Special assessments are

“Compulsory charge(s) placed…upon real property within a pre-determined district [known as a special improvement district (‘SID’)] made under express legislative authority for defraying, in whole or in part, the expense of…permanent public improvement(s)”¹ such as streets, sidewalks, curbs and gutters, streetlights, sewer and water facilities, etc². They are secured by “lien(s) on the propert(ies assessed) until…Typically…bonds…(are issued) to cover the cost(s) of…(SID) projects…Assessments (principal and interest) are typically billed…collected…and used to pay the debt service and administrative expenses (on those bonds) over a designated period of years.”³

Thus according to City of Reno v. Folsom, 86 Nev. 39, 464 P.2d 454, 455 (1970),

“A special assessment tax is predicated upon the theory…the proposed improvements of the assessment district will result in a (special) benefit⁴ (over and above that received by the general public) to those property owners included in the assessment.”⁵ This is the very essence of and the only justification for the special assessment⁶.

Thus “absent a benefit to the propert(ies) assessed,

Most manifestly we have a special tax upon a minority of the property owners, which…is special, unequal…ununiform…for the benefit of the public”⁷ and thus “illegal and void.”⁸

Moreover, because “no assessment shall be imposed on any parcel which exceeds the reasonable cost of⁹, and no greater than¹⁰, the proportional special benefit conferred on that parcel,”¹¹ and certainly not “the cost to fund an Agency’s ongoing budget,”⁹ government is required to present a “detailed analysis on how specific properties, blocks, school districts, or even cities would benefit from their proximity to”² the public improvements the subject of a proposed special assessment. In other words, simply taking government’s “projected annual budget (divided)…by the number of properties on the tax rolls in the district”¹² won’t suffice¹³. Therefore “an assessment calculation that works backward by starting with an amount taxpayers are likely to pay, and then determines an annual spending budget based thereon¹³, does not comply with the law governing assessments.”

Because special assessments are “charged only to…property in (a) neighborhood that will benefit from the project…

Special assessment tax(es) may not be levied against an entire municipality…to pay for special benefits for the few, and the few specially benefited should not be subsidized by the general public¹⁴ as a whole. Because if “everything is special, then nothing is special. That is, the presumption that every project undertaken by a (GID) is equally beneficial to all of the properties within the district, would effectively nullify the requirement that an assessment valuation be fixed…in proportion to the benefits to be derived from the project.”¹⁵.

Finally, although in a vacuum there can several different types of real property “assessments,” insofar as GIDs are concerned, the power to defray assessments is limited by NRS 318.235(1)

“For such part of the expenses of making any public improvement (for purposes of implementing any one, all or any combination of basic powers stated in NRS 318.116 granted to any district in proceedings for its organization or in any proceedings for its reorganization or as may be otherwise provided by law)…upon lands and premises abutting upon that part of the street or alley so improved or proposed so to be (improved), or the lands abutting upon the improvement and the other lands as…as the Board (may) determine by an affirmative vote of at least two-thirds of its members…(or) in the opinion of the Board (is)…specially benefited by the improvement.”

Therefore the elements of a special assessment, insofar as GIDs are concerned, can be summarized as

1. A charge against real property for a public improvement;

2. Which specially benefits the property assessed;

3. To implement any one, all or any combination of the basic powers stated in NRS 318.116;

4. Which have expressly been granted to the GID by its County Board of Commissioners either in the GID’s initiating ordinance, or in proceedings to add basic powers not provided in its formation as supplemented by the sections of this chapter¹⁶ such as NRS 318.077;

5. For a street, alley or other improvement or proposed improvement determined by affirmative vote of at least two-thirds of a GID Board’s members¹⁷;

6. Which does not exceed the reasonable cost of the proportional special benefit furnished.

So there you have it. Only if the above criteria fit the charge, shall “the assessed property owners (pay)…for the benefit they receive. If it does not, the assessment effectively amounts to a special tax…for the benefit of the general public.”¹⁸ And therefore, it is invalid¹⁹.

And now you know!

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1. See Knox v. City of Orland, 4 Cal.4th 132, 141-143, 14 Cal.Rptr.2d 159 (1992).
2. “Typically…special assessments…are used for the extraordinary expense of a (particular) project that benefits the community. For example, a town might levy a special assessment tax to build a public recreation center or a park.” Or it may pay for “infrastructure improvements such as new roads, street lights, or sewer, stormwater, and water connections to the municipal supply [see https://www.proplogix.com/blog/whats-so-special-about-special-assessments/]. In fact if the reader studies the District’s early history, he/she will discover that some of the first actions its Board took was to issue bonds for the construction of public water and sewer systems, public streets and storm drainage. The servicing costs associated with those bonds were specially assessed against those real properties which were directly and specially benefited [see our How, When, And Why The Incline Village General Improvement District Was Created discussion].
3. Go to https://www.clarkcountynv.gov/government/elected_officials/county_treasurer/understanding-sids and https://www.washoecounty.gov/treas/SpecialAssessments.php.
4. “Benefit in this sense has been well defined (as)…the increased value of the property.” However, at least in California, the “general enhancement of property value expressly does not constitute (a) special benefit” [see Ventura Group Ventures, Inc. v. Ventura Port Dist., 24 Cal. App. 4th 1089, 1105, 104 Cal.Rptr.2d 53 (2001); Silicon Valley Taxpayers Assn., Inc. v. Santa Clara County Open Space Dist., 44 Cal.4th 431, 443, 79 Cal.Rptr.3d 312 (2008)].
5. The “special assessment is ‘levied against (that) real property particularly and directly benefited by a local improvement in order to pay the cost of that improvement.'”¹
6. See Silicon Valley Taxpayers Assn., supra, at 44 Cal.4th 442.
7. See Spring Street Co. v. City of Los Angeles, 170 Cal. 24, 148 P. 217, 219 (1915).
8. See City of Reno, supra, at 464 P.2d 456; Knox, supra, at 4 Cal.4th 142-143.
9. See County of Fresno v. Malmstrom, 94 Cal. App. 3d 974, 984, 156 Cal.Rptr. 777 (1979); Ventura Group Ventures, Id.
10. See Ventura Group Ventures, supra, at 24 Cal. App. 4th 1106.
11. See Silicon Valley Taxpayers, supra, at 44 Cal.4th 456.
12. Exactly what the District does in calculating the Recreation (“RFF”) and Beach (“BFF”) Facility Fees.
13. See Silicon Valley Taxpayers, supra, at 44 Cal.4th 457.
14. See Silicon Valley Taxpayers, supra, at 44 Cal.4th 442.
15. See Ventura Group Ventures, supra, at 24 Cal. App. 4th 1107.
16. See NRS 318.055(4)(b).
17. See NRS 318.235(1).
18. See Spring Street Co., supra, at 170 Cal. 30.
19. See Knox, supra, at 4 Cal.4th 1138.