Assessment Districts

About Assessment Districts:

Assessment Districts (“AD”) have been in existence since the early 1900s and are an alternative method of financing certain public improvements; however, unlike Community Facilities Districts, only special (as opposed to general) benefit may be assessed. Assessment district formation has become a more stringent process over the past few years due to recent litigation concerning special assessments and property-related fees and charges, including water, sewer and trash rates. In particular, general benefit (benefit to property outside of a district) must be sufficiently quantified in accordance with substantive requirements of Proposition 218.

K&G Public Finance principals Lyn Gruber and Scott Koppel are leading authorities on Proposition 218 compliance, and together have formed hundreds of special districts. Common uses include structures such as sewers, roads, utilities, flood control, open space, etc…

Assessment District Structure
  • Only special benefit can be assessed
  •  Limited flexibility in providing exemptions
  •  Property owner ballot protest procedure
  •  Ballot weighted on assessment amount
  •  Lien placed on property
  •  Engineer’s Report
    • Describes boundaries of AD
    • Determines special benefit
    • Assessment amounts
    • Method of apportioning assessments
  •  Mailed ballots
  •  Simple majority (weighted assessment) required to form AD

The acts authorizing the establishment of assessment districts are:

Streets & Highways Code Section 5000 et seq – The Improvement Act of 1911

  • Can be used by counties, cities and other municipal governments
  • fund infrastructure projects and also fund maintenance of improvements

Streets & Highways Code Section 10000 et seq – The Municipal Improvement Act of 1913

  • Can be used by counties, cities, other special districts and joint powers authorities
  • Fund basic infrastructure needs, water, electrical, gas and lighting infrastructures, and public transit facilities.

Streets & Highways Code Section 8500 et seq – The Improvement Bond Act of 1915

  • Usually used in conjunction with the first two aforementioned acts to finance the improvements through the issuance of bonds

To review the Government Code Sections mentioned above, visit the Official California Legislative Information website and enter the Code Section(s) into the search box. Visit http://leginfo.legislature.ca.gov.