Marshall Council OKs new way to calculate special assessments

MARSHALL — How to fairly assess the costs of street projects is a question that the city of Marshall has been grappling with for a long time. Now, city staff say, they hope they’ve come up with a process that will work for homeowners and businesses alike.

On Tuesday night, Marshall City Council members approved new procedures for calculating special assessments for residential and commercial properties.

Based on examples provided to the council by city staff, the new procedures could mean a difference of thousands of dollars in assessments for commercial and industrial properties.

Marshall’s current special assessment procedures include a maximum assessment amount of $5,500 for residential properties. However, after the city planned street and utility reconstruction projects where a small number of business and industrial properties would end up being assessed for large amounts, council members called for Marshall to reexamine its assessment policies.

“This has been under consideration for quite some time,” said Marshall Mayor Bob Byrnes.

Marshall City Attorney Dennis Simpson presented the proposed procedures to the council at its regular meeting. Council member John DeCramer said the council Ways and Means Committee had a chance to review the proposal, and council member Glenn Bayerkohler did his own analysis and review of assessment policies and procedures. DeCramer said the proposal tried to follow state statutes as fairly as possible.

Legally, special assessments for city improvement projects can’t be more than the amount of the benefit a property receives from it. But cities may use a variety of methods to calculate special assessments, Simpson said. The proposed assessment procedures look at assessments in terms of both square footage and frontage.

“It requires a little more mathematical work” for the city, but offers a way to try and set fair assessment amounts, Simpson said.

Under the new procedures, the assessment to property owners for a city project would be the lower of two costs, either the actual assessable cost of the improvements per frontage-foot for that parcel, or a maximum assessable amount.

The maximum assessable amount for a property would itself be the lesser of two amounts, either a fixed amount per parcel, or a fixed frontage-foot amount. The per-parcel maximum assessment would be $5,700 for a residential property. For commercial properties, the per-parcel maximum would be calculated by multiplying $5,700 by the equivalent number of average residential lots that would fit in the commercial property’s square footage. For the fixed frontage-foot maximum, the city’s formula would take into account factors like street width, strength, and frontage-feet of the property.

The proposed assessment procedures could mean commercial and industrial property owners are assessed substantially less than they would have been before, city staff said. As an example, the city council agenda packet applied the new assessment methods to eight properties that would be assessed for street and utility work on Michigan and Superior Road in the Marshall industrial park. The proposed assessments were more than 30 percent lower than the city’s original calculation, which used a rate of $166.08 per linear foot.

Under the new procedures, the total amount assessed to the eight properties would be about $350,000 instead of $552,000. Individual property assessments ranged from about $8,000 less than the original calculation, to over $73,000 less, in the case of the Schwan’s Food Manufacturing property on Superior Road.

Simpson and city staff said the new assessment procedures should still allow Marshall to meet state legal requirements, that assessments account for at least 20 percent of costs for a street reconstruction project.

“I think this is a good policy going forward,” said council member James Lozinski.

Council members also praised Bayerkohler, a member of the council Ways and Means Committee, for his efforts analyzing special assessment procedures.

“I think Councilman Bayerkohler … put an unbelievable amount of work into this,” said council member Russ Labat.

Council members voted to approve the new assessment procedures.