One of the funding resources available to public entities is special assessments. This chapter spells out what types of improvements the City may choose to assess for as well as how they may assess including via petition and assessment agreements, voluntary assessments, or by following the special assessment process set forth in the Iowa State Code.
Iowa State Code allows cities to assess the cost of construction and repair of public improvements. The Code gives cities considerable leeway in deciding what public improvements to assess for. However, the City of Cedar Rapids’ standing practice has been more limited. The City has followed these guidelines in the past:
Any project which makes an improvement benefiting a property within the assessment district is typically assessed. Examples include but are not limited to the following:
- Upgrading a seal coat street to a street with a permanent surface
- Adding curb and gutter to a street
- Adding a turn lane to an existing roadway
- Replacing a private sanitary sewer service line (ex. Orangeburg)
- Installing traffic signals where they did not exist before
- Stormwater drainage improvements
The City of Cedar Rapids does not currently assess the following types of costs:
- Replacing sidewalk, when prompted by changes to the roadway
- Constructing ADA-accessible sidewalk ramps
- Replacing paved private driveways, when prompted by changes to the roadway
- Replacing private water services between the main and the stop box
- Installing drain tile where it did not exist before
Refer to website: IOWA STATE CODE - CHAPTER 384
When the new sidewalk is constructed where it did not previously exist, it will be specially assessed according to the City’s sidewalk assessment policy.
Refer to document: CITY OF CEDAR RAPIDS, IOWA NEW SIDEWALK CONSTRUCTION SPECIAL ASSESSMENT POLICY MARCH 2017
The City manages an Annual Sidewalk Repair program to maintain the existing sidewalks. Identified problems are recorded and shared with the adjacent property owner. The owner is given an opportunity to conduct the repair with their own contractor. Otherwise, the City conducts the repair and assesses the cost to the property owner. When planning a CIP project, consult the Sidewalk Repair Program Coordinator to determine if plans are in place to repair the area with this program.
Requests for sanitary sewer, storm sewer, or water main extensions to the property are not typically built as assessment projects. They are typically a Building Services function and do not often require involvement from Engineering.
Petition and Assessment Agreements
A property owner may petition the City to construct improvements to benefit the owner’s property and agree to be assessed by the City for costs to construct the improvements in accordance with the Code of Iowa and City assessment policy and procedures. These agreements are typically between the City and a developer for future improvements. A Petition and Assessment Agreement (P&AA) is a document that is signed by a property owner and submitted to the City to address the cost of the future improvements. For example, a developer may postpone installing a concrete sidewalk adjacent to the houses they built until the City urbanizes an adjacent road in the future. The agreement is bound to the property, not the owner who signs the agreement. Whoever owns the property at that future point would be responsible for the cost of constructing the sidewalk.
If there is an existing P&AA (or some other similarly named agreement) in place for a property, the assessment process spelled out in Iowa Code does not have to be followed. This is because, per the language in the P&AA, the property owner agrees to pay the cost for the public improvements and waives the right to object to the assessment. However, the City may choose to follow the assessment process and allow objections to be expressed at a public hearing.
P&AAs are typically stored within the same files as the subdivision’s Final Plat. Agreements for individual, un-platted properties can usually be found among property records on the Linn County Recorder’s website.
Refer to document: SOP – FINDING PLANS AND RECORD DOCUMENTS
Assessments for Property Owner Petitioned Improvements
A property owner or owners may petition the City to build an improvement and voluntarily accept the cost of the project. Common requests include alley paving; sidewalk extension; and curb and gutter installation. If the number of assessments is relatively small and all of the property owners adjacent to the proposed improvement are in favor of the assessed improvement, Voluntary Assessment Agreements may be considered. This eliminates the need to hold a public hearing and significantly reduces the preliminary assessment process. A Voluntary Assessment Agreement may also be considered when an issue arises late in the design – i.e. discovery of Orangeburg sanitary sewer services.
Refer to document: SOP – PETITION BY PROPERTY OWNERS FOR IMPROVEMENTS
Special Assessment Process
To construct or repair a public improvement to be paid for in whole or in part by special assessment, a detailed process must be followed. This process is spelled out in the Iowa State Code.
Refer to website: IOWA STATE CODE - CHAPTER 384
If the proper sequence is not followed, the assessment will not be enforceable, and the City will have to find an alternative funding source. The entire process includes preliminary assessments, bidding, construction, and final assessments.
Preliminary Special Assessments
If the decision is made to proceed with assessing for an improvement, the Preliminary Assessment process must be followed. The purpose of this process is to ensure the affected property owners are aware of the proposed improvements and are given ample opportunity to object to the project. The process takes a minimum of five Council meetings to complete, for a total minimum of approximately three months.
Refer to document: SOP – PRELIMINARY SPECIAL ASSESSMENTS
Final Special Assessments
Once a construction contract is accepted by Council, this kicks off the series of steps necessary to issue a Final Assessment. The timing of the Final Assessment is more sensitive than the Preliminary Assessment. The Final Assessment requires two Council meetings to complete. If the proper procedure and time intervals aren’t followed, a property owner could challenge and invalidate the assessment.
Refer to document: SOP - FINAL SPECIAL ASSESSMENTS
Pre-Payments of Assessments
At times, an owner will sell their property after the preliminary assessment has been issued but before the final assessment has been issued. As assessments are levied against the property, not the individual, the current property owner at the time when final assessments are issued is responsible for the assessment. Therefore, some lending institutions may require the current owner to pay off the assessment before the property is sold – i.e. before the final assessment. Contact the Program Manager for additional information.
The City’s preference is to try to avoid accepting pre-payments wherever possible, especially for Preliminary Assessment amounts. Doing so properly entails placing the funds into escrow so that the future property owner may be reimbursed the balance of a pre-payment if the Final Assessment value comes in lower than the Preliminary. The Real Estate Management team can provide guidance on the use of escrow services.
If the City does accept a pre-payment, obtain a customer number and an invoice number from the Finance Department Accounts Receivable Manager. These will be needed by the Treasurer to accept the payment.