First Baptist Church of St. Paul and Church of St. Mary (the churches) challenged the 2011 right-of-way maintenance (ROW) assessment levied by respondent City of St. Paul (the city). The city maintains all of the streets and sidewalks within the city limits and uses an annual ROW assessment to recoup the costs related to street maintenance. The amount the city assesses each property depends on the property location, size, street material, and services provided.
The churches challenged the district court’s grant of summary judgment to the city, arguing that the city’s right-of-way maintenance assessment (1) is a tax, (2) does not meet the special-benefit standard, (3) is improperly based on estimated costs, (4) fails to comply with respondent’s charter and policies, and (5) is arbitrary and capricious.
The Court of Appeals affirmed, concluding that the assessment is a regulatory service fee, not a tax.