Appeals Court Rules Osceola Taxpayers Have Standing to Challenge Establishment of TIF District

by Eric Christianson

Brueggeman vs. Osceola
(Iowa Court of Appeals, June 7, 2017)

In the spring of 2015, the City of Harris was ordered by the Iowa Department of Natural Resources to update its aging sewer system and lagoon. Harris, population 170, lacked adequate resources for the project, so the city sent a letter to the Osceola County Board of Supervisors, “asking for help with possibly doing a TIF [Tax Increment Financing district] on the windmills for infrastructure within the City.” The county agreed to help establish an urban renewal area including new windmills located in the county and the sewage lagoon in the City of Harris.

In a meeting on October 20, the board of supervisors passed a resolution to establish the urban renewal area and approve the urban renewal plan. At the same meeting, the board also introduced Ordinance No. 47, which was to establish the TIF district, for its first consideration. On October 27, the board of supervisors gave Ordinance No. 47 its second consideration.

On November 3, the plaintiffs in this case, filed a petition for writ of certiorari and declaratory judgment. The plaintiffs, who are resident taxpayers of Osceola County, alleged that the city and county had “adopted a Resolution that created an urban renewal area that includes the City of Harris and wind energy conversion property […] located outside of the City of Harris[… The] resolution is unlawful because it violates Iowa Code Chapter 403 and the Iowa Constitution.”

On November 10, the board of supervisors held the final consideration of Ordinance No. 47 and adopted it. Then on November 30 the board held a special session and entered into a written urban renewal joint agreement with the City of Harris, “confirming prior verbal agreement and understanding.”

In February 2016 the plaintiffs filed a motion for summary judgment. They alleged that the county had acted illegally in establishing the urban renewal area before the joint agreement had been signed. Additionally, they alleged that the urban renewal area was not an “area” because the wind energy conversion property is not connected to the sewage project in Harris. They claimed that they had standing to sue because they were harmed as taxpayers in Osceola County.

Osceola County and the City of Harris filed a motion for summary judgment, and the district court granted it, finding the plaintiffs lacked standing to challenge the resolution and their claims involving the ordinance were untimely. The final passage of the ordinance took place after the plaintiffs filed their petition. The plaintiffs’ petition was dismissed. On appeal, the plaintiffs challenged the district court’s ruling and maintain that the merits of their motion for summary judgment should have been granted instead.

On June 7 the Iowa Court of Appeals considered the issues of the timeliness of the petition as well as the standing of the plaintiffs.

The taxpayers argued that each of the considerations of the ordinance was a challengeable action. Here, the Iowa Court of Appeals agreed that the plaintiffs’ challenge to the ordinance was untimely. Iowa case law provides that the challengeable action occurs “when the underlying proceeding becomes final.”

With regards to standing, the Court of Appeals agreed with the plaintiffs that as residents and taxpayers of Osceola county they stood to be harmed citing an earlier case that stated: “by its nature, TIF diverts property tax revenue that would otherwise be available to the regular taxing district.” Further the court of appleals found that although the plantiffs were untimely with their challenge to the passage of the ordinance, the plaintiffs did have standing to challenge the earlier resolution. It is reasonable to assume that the passage of the resolution meant that the ordinance would be passed as well.

The Court of Appeals remanded the case back to district court for further proceedings.

When suing county, failure to serve notice on county is not a minor procedural error

by Gary Taylor

Dewit and Dewit v. Madison County Zoning Board and Madison County Zoning Board of Adjustment
Iowa Court of Appeals, September 13, 2017

In March 2015 the Madison County Zoning Office filed civil infractions against the Dewits for several zoning ordinance violations.  The case number assigned to these infractions was CVCV034188.  These infractions were resolved through a consent order in September 2015 which required the Dewits to abate the violations within six months (by February 2016).  After the consent order was issued, the Dewits filed an application for an agricultural exemption from the county’s zoning ordinance, which the county zoning administrator denied.  On appeal, the Madison County Zoning Board of Adjustment (ZBA) affirmed the denial.

On April 20, 2016 the Dewits filed a petition for writ of certiorari challenging the ZBA’s decision; however, they filed it in the civil infraction case CVCV034188.  The county attorney accepted service of the petition, but the original notice was not included in the materials sent to or accepted by the county attorney.  The county moved to dismiss the petition on the ground that the petition should have been docketed as a new action and not as a filing in the civil infraction case.  On June 7, 2016 the district court denied the motion to dismiss, and ordered the clerk of court to transfer the petition and all related filings to the appropriate docket and to assign a new case number to the petition.

The ZBA then filed a motion to dismiss on September 1, 2017 for failure to timely serve original notice on the board.  The next day the Dewits served notice on the ZBA, but this was 135 days from the original filing of the petition on April 20.  (Iowa Rules of Civil Procedure require original notice to be served on a defendant within 90 days of filing a petition).

The Dewits contended that the original notice was served on the ZBA 80 days from the day the district court transferred the petition to a new docket with a new case number; however, at the time the district court specifically ordered that the petition “would relate back to and be deemed to have commenced on the date of filing, April 20.” Thus service of the original notice did fall outside the 90 day window.

The Dewits also contended that the county attorney’s acceptance of the petition alone is sufficient to comply with Iowa Rules of Procedure.  The court rejected this as well.

The original notice and petition are separate and distinct….The contents of the original notice are prescribed by rule.  In contrast, the petition is a pleading that sets forth a simple and concise statement of the claim or claims at issue. [While] it is true Iowa courts are committed to liberal construction of the rules of procedure to insure resolution of disputes on their merits, the failure to timely serve original notice cannot be deemed a minor or technical error.

The district court did not err in dismissing the Dewits’ petition.

Courts Defer to Staff and Board of Adjustment Interpretation of Code

by Eric Christianson

Doss and Huffer vs. Ames Zoning Board of Adjustment
Iowa Court of Appeals, February 22, 2017

The City of Ames received a complaint that Angela Doss and Duane Huffer were building a fence in violation of the city’s zoning ordinance. The fence was 6 feet high and located in their backyard abutting other residential properties. The city determined that the fence was indeed in violation of the following section of code and notified the homeowners in a letter.

The maximum height of fences in any setback abutting a street right-of-way is four (4) feet, except that up to six (6) feet of fence is allowed in any side or rear setback if:

(a) The lot does not abut the front yard of any other residential property along the same side of the street;
(b) The fence is at least (5) feet from the property line abutting a street right-of-way.

-Ames City Ordinance § 29.408(2).

The homeowners appealed staff’s decision to the Ames zoning board of adjustment. The board unanimously denied the homeowners’ appeal. The homeowners appealed to district court alleging:

  1. the Board misinterpreted the ordinance because it was not clear on its face whether the semicolon between (a) and (b) meant “and” (conjunctive) rather than “or” (disjunctive);
  2. the city enforced the ordinance inconsistently, only in response to complaints;
  3. the city’s delay before sending the December letter precluded enforcement on procedural grounds and laches;
  4. the city’s interpretation of the ordinance creates a notice issue in violation of due process; and
  5. the city’s fence ordinance conflicts with Iowa’s partition-fence law.

The district court ruled that the partition-fence issue was not preserved for its review and resolved the four other issues in favor of the board of adjustment.

The homeowners appealed to the Iowa Court of Appeals. The court cited an earlier decision that, “the court may not substitute its decision for that of the board.” The decision of the board of adjustment is given a strong presumption of validity. In all other issues as well, the court affirmed the holding of the district court.

Dangerous Conditions Cause Mobile Home Park to Lose Legal Nonconforming Status

by Eric Christianson

Des Moines v. Ogden
Iowa Court of Appeals, June 7, 2017

Frank Ogden owns and operates a nonconforming mobile home park on the south side of Des Moines. He purchased the property in 2013 from his uncle. The property consists of a narrow u-shaped access road with mobile homes around the interior and exterior of this road. Although the 1953 Des Moines zoning ordinance prohibited mobile home parks in the city, the owner of the property obtained a certificate of occupancy for the mobile home park in 1955. The historical record is not clear, but its use as a mobile home park dates back to some time between 1947 and 1955.

The best record documenting historical use is an aerial photograph from 1963. The photograph depicts “permanent homes that are in close proximity to each other with additional structures attached to the homes.”

Current photographs depict the property as:

[A] congested, dilapidated, and hazardous jumble of structures. Many of the mobile homes are within feet of each other based on the addition of porches, decks, and living space. Residents park cars throughout the property narrowing portions of the already inadequate access road. Bulk trash items—such as tires, boats, and storage bins—are littered throughout the property. Grills, fences, gardens, and children’s toys also crowd the property.

The city did not issue any warnings or citations regarding the use of the property as a mobile home park until 2014. In 2014, a zoning administrator notified Ogden by letter of numerous violations of the 1955 Des Moines Municipal Code, under which the original certificate of occupancy had been awarded. These included setback violations, failure to maintain the access road, and additions to trailers among other issues. The letter also warned that the park’s violations posed a threat to the health and safety of the occupants.

Ogden did not take any action to remedy the violations. In October 2014, the city sought an injunction to close the park for the above listed violations. At trial the Des Moines Fire Marshall testified that the proximity of the mobile homes and the narrow access road created potentially dangerous conditions for residents.

The trial court found the fact that the occupancy permit was issued is proof enough that the property was in compliance with the above regulations at the time that the legally nonconforming use was established. This means that Ogden had the right to continue his nonconforming use subject to the laws in place in 1955 as long as the nature and character of the use as it existed in 1955 is not changed.

The court held that even under the laws in place in 1955, the certificate of occupancy should be revoked as the park poses a threat to “the safety of life or property”. The court also held that, “’use of [the] property has intensified beyond acceptable limitations’ because the conditions ‘pose a real threat in the event of an emergency.’”

Ogden appealed to the Iowa Court of Appeals arguing that the court was wrong to find that the nonconforming use posed a threat to life or property and that the use had been unlawfully expanded. He also argued that estoppel prevents the city from obtaining an injunction.

In addition to procedural questions relevant to this case the Court of Appeals examined the questions of nonconforming use and whether estoppel prevented the city from obtaining an injunction to close the park.

Nonconforming Use A nonconforming use is “one that lawfully existed prior to the time a zoning ordinance was enacted or changed, and continues after the enactment of the ordinance even though the use fails to comply with the restrictions of the ordinance.” A nonconforming use may continue indefinitely until abandoned, but it may not be “enlarged or extended”. The Des Moines Municipal Code adds that a nonconforming use may lose its protected status if discontinuance is “necessary for the safety of life or property”.

The Iowa Supreme Court has never ruled on whether the addition of structures or the expansion of homes in a mobile home park constitutes and an unlawful expansion of the nonconforming use. Other state courts, however, have found that replacing mobile homes with larger models or enlarging existing mobile homes in violation of setback requirements may constitute an unlawful intensification of the nonconforming use.

The Appeals Court found that:

Although this mobile home park has not changed in size or use, the record demonstrates it has grown within its borders in the numbers and location of structures attached to the mobile homes resulting in a narrowing of open space on the roadways and between the homes. […] these changes over a half century have enhanced and intensified the non-conforming use to the point where it is a danger to life and property. […] Ogden’s use of the property is not a lawful intensification of an existing nonconforming use. The present congestion and crowding between structures and narrowing the roadway changes the nature and character of the 1955 non-conforming use and presents a danger to residents and neighbors of the park.

Equitable Estoppel Further, Ogden argued that equitable estoppel bars the city from closing the mobile home park. The Court Defined equitable estoppel as, “a common law doctrine preventing one party who has made certain representations from taking unfair advantage of another when the party making the representations changes its position to the prejudice of the party who relied upon the representations.”

The court states that to prove estoppel Ogden must demonstrate:

  1. a false representation or concealment of material fact by the city,
  2. a lack of knowledge of the true facts by [Ogden],
  3. the city’s intention the representation be acted upon, and
  4. reliance upon the representations by [Ogden] to their prejudice and injury.

The court found that Ogden’s claim failed under the first element of the test. The city’s failure to enforce the zoning ordinance does not amount to false representation or concealment of material fact. The city does not notify property owners of every infraction. Instead the city’s enforcement is triggered by complaints.

The court affirmed the grant of the city’s request for an injunction against Ogden’s use of the property as a mobile home park.

Chief Judge Danilson partially dissented. He argues that the city failed to prove either that the mobile home part exceeded its original non-conforming use or that it poses a threat to the safety of people or property. In his opinion, there is no conclusive evidence of the condition or number of homes in the part in 1955, and the size and use of the park have not changed. He argues that although the condition of the park has likely deteriorated, there are less dramatic ways to improve conditions in the park.

Further, Danilson argues that there is insufficient evidence to conclude that the park poses a danger to people or property. The city or fire department have not taken any actions based on unsafe conditions, and the fire chief’s testimony was too general to draw any specific conclusions about the park’s safety.

Update: Johnson County Re-Zoning Application Goes Viral

by Eric Christianson

The Johnson County Board of Supervisors voted 5-0 Thursday, September 14, 2017 to deny the rezoning of 63 acres from Agricultural to Agricultural Residential. The board’s primary reasoning was the potential impact of such a large rezoning in a rural part of the county and the impossibility of negotiating a conditional rezoning without approval of the current title-holder. The board encouraged another application after the applicant obtains full ownership of the property.

A video of the board meeting is available here, and read an updated Press Citizen article here.

The original post is below:

An Iowa City resident’s attempt to rezone 63 acres of rural Johnson County has attracted international attention. Grant Schultz manages a 143 acre farm he calls Versaland in northeastern Johnson County. He is seeking the zoning change to allow him to build rental cabins and worker housing in addition to other accessory uses. Staff recommended against the rezoning because of the potential impact of a large land use change in a rural part of the county and the infrastructural improvements that would be needed to support the potential new uses. On August 14 the planning and zoning commission voted 5-0 to recommend to the board of supervisors that the rezoning be denied.

In response on September 8, Schultz created a 25 minute video with the headline “Johnson County Assaults Local Foods“. The video has, as of today, been viewed over 80,000 times and received comments of support from all over the world.

Johnson County has since published a memo refuting many of the points made in the video.

Additionally, Paul Durrenberger and Suzan Erem, founders of the Sustainable Iowa Land Trust, and owners of the property in question have published a blog post of their own entitled, “Grant Schultz: Facts to Consider”. They are opposed to the proposed rezoning.

The Johnson County Board of Supervisors will vote on the rezoning request Thursday September 14, 2017.

For more information read the Press Citizen article about the fight.

Iowa Law Limiting Occupancy Restrictions to go into Effect January 1, 2018

By Eric Christianson

House File 134 was signed into law on April 21 by Gov. Branstad limiting the ability of cities to set occupancy restrictions based on familial relationships. This law has appeared several times in various forms over the past few years in the Iowa legislature. It was opposed by many larger cities along with the Iowa League of Cities. It was supported by the Iowa ACLU as well as the Landlords of Iowa.

The bill amends Iowa Code 414.1 subsection 1, adding the bolded text:

a. For the purpose of promoting the health, safety, morals, or the general welfare of the community or for the purpose of preserving historically significant areas of the community, any city is hereby empowered to regulate and restrict the height, number of stories, and size of buildings and other structures, the percentage of lot that may be occupied, the size of yards, courts, and other open spaces, the density of population, and the location and use of buildings, structures, and land for trade, industry, residence, or other purposes.

b. A city shall not, after January 1, 2018, adopt or enforce any regulation or restriction related to the occupancy of residential rental property that is based upon the existence of familial or non familial relationships between the occupants of such rental property.

This change will mostly impact college towns which were actively trying to limit the number of students moving into historically single-family neighborhoods.

See coverage of the bill’s passage in the Des Moines Register and the Ames Tribune and Little Village to read more about how some communities have responded.

You can find a copy of the bill as well as its history here.

 

 

Only the Board of Adjustment can approve Special/Conditional Use Permits

by Eric Christianson

Holland v. Decorah

Iowa Supreme Court, April 2, 2003

This is an older case, a classic of Iowa planning and zoning case law. However, the issue of the role of the zoning board of adjustment is one that still comes up quite frequently.

In the late 1990s Wal-Mart began planning a new location in Decorah, Iowa. The location selected was located in the floodplain of the Upper Iowa River. To build there, Wal-Mart had to place fill in the floodplain. First, Wal-Mart obtained the required permits from the Iowa Department of Natural Resources. Then, Wal-Mart applied to the Decorah City Council for a permit to place fill on the floodplain. The city’s zoning code contained among its permitted uses in the F-1 floodplain district:

Dumping of approved materials for landfill purposes, subject to prior approval of the city council and appropriate state agencies. [emphasis added]

Following this section of city code, Walmart’s representatives appeared before the city council on August 15, 2000 and requested approval to fill the property. After a heated and confrontational public comment period, the city council approved the request by a vote of four to three. The council’s vote was only to approve the fill. It did not change the zoning of the area or approve of a site plan.

Previously, Upper Iowa Marine, which owns adjacent land, had attempted to dump fill in the floodplain. They also applied for and obtained the proper permits from the Iowa Department of Natural Resources. Instead of presenting their request to the city council. They applied for a special exception to the zoning ordinance from the zoning board of adjustment. The board of adjustment found the application inconsistent with the comprehensive plan and denied the request.

A group of citizens in Decorah filed suit, arguing that Wal-Mart’s request should have been submitted to the board of adjustment as Upper Iowa Marine had done rather than the city council.

The case hinges on two main issues (1) the authority of the board of adjustment and the city council and (2) definition of a special use.

Iowa Code 414.7 states that a city council should appoint a board of adjustment so that it, “may in appropriate cases and subject to appropriate conditions and safeguards make special exceptions to the terms of the ordinances…”

Further on in 414.12 Iowa Code defines the powers of the board of adjustment including, “to hear and decide special exceptions to the terms of the ordinance…”

Courts in Iowa have been very clear that no other entity has this power. In The City of Des Moines v. Lohner in 1969 the court said that the power to make special exceptions are “placed exclusively in the board [of adjustment] and effectively restricted by statute.” Likewise in Depue v. City of Clinton in 1968 the court asked itself, “[I]s the jurisdiction of the board of adjustment, conferred by sections 414.7 and 414.12 and exclusive jurisdiction? We think the answer[ is] affirmative.”

It is clear then in Iowa case law that approving special uses is the exclusive jurisdiction of the board of adjustment. At issue is whether conditioning a permitted use on “prior approval of the city council” was essentially the same as a permitted use. Wal-Mart argued that the council’s grant of permission was not a special exemption because it was listed as a permitted use and the council had only a “limited, technical review.” Walmart argued that the city council was not examining whether the proposed change was consistent with the city’s comprehensive plan. Instead they were simply ensuring that the appropriate permit had been obtained from the Department of Natural Resources and that the fill material was free from waste materials.

In its reasoning, the court took special note of the contested nature of the public discussion period before the vote at the council meeting. During this meeting evidence and opinions were presented on both sides and one council member even attempted unsuccessfully to convene a task force to study the issue further.

The issuance of special-use permits is quasi-judicial or administrative. […]  The problems with allowing a political, legislative body such as a city council to rule on applications of this nature (in addition to lacking statutory authority) are apparent in this case.  The city council had no hearing procedures, notice requirements, or the type of guidelines that would govern the board of adjustment.

Even on the cold minutes of the meeting, it is apparent the council would have known by the time the discussion was concluded, if they did not already know, they had a tiger by the tail.  The residents were deeply divided on the issue, raising concerns about the environmental impact, the fairness of the proceedings (especially in view of the fact the board of adjustment had denied a similar permit), and the prospect of 120,000 cubic yards of fill being placed in the floodplain in the event the DNR appeal was successful or the construction plans were thwarted for some other reason.

In the end, the court concluded that whether or not dumping fill in the floodplain was a special or conditional use in Decorah’s code, the city council’s actions violated state code.

If it was a special use, is clear that the city council had no authority to allow it. Even if it is not, however, it would violate chapter 414 of Iowa Code which requires that zoning be done “in accordance with the comprehensive plan.” In fact, Decorah’s comprehensive plan expressly addresses protecting its floodplains as natural resources “for use as permanent open space.” In making a decision in direct opposition to the comprehensive plan, the application of the ordinance would still be illegal.

 

Historical Note:

Walmart had already completed construction on the $20 million building that their superstore would occupy at the time of this decision. The building had been sitting vacant since the previous fall awaiting the outcome of this lawsuit. Eventually, the parties settled. Wal-Mart agreed to make a donation to the Decorah library and to fund a study of the floodplain. Wal-Mart also agreed to lease their old building the the city for $1 a year with all proceeds from subleases going to fund the construction of a river trail. The Wal-Mart, much like confusion over roles in planning and zoning, is still with us today.

Feeding Operation with 2,400 Hogs a Permitted Use

By Eric Christianson

Hoffman v. Van Wyk

South Dakota Supreme Court, August 9, 2017

In Douglas County, South Dakota, Nicholas and Donnelle Hoffman learned that their neighbor, Douglas Leubke, received a permit to build a hog confinement unit from the Douglas County Zoning Administrator. The unit is designed to house up to 2,400 hogs. The permit was made public at a County Commission meeting on September 10, 2015 without any prior public hearings. When the Hoffmans approached the administrator about the issuance of the permit, the administrator explained that the building would house less than 1,000 animal units and therefore did not constitute an animal feeding operation as defined by the ordinance. Under the ordinance, 2,400 hogs is equal to 960 animal units. For that reason, the building is a permitted use not requiring a public hearing.

On March 14, 2016, the Hoffmans applied to the circuit Court for a writ of mandamus to compel the administrator and commission to revoke the permit and put a halt to construction. On June 3, 2016 the Court held a trial and held that the facility was neither a “farm,” “ranch,” nor “orchard” and therefore did not fall under any of the permitted uses of the land. Despite this fact, the Court stated that a writ of mandamus could not be used to undo an act that had already been completed. Both the Hoffmans and the zoning administrator appealed.

The Supreme Court of South Dakota found the circuit Court had erred in holding that the facility was neither a “farm,” “ranch,” nor “orchard.” The ordinance defines farms, ranches and orchards as:

An area of twenty five (25) acres or more which is used for growing usual farm products, vegetables, fruits, trees, and grain, and for the raising thereon of the usual farm poultry and farm animals such as horses, cattle, hogs, and sheep, and including the necessary accessories used for raising, treating, and storing animal products raised on the premises; but excluding an Animal Feeding Operation.

The Hoffmans allege that Leubke does not use the additional land around the facility for growing grain or farm products in addition to feeding hogs; however Leubke does own the full 160-acre quarter section and grows crops on that land.

The Hoffmans also argue that the manure slurry storage pit under the confinement unit violates setbacks established for animal waste facilities. According to the code, such a facility, “shall be no closer than two (2) miles from… the Corsica Lake Recreation Area, and one half (1/2) mile from any… residential dwelling” The facility is less than two miles from the Corsica Lake Recreation Area and less than a half mile from the Hoffman’s residence. The Court interpreted this ordinance to apply only to Animal Feeding Operations not the permitted farm use in this case.

Finally the Hoffmans argued that the hand drawn plan submitted by Leubke to the administrator was insufficiently detailed to allow the administrator to issue the permit. The drawing was not detailed nor drawn to scale. The Court does appear to agree that the administrator had no discretion to approve a permit without all the required information, but finds that this is “ultimately beside the point.”

The Court finds that, “it is clear that the facility was a permitted use under the ordinance as part of a farm or ranch.”

Addition of Fact Sheets to the BLUZ

In addition to the regular updates on recent developments in planning and zoning in the Midwest we are making available fact sheets to address some common issues in planning and zoning.

These can be accessed by clicking on “Fact Sheets” on the bar to the left of the page. Over the next few weeks we will be adding more information and improving the organization.

Please let us know what you think and how we can improve!

IGFI Annual Fiscal Condition Reports for 2016 Released

The Iowa Government Finance Initiative (IGFI) Annual Fiscal Conditions report, for the Fiscal Year Ending 2016 for all 945 cities and 99 counties in Iowa have just been released. The reports provide an alternate perspective on local government finances and trends. The information in these reports will help local elected and appointed officials during their budgetary and planning processes.

These reports can be a valuable resource to communities in Iowa to keep tabs on economic, demographic, and fiscal changes taking place and to plan for the future. This is the fifth year of publication for these reports. While there have been some changes to the way data is presented, the information remains the same. These reports can be accessed on the Iowa Government Finance Initiative website.

IGFI is the public finance outreach wing of ISU Extension and Outreach. It provides resources and works with Iowa governments on a host of issues including finance and community economic development. The team working on county reports this year consists of Biswa Das, Cindy Kendall, Bailey Hanson, Liesl Eathington, May Beth Sprouse, Sandra Oberbroeckling, and Sandra Burke.

Questions on the report can be sent to Biswa Das at bdas@iastate.edu.