## Facts

- A township ordinance designated new paving and curbs on portions of eleven residential streets as “local improvements” financed partly by special assessments against nearby benefited properties under N.J.S.A. 40:56-1 et seq.
- Assessment commissioners were appointed under N.J.S.A. 40:56-22 to apportion the improvement costs among 313 residential properties; owners of 74 properties appealed.
- The commissioners allocated costs using a cost-per-front-foot (frontage) formula and conducted visual inspections to adjust amounts based on perceived special benefit to each lot.
- Evidence showed no individual assessment exceeded the parcel’s increase in market value attributable to the improvements, and the aggregate of assessments did not exceed the township’s total improvement costs.
- Property owners argued the front-foot method failed to account for differing degrees of benefit and resulted in discriminatory assessments.
- The Law Division vacated the assessments and remanded for reassessment, treating the methodology as improper; the Appellate Division remanded for individualized reassessment by the trial judge while retaining jurisdiction.
- The Supreme Court of New Jersey granted review to address the validity of the method, the benefit limitation, and the proper remedy.

## Issues

1. Whether a municipality may use a cost-per-front-foot formula, combined with commissioners’ judgment after inspection, to apportion special assessments consistent with statutory and constitutional limits.
2. Whether particular assessments were invalid because they exceeded the “peculiar benefit” to the assessed parcel, measured by enhanced market value from the improvement.
3. Whether the proper remedy was to invalidate the assessment scheme wholesale or to correct only those assessments shown to exceed special benefit.

## Decision

- The court affirmed in part and reversed in part.
- A front-foot formula was held not inherently invalid and could be used as an apportionment tool when applied with informed judgment and individualized inspection.
- The court required reductions for any parcels where credible evidence showed the assessment exceeded the parcel’s enhanced market value attributable to the improvement.
- The court rejected a categorical invalidation of the assessment method and favored a tailored remedy correcting only proven over-assessments.

## Legal Principles

- A special assessment for a local improvement must reflect the special benefit to the parcel and may not exceed the parcel’s “peculiar benefit, advantage or increase in value,” commonly shown as enhanced market value.
- The aggregate total of special assessments may not exceed the municipality’s cost of the local improvement; any balance must be borne by the municipality through general taxation or other lawful means.
- Standardized formulas (including cost-per-front-foot) may be used to approximate relative benefits if not rigidly applied and if subject to adjustment where they yield assessments disproportionate to actual benefit.
- Disparities in assessment-to-benefit ratios do not by themselves establish illegality; the controlling constraint is a reasonable relation to benefit and the absence of arbitrary or clearly disproportionate burdens.

## Conclusion

The New Jersey Supreme Court approved the township’s general use of a front-foot allocation method when tempered by commissioners’ individualized judgment, but required that any parcel’s assessment be reduced to the extent it exceeded that parcel’s demonstrated enhancement in value from the improvement.


McNally v. Township of Teaneck, 75 N.J. 33, 379 A.2d 446 (N.J. 1977)