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MEMORANDUM TO: Scott T. Anderson FROM: Stacey L. Wilson DATE: February 7, 2003 SUBJECT: Special Service Districts File No. 4002(1 )-000 I This memorandum addresses the steps the Roseville City Council must take to establish a special service district to finance the burying of electric power lines along County Road C in Roseville. The City of Roseville has the authority, under state law, to establish a special service district by ordinance.l See 1995 Session Laws, Chapter 264, section 39. Minnesota statute Chapter 428A governs the establishment and operation of a special service district, stating a "special service district means area within the city where special services are rendered and the costs of the special services are paid from revenues collected from service charges imposed within that area." Minn. Stat. S 428A.0, subd. 4. Under Chapter 428A, Roseville could impose an additional tax on the property owners within a designated service district, as long as the charge is reasonably related to the ~ervices Erovided and is as nearly as 20ssibl!U?~~ortionate to the cost of furnishing lhe.send.c.s;. S 428A.02, subd. 3. Although all types of property can be included within the designated special service district, only property which is subject to the general property tax and used for commercial, industrial or public utility purposes (or is vacant land zoned or designated on a land use plan for commercial or industrial use) can be subject to an additional charge. S 428A.02. It does not appear that residential property can be subject to an additional tax within a special service district. Property that is exempt from taxation under S 272.02 is cxempt from any service charges based on net tax capacity. S 428A.03, subd. 2. Furthermore, the City may not impose a service charge to finance a special service if the service is ordinarily provided by the City from its general fund revenues unless the service is provided in the district at an increased level. S 428A.03, subd. 1. 1 This enabling legislation is only effective for special service districts created prior to June 30, 2005. New enabling legislation will be required for Roseville to establish a special service district after this date.