Wisconsin Stat. sec 66.0707(1) authorizes a municipality to levy a special assessment on property in an adjacent city, village or town, if the property benefits from the work or improvement. However, such a levy must be approved by resolution of the governing body of the municipality where the property is located.

Likewise, deferred special assessments are authorized by sec. 66.0715(2)(a), Stats. However, there is no mention of such deferrals with regard to assessments against property outside the corporate limits of the assessing municipality that may later be annexed and hooked up. In light of the specific statutory requirement for obtaining approval of a special assessment levy against a property in an adjoining city, village or town by the governing body of that municipality, the validity of a deferred special assessment against such a property without that approval is questionable.

An alternative method of recovering the costs of extraterritorial improvements is to levy a hook-up charge (also referred to as an initiation or connection charge) when a property is annexed and connects to the water or sewer system. Under this approach, main extensions are financed by (a) special assessment or (b) customer contributions, with the customer contributions based on what would have been specially assessed. Customers connecting within a specified time (usually 20 years) to existing mains reimburse the contributors under (b). Whether reimbursement of the municipality or utility for its costs can be required of persons later connecting depends upon the facts and the language of the municipal utility's rule.