Section 5.31 Special Improvements and Special Assessment Financing

• Library: Local Government Deskbook (2017 Ed.)

4. (§5.31) Special Improvements and Special Assessment Financing

“Special or local improvements” and “special assessments” are the terms ordinarily used to describe borrowings by municipalities to finance public improvements that are local and not general in nature, such as streets, sidewalks, and sewers serving a limited area. Local improvements confer a special benefit on certain limited property, and the costs, therefore, are charged against the property benefited through special assessments and not against the city at large. If this form of financing is not available, the cost has to be paid by all taxpayers. Thus, special assessment financing offers some relief to a city’s general budget.

The principles relating to public improvements, both general and special, are covered in Chapter 8 of this deskbook. This section is concerned with the financing of special improvements, but the principles and decisions relating even to that limited subject are so voluminous that this section can deal with them only in general terms. Volume 14 of Eugene McQuillin, The Law of Municipal Corporations (3^rd ed. 2005–2008 and 2016 C. Supp.), is devoted entirely to the subject and contains a useful and detailed discussion of these matters.

Most states have constitutional or statutory provisions that allow municipalities to issue general obligation bonds to finance local improvements that are to be paid from special assessments without any vote of the electors. But in Missouri, this general obligation financing is limited by article VI, § 26(d), of the Missouri Constitution, which provides that a city, by a vote of the electors, may issue general obligation bonds of up to ten percent of the city’s assessed valuation to acquire rights of way and construct, extend, and improve streets and sanitary or storm sewers. The governing body may provide that any of the cost of these improvements be levied and assessed against the property benefited and that the city collect special assessments as reimbursement for the amounts paid or to be paid by it on the bonds issued for the improvement. The constitutional provision makes no reference to how the assessment process is carried out. In City of Raytown v. Kemp, 349 S.W.2d 363 (Mo. banc 1961), it was contended that the failure to specify the procedure rendered the constitutional provision ineffective, at least without supplemental legislation. The Court held, however, that the constitutional provision was self-executing and that the appropriate procedure could be added by ordinance. Id. at 367. The bonds were determined to be general obligations of the City as specified in the constitutional provision.

Detailed statutory provisions addressing special improvements, special assessments, and the issuance of tax bills are covered in Chapter 88, RSMo, some sections of which apply generally to all cities, although particular sections are limited to cities of certain classifications or having specified populations. Special charters and constitutional charters also contain applicable procedures, and the powers of constitutional charter cities are further broadened by the decisions on the home rule amendment to the constitution as discussed in Chapter 1 of this deskbook.

The statutory provisions that will probably be used by most cities appear in §§ 88.811–88.861, RSMo 2016, which apply to third and fourth class cities, cities having special or constitutional charters, and towns and villages. In general, §§ 88.811–88.861 grant authority for:

· constructing, repairing, guttering, and curbing sewers,

...