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City attorney: Mercer cannot unilaterally remove special-assessment liabilities; residents may be billed retroactively
Summary
Wilson Law Firm attorney Jim Wilson told the City of Mercer council that special-assessment districts are legally binding after the statutory protest period; the city reports unpaid principals of $376,179.43 on the water loan and $261,711.76 on the sewer loan, and said residents may be billed retroactively from 2015.
Jim Wilson of Wilson Law Firm told the City of Mercer council on Feb. 13 that once a special-assessment district is created and the council completes the statutory process, assessments are effectively locked in after the 30-day protest period.
Wilson told the council that the process requires the city to pass a resolution creating the district, determine the district boundaries and properties, and rely on an engineer’s report outlining the purpose, feasibility and estimated costs. After council approval there is a 30-day window for property owners to protest; the state provides a six-month 'safe harbor' to file an appeal in District Court. "The city council has absolutely no authority to do that with regards to the assessment," Wilson said, explaining that only a court order can alter finalized assessments.
Wilson said that the existence of infrastructure on a parcel does not determine assessed liability: "the fact that you are not hooked up to it or using it at all has no bearing on the assessments at all." He explained that any deficiency due to miscalculation by the city could create city liability, but nonpayment by residents does not relieve their assessed obligation. Certified delinquent water bills are turned over to the county in the fall and can be placed on property taxes; after three years of nonpayment the city can foreclose because special assessments are a lien against property.
Council members and an attendee asked procedural questions. Randy Zinke asked whether a property with no improvements would be entitled to city-provided water if the owner did not plan to build; Wilson said the engineer’s report indicates curb stops are in place and the owner would be responsible for the service line to the curb stop. Attendee Betty Schatz asked whether the assessments would show up as a monthly charge; Randy Zinke said the city intends to bill retroactively from 2015 to present and that residents who have not been billed previously will need to set up new accounts. Mayor Lori Stute said the original water loan was $429,000.00 with an unpaid principal of $376,179.43 plus interest, and the original sewer loan was $287,000.00 with an unpaid principal of $261,711.76 plus interest.
The council said it will review 2015 records to determine which properties have paid and how much; Auditor Tonya Wellington was reported to be working on locating needed information for 2018 audit records.
