© 2004

1. Collection of Special Assessments Shea Denning, School of Government denning@iogmail.iog.unc.edu Direct dial: (919) 843-5120 © 2004

2. What are Special Assessments? • Charges levied against property to pay for public improvements that specially benefit that property • Cities may levy special assessments for: • Streets • Sidewalks • Water and Sewer Systems • Storm Sewer and Drainage Systems • Beach erosion control / hurricane flood protection (G.S. 160A-216, 160A-238) Source: David M. Lawrence, Local Government Finance in North Carolina §308 (2d ed. 1990).

3. Counties may levy assessments for: Water and Sewage Systems (if property within city, city council must approve by resolution) Rural subdivision and residential streets Beach erosion/hurricane flood protection Watershed improvement, drainage, water resources development Street lights in residential subdivisions outside city (G.S. 153A-185, -205, -206) What are Special Assessments?

4. For street or sidewalk improvement by a city, majority of property owners must petition for improvement Who are majority of property owners? Must represent majority of all of the lineal feet of frontage of lands abutting on the street to be improved For counties, 75% of owners must petition for improvement to subdivision and residential streets Assessment to equal local share required by Secondary Roads Council Are Special Assessments Voluntary?

5. For assessments other than road assessments, board adopts resolution, holds public hearing at which all interested persons are heard Are Special Assessments Voluntary?

6. Not uniformly levied throughout county or city Levied against property that enjoys a special benefit from the improvement Among benefited property, special assessment is uniformly levied Governing board has discretion in determining method of uniform assessment How Do Special Assessments Differ from Property Taxes?

7. Front-foot assessment: Uniform rate per foot of abutting property Size of area benefited Value added to property by improvement Lot or parcel assessment Methods of Assessment

8. What about exempt property? • Machinery Act exemptions do not apply to special assessments • Property owned by federal government is exempt • Property owned by state may be assessed only with consent of Council of State • Property owned by local governments is liable for special assessments

9. Assessments are a lien on property assessed Assessment lien may be foreclosed in same manner as lien for property taxes Assessment roll is delivered to tax collector for collection in the same manner as property taxes (G.S. 153-195; 160A-228) City of Durham v. Herndon: Personal property may be attached to secure payment of special assessments How are special assessments collected?

10. Can city refuse to connect property owner to water or sewer services until special assessment is paid? NO! This is NOT a remedy authorized by statute. May special assessment be collected by debt setoff? Yes. You may use all Machinery Act remedies. What is the applicable statute of limitations? 10 years for foreclosure actions None for debt set-off? How are special assessments collected?

11. Foreclosure must begin within 10 years from date assessment -- or earliest installment included in action -- became due. (G.S. 153A-200(d)) Acceleration of installments under subsection (b) of this section does not shorten the time within which foreclosure may be begun If installments are accelerated, the statute of limitations continues to run as to each installment as if acceleration had not occurred. Statute of Limitations