If a city crew repairs the street in front of your house, is it fair for the city to ask you and your neighbors to pay for the work?
The city recently gave Fretheim a heads-up that she may face extra charges on her property taxes — potentially as much as $1,749 over the next decade — to pay to resurface the street in front of her house.
And she’s not alone. St. Paul officials recently sent similar special assessment notices to 764 property owners in six different parts of the city, alerting them they could be on the hook for work on streets adjacent to their property.
The rationale: These property owners would realize a “special benefit” from the city milling and overlaying their streets (that means grinding up the top layer of pavement and replacing it with a smooth surface). If Fretheim and her neighbors are directly benefiting from this work, shouldn’t they help cover the costs?
But Fretheim’s home is just off of Highway 280 in St. Anthony Park. Because of a quirk of geography and GPS navigation, many drivers exiting the freeway — including big semi- and delivery trucks — cut down her street to get to Como Avenue. So how is it fair for the city to saddle Fretheim and her neighbors with as much as 50% of the project’s cost?
“I’m willing to pay the taxes, but it is not a ‘special benefit’ at all,” Fretheim recently told the St. Paul City Council. “If anything, paving the roads is going to make it that much more enticing for people to use it, and use it at great speed and great weight. It’s for people making a shortcut, not for the people of the neighborhood.”
Several St. Paul council members said Fretheim had a point. At last week’s meeting, they voted to allow city crews to begin the mill-and-overlay projects — but also warned that when the final bill came due, the council would not support passing along 50% of the project’s cost to adjacent property owners.
“We don’t want to make the same deferred maintenance mistakes that previous city leaders did … that we’re trying to patch our way out of at this point,” said council member Chris Tolbert. “I’m also looking at these assessments and they’re very high … I do not support the assessments in the current form.”
A long legal debate over who pays — and it may not be over
The debate over the proposed street projects highlights how St. Paul officials are still sorting out through the issue of paying for street repairs — even after years of legal wrangling, and two straight legal defeats for the city.
In 2016, the Minnesota Supreme Court ruled that city officials had overstepped by billing property owners for too many types of routine street maintenance — a ruling that upended St. Paul’s budget at the time, and forced city officials to scramble for a new way to fund these services.
Last spring, a Ramsey County judge admonished St. Paul again over this practice. By then, city officials had shortened the list of services they used special assessments to fund: street sweeping, street lighting, seal coating and mill-and-overlay projects. Still, Judge Robert Awsumb ruled officials couldn’t charge for these services unless they showed evidence of a “special benefit” to property owners.
“We keep trying to do this,” summarized council member Jane Prince, “and we keep finding out we’re not doing it the right way.”
But to critics, the debate last week shows that St. Paul officials haven’t gotten the message: they really shouldn’t be leaning on special assessments to cover the cost of street repairs at all.
Mayor Melvin Carter “does not want people to see a huge increase in real estate taxes while he’s the mayor,” said Ferdinand Peters, an attorney who represented plaintiffs in the 2022 property tax lawsuit, “and so they try to push anything and everything into special assessments.”
Peters said that if the city forges ahead with these assessments, he’s likely to pursue further legal action. He argues it’s a stretch to claim that street resurfacing constitutes an “improvement” to a property.
“These are street maintenance-type projects,” Peters said. “You’re not increasing the value of a parcel when you do street maintenance in front of someone’s home.”
Though St. Paul is still finalizing its policy for special assessments, a spokesperson for Mayor Melvin Carter said city officials are complying with Awsumb’s ruling and following state law.
“The use of assessments for mill and overlay is a common and widely accepted practice in Minnesota,” spokesperson Kamal Baker wrote in an email.
In the wake of Awsumb’s ruling, Baker said city leaders opted in 2023 to fund street sweeping, street lighting and seal coating through citywide property tax collections.
That said, there’s nothing in recent court rulings to prohibit the use of special assessments for mill-and-overlay work, Baker noted, so long as the city can demonstrate a special benefit to property owners.
St. Paul officials stress that it’s not clear yet how much this year’s projects will cost — staff will know that after they receive bids — or how much property owners will actually pay. Until that decision is made, Baker contended it would be “premature” to object to how these projects would be funded.
How much might these new special assessments be?
In this new round of mill-and-overlay projects, a city-hired consultant calculated the “special benefit” property owners could realize from the street repairs. City officials then used these calculations as their basis for capping the amount of special assessment a property would receive.
The amounts of the special assessments from this year’s mill-and-overlay projects (showed in the map above) are not yet final — and many city council members want property owners to pay less.
An example: The city sent notices to 650 single-family homeowners informing them they could see a special assessment. If the city charges the full amount, the average homeowner would see a $2,417 increase in their property taxes spread out over a ten-year span. (The assessments would also be eligible for hardship deferrals.)
A half-dozen non-profit institutions would also see special assessments. Among them: St. Catherine University, Mitchell Hamline School of Law and several religious institutions — all of which are normally exempt from property taxes — would have to pay. For example, the Temple of Aaron Synagogue could see a $14,701 special assessment. Mitchell Hamline could pay $18,355. St. Kate’s could pay $23,838.
Also on the list: St. Paul Public Schools and the city government itself. Only cemeteries and federal government property are exempt from special assessments.
But again, these amounts are essentially estimates, and without a better sense of the cost of the project or a decision about how much to fund through assessments, it’s not clear how much property owners would pay. This all will likely end up as fodder for the City Council’s budget discussions this fall, and city leaders won’t bill the special assessments until next spring.
For the moment, St. Paul’s Public Works Director Sean Kershaw was simply hoping to get the council’s approval to begin the mill-and-overlay work: “We want to get the projects done, and we want to get it done in a way that’s equitable.”
Should the city continue using special assessments to cover the costs of these projects?
Kershaw said the answer isn’t entirely up to him; it’s a policy conversation for the city’s elected leadership to answer.
“My recommendation would be,” he added, “in situations where there’s demonstrated value, [special assessments are] a good way to spread out the value of the project.”
Council members have said they’ll discuss the special assessments policy when Kershaw appears before the body in early September to discuss the budget for the upcoming year.
Editor’s note: This story has been updated to change the name of the College of St. Catherine, as at appears in tax filings, to St. Catherine University, as it is now known to the public.