal issues to the Thursday finance meeting, citing Minnesota Statute 429 as her basis.
First, she said, the notice for a hearing to be held on Jan. 9, 2007, was sent out Dec. 20, 2006, and the notice did not contain the proper language. The statute says the city must give an estimated "cost" of the assessment, but the notice used "impact" instead, which she said is a completely different meaning.
"Well, there's a huge difference between cost and impact. Impact is kind of in the eye of the beholder. Cost is what it is," she said.
"And they've done enough of these projects that Gary Nansen with Ulteig Engineers should be able to come in with a reasonable estimate of the cost. So, I don't know if it's intentional," she said of the wording. "That means this notice, by state law, is defective."
Fish said she was told the estimated cost of Rossman Avenue's street project was based on past street projects. That estimate, she said, came in a couple thousand dollars less than what she was actually assessed in the end.
Secondly, she said, at the Jan. 9, 2007, improvement hearing, a reasonable estimate of cost was not available to homeowners.
And thirdly, she said, according to statue, the city has to do a special assessment of properties and cannot have street assessments cost more to the homeowner than the increased value to their property.
In a letter dated July 29, 2008, Louiseau told Craft that a notice for a Nov. 13, 2007, meeting included a worksheet indicating the amount for assessments for each property owner.
He also said that several years ago the city assessed 100 percent of street projects to property owners, but since then has made the city responsible for some of the costs.
"We modified the amount assessed to property owners after having appraisals completed to determine the impact improvements have had on the value of the property," he said. "If other factors, beyond the street utility improvements, cause the value of the property to do down, this does not mean the assessment does not represent the benefit of the improvement to the property."
The notice also contained literature stating property owners' right to and the procedure for appealing an assessment to district court.
"I appreciate all the work Ms. Craft has undertaken," City Attorney Bill Briggs said Thursday. "The short story is I wish I could agree (with her), but I don't."
He said as for the estimated costs of the project, "a fair approximation of benefit for the project" was voiced. Bottom line, he said, Craft's recourse to appeal the assessments is past due. District court provides up to 30 days after the assessments are made to appeal, a deadline that passed months ago.
"The key at this point is the 30-day time period for appeal has expired and is no longer valid," Briggs said. "In my opinion, the assessments in this case are valid and final."
On the matter of getting property values from the county to determine the special benefits test, he said that's one way of determining assessments, but not the only way.
"Saying we have to proceed on appraisals of records is not correct," he said.
He added that the method the city uses, and has for many years, is calculating based on front footage on the street being constructed.
"This is such a blatant violation of special benefit, that's why I said if this goes to court, I don't see how the city could prevail, but they just don't want to hear it," Craft said.
Fish said it's not just her and Craft's houses being affected either, but rather the entire neighborhood.
Several of the houses on her block are vacant because of the special assessments making them more difficult to sell, which is bringing vandalism to the neighborhood, too, she said.
Finally, Craft said she doesn't know why the street was reconstructed in the first place. She said a new overlay was placed on the street in 2002, and even though she has been told the street did not meet requirements before the 2007 reconstruction, that doesn't matter.
A street should be in disrepair or the utilities not working in order to have the street be torn up and redone, she said, and it should then meet requirements. A majority of the streets in town don't meet current standards, she said, but that doesn't mean they don't work and should be replaced.
There could be one last hope for Craft though. The only other avenue for the council to take would be to determine if the assessment is excessive and issue a re-assessment.
"You have the discretion to reassess," Briggs said.
He warned, though, that the city better find something unique to issue a reassessment or it would open the door to anyone else who doesn't like the higher assessments and says, "Me too, I want mine changed." The city could even get to the point where it would have to look at reassessing the entire project.
"The box could open up to looking at each project over years," he said.
Not backing down, Craft is requesting a re-assessment of both of her properties -- the house she resides in and the one she purchased for her daughter.
In a Jan. 15 letter to the council, she said, "Consideration should be given for defective notice and the fact that a reasonable estimate of cost was not available at the improvement hearing."
The finance committee agreed that city staff will meet within the next two weeks for more discussion and then come before the council at the April meeting for a decision.