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.
