Continued: Assessments: Not a special feeling

Special assessments, by law, are supposed to provide a financial benefit to the homeowner that is roughly equal to the cost of the fee they pay, Cina said, "but nothing has changed for me.'' And the high-profile orphanage envisioned by Copeland, one of the state's best-known advocates for the poor, still exists only on paper.

Each year, tens of thousands of Minnesota homeowners like Cina are told that they must pay a special assessment fee for roads, sidewalks, sewers and other services that directly affect their property. The use of these assessments, paid by both homeowners and commercial entities, jumped from $197 million in 1995 to $291 million in 2005, according to the state auditor's office. The increase during that decade was $39 million more than inflation.

While Cina's fee is unusually high, it points to the tension between homeowners -- many already worried about rising property taxes -- and their cities and suburbs struggling to pay for new development and road repairs. Special assessments are one way cities are plugging holes created by stagnant state aid to cities and skyrocketing construction costs, experts said.

While most homeowners monitor their property taxes with great interest, special assessments are "a great unknown to most taxpayers," said Bob DeBoer, director of policy development at the Citizens League, a public-policy research group based in St. Paul.

No government agency tracks which cities or townships require their citizens to pay the highest or lowest assessment fees. Most homeowners who get the notices in the mail simply pay them quietly, though those who contest them can and do get some relief.

"There's never a public discussion about special assessments, but there's always debates about property taxes,'' DeBoer said.

A new Citizens League report shows that between 2001 and 2006, St. Paul topped the list of cities with the highest special assessments at $133 million, followed by Minneapolis with $63 million. Next came two cities that are still building new roads and sewers: Maple Grove, which raised $41 million, and Woodbury, with $25 million. Coon Rapids, Eagan and Cottage Grove also were near the top of the list.

But the list doesn't say what portion of the tab was picked up by homeowners. That varies from city to city.

St. Paul, however, uses special assessments for projects well beyond most municipalities. It uses special assessments to pay for everything from tree trimming to snow removal to road reconstruction, in part because of cuts in state aid to local governments, in part to avoid raising citywide property taxes, said Matt Smith, St. Paul's finance director.

Assessing assessments

For some homeowners, assessments seem like a fair way to pay for improvements near their property -- especially if it's a couple thousand dollars to replace crumbling sidewalks. They may not be thrilled about the cost, but they understand that cities need a way to pay for special services.

Paul Laederach of Edina agrees with his city that roads in his historic Country Club neighborhood are in bad shape and need replacing. But the senior citizen balks at the cost. While the city will bear half of the cost of the $19.7 million project to replace and repair streets, street lighting, water and sewer systems, homeowners still are paying $18,210 to $22,900 each.

"Taxes keep going up, but our income doesn't," Laederach said.

Some of his neighbors are less charitable in their assessments. "It's unconscionable to levy such a large amount to an individual property owner,'' said Margo Hoppman. "A project of this scope and magnitude should be shared by all of Edina."

In Edina, homeowners pay the entire cost of street replacement. Two years ago, the City Council talked about sharing that cost, but there was concern about reversing the policy when many homeowners had already paid those fees.

Most homeowners simply pay their bills.

In Brooklyn Park, Patricia Hoehn said she was "shocked and dismayed'' several years ago when she learned the city wanted to connect her bucolic neighborhood of big lots and gravel roads to city streets, water and sewer at a cost of more than $80,000 per household.

While some of her neighbors broke up their 2.5-acre lots, selling excess land to developers, Hoehn decided to keep the big wooded lot where she has lived for 35 years. The city deferred $17,000 until she sells or divides her lot. She paid $53,000.

"I raised my family here," Hoehn said. "Something this size ... does take your breath away. But I wanted to stay here."

Some payments deferred

For senior citizens such as Hoehn, as well as disabled people, the law allows cities to defer assessment payments until the property is sold or the owners die. Other homeowners can appeal their assessments to their city council. If they don't like the council's decision, they can appeal to their district court within 30 days.

But in Mounds View, Valerie and Brian Amundsen wanted to change more than their own assessment. They started a petition drive to overhaul the entire system for paying for roads. As a result, the city created a task force that examined the way it funded road construction, and ended up abolishing assessments, Valerie Amundsen said. The conclusion was that the roads benefited everyone, and everyone should pay.

"Now, the typical homeowner pays a flat $100 fee a year over the course of 10 years," said Valerie Amundsen. That property tax increase will generate about $400,000, city officials said.

To make it easier for cities to fund road repair, the League of Minnesota Cities will propose the creation of "street improvement districts" at the Legislature this session. The districts would allow cities to bill residents over a 20-year period for street maintenance and reconstruction and spread assessments over a bigger group of homeowners who don't necessarily live right on a street that's being repaired.

The proposal also would avoid the requirement that homeowners' special assessments must not exceed the increased value of their property after the construction or development.

In the meantime, Cina has given up his fight with the city of Eagan after going through some health problems. His assessment has been deferred until "a future point in time,'' such as the sale of his home or subdivision of property near his home, City Manager Tom Hedges said.

Hedges said he sympathizes with Cina, one of many residents facing large assessments. But it's the price of development, he said, and that development will ultimately increase Cina's property values.

Cina's not convinced, adding, "This just doesn't seem fair.''

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