Court finds little special benefit to justify special assessment for road project

by Gary Taylor

Belling, et al v. City of Urbandale
(Iowa Court of Appeals, July 13, 2011)

Plaintiffs own residential acreages of various sizes along 156th Street in Urbandale. The area has experienced development over the past ten years, including the addition of a nearby elementary school. In response to the growth in the area, the City initiated a project to replace a section of 156th Street and to build new sidewalks.  The roadway project consisted of replacing the existing two-lane, twenty-four-foot wide sealcoated asphalt road with a four-lane divided parkway made up of a twenty-eight-foot wide green median between two twenty-six-foot wide sections of road. The sidewalk project added a four-foot wide sidewalk on the east side of the street and an eight-foot wide multi-use path on the west.

The only construction cost included in the roadway assessment was the cost of paving a thirty-one foot wide street. The assessment did not include other construction costs, such as grading, subgrade preparation, storm sewers, water mains, sanitary sewers, or street lights. The special assessment for the new road was spread among the property owners by the use of the modified Flint Formula, which “focuses on the frontage size and depth of the abutting property, and assigns benefit points for each tract.?  The total costs of the project were $5,991,715.77. The city assessed $1,337,726.81, approximately twenty-two percent of this cost, to the abutting landowners who were plaintiffs in the suit.

Plaintiffs brought an action against the City, contending the assessments exceeded the special benefits they received from the project. The plaintiffs testified at trial that they received very little benefit from the project. Each plaintiff also testified about numerous negative impacts of the project, including increased noise, trash, traffic, and maintenance (primarily snow removal and mowing); decreased safety, privacy, and accessibility, and potential liability. The plaintiffs testified this project produced a great public benefit for the surrounding neighborhoods and nearby school but provided very little special benefit to their properties.

The plaintiffs’ expert witness, a former engineer for the City of Des Moines, testified the City’s use of a modified version of the Flint formula in spreading assessments – referred to as the Urbandale Curve – was improper due to the irregular topographical features, size, and shape of the properties involved. He criticized the strictly mathematical approach of the formula for failing to properly account for special and general benefits. He stated bare land does not benefit unless it can be subdivided in some way, and that owners of large lots, like the plaintiffs, received no more or less special benefit than people who lived on smaller lots and incurred smaller assessments.

The City presented evidence that the Flint formula has for decades been the preferred method of spreading assessments among property owners in Iowa.  The Urbandale Community Development Director testified as to the benefits of the paving, including increased property value for the plaintiffs in “at least the amount of the assessment.” The Urbandale City Engineer testified the City used a modified version of the Flint formula, which was an accepted engineering practice. Another engineer who reviewed the assessments in this case found nothing improper in actions taken by the City.

The district court concluded the assessments were excessive and reduced them, finding the plaintiffs had proved the assessments exceeded the special benefit to their properties. The court reduced the roadway assessments by seventy-five percent and the sidewalk assessments by fifty percent. The district court also provided, “Each assessment shall be further reduced by 10% if paid in a lump sum within 90 days of the exhaustion of all appeals.” The City appealed.

Iowa Code 384.61 provides: ”The total cost of a public improvement . . . must be assessed against all lots within the assessment district in accordance with the special benefits conferred upon the property, and not in excess of such benefits.”  The Court of Appeals looked to previous cases which have established the factors to be used in differentiating between special benefits conferred uniquely on abutting landowners, and general benefits accruing to the community at large.  Those factors include:

the present and future use of the abutting property, the increase in the market value occasioned by the improvement, the size and shape of the property, the proximity of the property to the improvement, the amount of property fronting the improvement, the needs of the property owners served by the improvement, and the primary purpose behind the improvement.

The Court looked at these factors in order, finding that (1) each of the properties was at its best use; (2) the record contains no evidence that the improvement resulted in an increased market value for any of the properties; (3) the parcels at issue varied in size and shape, but all parcels were along 156th Street and were fairly large in size; (4) the land was on an asphalt sealcoated road before the paving project, and thus the project had little effect to reduce noise, dust, and maintenance costs, but did improve the aesthetic value, fire and police access, and ease in snow and ice removal; and (5) the primary purpose of the improvement was clearly to afford a general benefit to the public because the new road was considered an arterial road and was designed to handle heavy traffic from the community as a whole. The Court concluded that even after the city discounted the cost of the project in assessing the abutting landowners the assessments still exceeded the special benefits conferred on the properties.

The Court reviewed the use of the Urbandale Curve method of assessing properties and found it consistent with caselaw.  Noting first that any method of assessing special benefits will necessarily draw arbitrary lines between special and general benefits, the Court went on to state that the city must “examine each affected parcel and its particular features to determine whether the assessment exceeded the special benefits conferred on the land….A practical overview of all the surrounding circumstances must be considered.”  The Court concluded that failure to do so resulted in excessive assessments on some properties. For example the owner of a single family residence should not have been assessed the same amount a nearby townhome/condominium development. “Certainly, the project conferred more benefits on an entire townhome/condominium development than it did on a single-family residence.”  The Court further observed that the potential special benefits identified by the City in effect confer very little, if any, benefit on bare land. The Court concluded it was appropriate for the district court to reduce each roadway assessment by seventy-five percent.  Following the same line of reasoning the Court also affirmed the portion of the district court’s judgment that reduced the sidewalk assessments by fifty percent.

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