The State Defines Three Different Funding Tools — This Charge Fits None of Them
There has been ongoing confusion about how the Saddleback Road District funds its operations. The charge imposed on landowners is often described as a “special assessment” or a “levy.”
Under South Dakota law and guidance, those are not interchangeable terms—and neither appears to describe what is actually being done.
What the State Recognizes
The South Dakota Department of Revenue directs the public to guidance from the South Dakota Municipal League for understanding local financing tools.
That guidance identifies two distinct mechanisms relevant here:
1. Special Assessments
Special assessments are:
- Charged to property that benefits from an improvement
- Based on measurable benefit
- Not necessarily equal across properties
They are tied to statutes such as South Dakota Codified Laws § 9-43-76, which connects assessments to property that is benefited.
2. Maintenance Fees
The same guidance separately describes maintenance fees:
- Charged for ongoing upkeep of improvements
- Treated differently from special assessments
- Specifically authorized for municipalities
Importantly, the guide distinguishes these from special assessments—it does not treat them as the same thing.
3. Taxes (Levies)
Taxes—often referred to as levies—are governed by the South Dakota Constitution Article XI § 10.
Taxes:
- Must be applied uniformly
- Are imposed under taxing authority granted by statute
- Are subject to strict constitutional requirements
Where the Problem Arises
The current system appears to impose:
A flat, identical charge on every landowner
This creates a fundamental issue.
Why It Is Not a Special Assessment
A special assessment must be based on benefit to property.
A flat per-landowner charge:
- Does not measure benefit
- Does not vary based on frontage, usage, or impact
Therefore, it does not fit the definition of a special assessment.
Why It Is Not a Tax (Levy)
A levy:
- Must be imposed through authorized taxing procedures
- Must comply with constitutional and statutory requirements
Road districts do have limited taxing authority—but it must be exercised as defined by statute, not by creating alternative structures.
A flat fee imposed outside those requirements is not simply a “levy” by another name.
Why It Is Not a Maintenance Fee
The Municipal League guidance makes clear:
- Maintenance fees are a separate category
- They are authorized for municipalities
There is no clear statutory authority granting road districts the same power to impose standalone maintenance fees.
The Core Issue
South Dakota law and guidance recognize distinct tools:
- Special assessments → based on benefit
- Taxes (levies) → imposed uniformly under taxing authority
- Maintenance fees → separately authorized and defined
A flat per-landowner charge does not clearly fit into any of these categories.
A Simple Question
Given the State’s own definitions:
What is the legal basis for a flat, uniform charge that is not tied to benefit, not imposed as a levy, and not clearly authorized as a maintenance fee?
Until that question is clearly answered, the classification—and legality—of the charge remains open to question.