MN township not authorized to levy permit review expenses against landowner

by Rachel Greifenkamp

Great Western Industrial Park, LLC v. Randolph Township
Minnesota Court of Appeals, September 8, 2014)

South of the Twin Cities along the Minnesota-Wisconsin border lies Randolph Township. Here, Recovery Technology Solutions (RTS) was considering purchasing land from Great Western Industrial Park, LLC to use as the site for a facility for recycling asphalt shingles. RTS submitted an application to Randolph Township for a conditional use permit that was denied, and so RTS decided against purchasing the available land. After the denial of the application RTS received a letter stating that it was to reimburse the township for all expenses incurred in the application review, which totaled $31,666.41 (mostly legal and consulting fees). When RTS did not pay the expenses the township wrote a letter to Great Western (the landowner) notifying it of its responsibility for the expenses, as well as interest, late charges, recording charges, and attorney’s fees. The township also informed Great Western that the amount was going to be certified to the County Auditor for collection with the 2014 property taxes.  Great Western sued.

Minn. Stat. 366.012 states:

If a town is authorized to impose a service charge for a governmental service provided by the town, the town board may certify to the county auditor of the county in which the recipient of the services owns real property, on or before October 15 for each year, any unpaid service charges which shall then be collected together with property taxes levied against the property.

Minn. Stat. 462.353 provides:

A municipality may prescribe fees sufficient to defray the costs incurred by it in reviewing, investigating, and administering an application for an amendment to an official control established pursuant to sections 462.351 to 462.364[governing municipal planning and development] or an application for a permit or other approval required under an official control established pursuant to those sections. Except as provided in subdivision 4a,[1] fees as prescribed must be by ordinance. Fees must be fair, reasonable, and proportionate and have a nexus to the actual cost of the service for which the fee is imposed.

Noting that any prescribed fee “must be by ordinance,” the Court of Appeals reviewed the township’s zoning and fee ordinances and found no provision that permits the township to impose a fee on a property owner when a CUP application is denied and the CUP applicant fails to pay the costs incurred by the township in processing the application. The township relied on a section in the fee ordinance that requires that a $300 nonrefundable fee and a minimum $1,200 escrow payment be submitted with a CUP application, but the court found that this language does not authorize the township to impose a service charge on the owner of the property for which the CUP was sought.

The township was not authorized to impose a service charge against Great Western for the expenses incurred by the township in processing RTS’s conditional use permit application, and the ruling fell in favor of Great Western.

 

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