City did not err in using Flint formula as foundation for special assessment

by Gary Taylor

Phillip Gray, et al. v. City of Indianola
(Iowa Supreme Court, May 6, 2011)

Plaintiffs own residential acreages along West Euclid Avenue in the city of Indianola. West Euclid was a gravel road until the school board decided to build an elementary school along the avenue and the city council decided to pave it. The paving project included expanding and paving the avenue, reconfiguring ditches, and installing sidewalks on both sides. The city council’s decision to pave was based on the location of the school, and none of the plaintiffs had requested that the road be paved.

The city levied a total of $360,448.81 in special assessments for the pavement of the road and $41,080.32 for the installation of the sidewalk. The assessment district included all the properties abutting West Euclid and back to a depth of 300 feet. Plaintiffs’ individual assessments ranged from $11,697 to nearly $21,000.

Iowa Code 384.61 provides that “the total cost of a public improvement, except for paving that portion of a street lying between railroad tracks and one foot outside the tracks, or which is to be otherwise paid, must be assessed against all lots in the assessment district in accordance with the special benefits conferred upon the property, and not in excess of such benefits.” [emphasis added].

Plaintiffs sued the city of Indianola, contending the assessment was excessive and that they received little, if any, special benefit from paving the road. They cited factors such as the rural atmosphere of the neighborhood of which the gravel road was a feature, increased traffic prompted by the pavement of the road, and the location of the school in the neighborhood. They opined that the expected benefits of paving a gravel road, such as reduced noise and dust, were offset by the detriment resulting from the increased traffic due to the school. The owners also testified they did not believe the sidewalk benefitted their properties at all but actually constituted a detriment because they would now be required to maintain the sidewalks, and would be exposed to potential liability from for personal injuries to pedestrians.

The owners presented the expert testimony of a former city engineer that the method utilized by the city to spread the cost of the paving project – known as the “Flint formula” which is a purely mathematical formula based on frontage feet and distance from the improvements – resulted in excessive assessments because it failed to take into account unique features of each parcel, and whether special benefits were actually conferred by the project. 

The city presented evidence that the assessments were not based entirely on the Flint formula.  The city engineer testified to deductions made for the road and sidewalk sections at intersections, the width of the street (assessments were made based on a hypothetical 25’ street instead of the actual 31’ width) and the overall thickness of the pavement, and the city manager explained deductions made at the direction of the city council including reductions to the assessment of larger lots.

The district court found the assessments to be in excess of special benefits conferred, ordered all road assessments to be reduced to an amount not exceeding $8,453.78, and ordered all sidewalk assessments to be reduced by half.  The city appealed to the Iowa Supreme Court. 

The Supreme Court observed that:

Few property owners are happy about sharing through special assessments the cost of public improvements, particularly ones that they did not ask for. It is natural for the average property owner to resent the burden thus laid upon him, and he easily persuades himself that the thing for which he is asked to pay is a detriment, rather than a benefit, to his land, and ordinarily it is not difficult for him to find plenty of sympathizing neighbors who will unite in supporting his contention.

The court determined that the city’s use of the Flint formula for assessing roadway improvements was not inappropriate because “at several points in the assessment process the city reduced the assessment …to balance the general benefits conferred upon the public with the special benefits conferred upon the abutting properties.”  The court noted that the city council’s adjustments were consistent with previous caselaw citing several factors relevant to determining special benefits, including “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 further found the benefits to having a gravel road paved were numerous, “including fugitive dust control, reduced roadway noise, lower vehicle maintenance costs, aesthetic enhancements, improved drainage, decreased potential for trash accumulation due to the elimination of ditches, increased safety, easier maintenance of the property abutting the road, and decreased response time for emergency services…” and that many of plaintiffs’ complaints were in fact a result of locating the school nearby and not paving the road.  Conceding that determining special benefits “cannot be done with mathematical precision” the court concluded that the plaintiffs failed to overcome the presumption that the assessments were correct. 

The court affirmed the district court’s reduction of the sidewalk assessment, finding that the record established that the public benefit derived from the sidewalk improvements – including student and general pedestrian safety – was significant.

Property tax equalization provision does not apply to agricultural property

by Gary Taylor

Naumann v. Iowa Property Assessment Appeal Board
(Iowa Supreme Court, December 3, 2010)

James Naumann owns approximately nine hundred acres of agricultural property spanning the Adair-Madison County line. After receiving 2007 property assessments from both counties, Naumann filed a petition to the Adair County Board of Review for each of his thirteen parcels of land located in Adair County, asserting his property was assessed for more than was authorized by law. The board of review denied each of his petitions, concluding Naumann had not provided sufficient evidence to prove the assessment was excessive.  Naumann appealed to the Iowa Property Assessment Appeal Board (IPAAB), contending his Adair County property was assessed at a value more than five percent higher than his adjacent Madison County property in violation of Iowa Code 441.21(1)(d). After an evidentiary hearing, the IPAAB concluded the Adair County Assessor properly assessed the value of Naumann‘s land and the assessments were neither excessive nor done in error. Naumann then petitioned for judicial review of the IPAAB‘s decision, but the district court affirmed the IPAAB‘s decision.  Naumann then brought the case to the Iowa Supreme Court.

The case centered on a dispute over the interpretation of subsections of Iowa Code 441.21(1) (follow this link and enter “441.21′).  Naumann asserted that because the plain language of section 441.21(1)(d) applies a five percent variance limitation to property without excluding agricultural property, the valuation of his agricultural property in Adair County must be adjusted so it does not exceed by more than five percent the valuation of his adjacent property in Madison County. (Neuman claimed the variance between the Adair and Madison County valuations was thirty-six percent.).  The IPAAB contended that the five percent variance limitation in paragraph (d) is inapplicable to agricultural land valuations. The IPAAB pointed to paragraph (g) providing agricultural property shall be valued exclusively as provided in paragraph (e) on the basis of productivity and net-earning capacity.

In reviewing the statute and applying customary rules of statutory construction, the Iowa Supreme Court concluded that section 441.21(1)(d) does not apply to agricultural property. While the actual value of other property classifications is generally its fair and reasonable market value, agricultural land is valued differently. Under Iowa Code 441.21(1)(e) the actual value of agricultural land is determined on the basis of productivity and net earning capacity capitalized at seven percent and applied uniformly among counties and classes of property. Paragraph (g) provides that paragraph (e) is the exclusive method of valuation for agricultural property.

The Supreme Court determined that the harm intended to be addressed by section 441.21(1)(d) is the potential that two similar non-agricultural properties lying on different sides of a jurisdictional boundary will be valued substantially differently, and that this is likely to happen when the properties are being valued based on fair and reasonable market value. Methods for determining fair and reasonable market value, such as market comparables, necessarily involve some degree of subjectivity. In contrast, the objective criteria for assessing the value of agricultural property mandated by section 441.21(1)(e) and implemented through the Iowa Administrative Code leave no room for subjective assessment of a property‘s value. Instead, the actual value of agricultural property is determined by using an average of five years of actual county productivity data for various crops to determine an aggregate land value for each assessing jurisdiction. Iowa Admin. Code r. 701—71.12(1)(a). This aggregate land value is spread among individual parcels in a jurisdiction utilizing corn suitability ratings (CSRs) derived from the modern soil survey, as required by section 441.21(1)(f). The use of this formula which takes into account the property‘s specific CSR removes the need for subjective determinations by the assessor, and thus the purpose of paragraph (d) is not served by applying it to agricultural land.  The Supreme Court affirmed the district court’s ruling.

Iowa DOT cannot claim discretionary immunity from flood damages resulting from Highway 63 bridge

by Gary Taylor

Schneider, et. al. v. State of Iowa
(Iowa Supreme Court, September 3, 2010)

In the late 1980s, the Iowa Department of Transportation (DOT) developed a plan to relocate a portion of Highway 63 to bypass the city of Denver, Iowa. The plan called for the construction of a four-lane divided highway along the west side of the city and a bridge spanning Quarter Section Run Creek, a stream flowing through Denver. The original construction of the bypass commenced in 1993 and concluded in 1994.
In a flood insurance study commissioned by the city in 1990, the creek was designated as a “regulatory floodway.” A floodway “‘is the channel of a stream plus any adjacent flood plain areas that must be kept free of encroachment so that [a] 100-year flood can be carried without substantial increases in flood heights.’” The bridge and related structures were designed to accommodate a 50-year flood event.  A higher, 100-year flood standard was typically used by the DOT when sizing bridges in flood insurance study areas and in other locations where the risk of high damage would be created for upstream businesses and homes. The State’s expert conceded the higher standard would have been utilized in the design of the bridge had it been designed for construction in a floodway, but noted the State did not learn the site had been designated as a floodway until after the bridge was built.

In May 1999, Denver experienced an extraordinary rain event and resulting flood which damaged thirty-five homes and thirty-four businesses. The intensity of the rain produced a volume of rainwater in the floodway consistent with the magnitude of a 250-year flood.  A flood study undertaken by the United States Department of Agriculture Natural Resources Conservation Service concluded the embankment constructed for the bypass “cut off a large portion of the floodway,” causing water moving through it to “back up” during the 1999 event. Computer models prepared for the study illustrated that the bypass structures increased the depth of the 1999 flood waters by as much as three feet in certain areas of the city and caused flooding in a part of the city that would not have flooded but for the construction of the bypass. The models also produced evidence tending to prove the bridge and related structures would have caused flood waters in a 100-year flood event to rise higher in some parts of Denver upstream from the bridge than would have been the case had the bridge and related structures not been placed in the floodway. Following a lengthy period of study and investigation of a range of options, the State chose to redesign and extend the bridge. The reconstruction of the bridge and the reconfiguration of the floodway in 2004 and 2005 modified the elevation of the floodway along the creek and substantially enhanced the capacity of the floodway to convey water away from the city.  The reconstruction brought the bridge and related structures into substantial compliance with the 100-year flood standard.

Claims addressing the 1993 bridge.  Owners of several properties damaged in the 1999 flood filed suit alleging the State negligently designed and constructed the first bridge. The landowners alleged the State breached a common-law duty by designing and constructing the bridge in a manner that obstructed the floodway and increased the depth of floodwater during the 1999 event. The landowners further alleged the State breached a duty derived from Iowa Code section 314.7 proscribing disruption of the natural drainage of surface water when improving or maintaining a highway. The State’s answer asserted immunity from liability under Iowa Code section 669.14 because the design and construction of the project were discretionary functions and because the project conformed with a generally recognized engineering or safety standard, criteria, or design theory prevailing at the time of its design and construction or reconstruction. The district court found in favor of the DOT, and the Court of Appeals affirmed based on the immunity provisions in 669.14(1). The Iowa Supreme Court granted further review to determine whether the State’s immunity for discretionary functions was applicable under the circumstances presented in this case.

After addressing several procedural matters, the Iowa Supreme Court focused on the issue of discretionary function immunity.  The Court disagreed with the conclusions of the lower courts.  “Given the clear statutory and regulatory prohibitions against the creation of floodway encroachments causing increased risk of loss to upstream properties in the event of a 100-year flood, we conclude the discretionary function defense has no application in this case. The State’s employees could not choose to ignore these prohibitions, and they therefore did not have available to them a choice to design and build encroaching, noncompliant structures in the floodway. As there was no such choice available, the employees of the State who designed and built the bridge did not perform discretionary functions for which section 669.14(1) would offer immunity.”  Because a fact issue remains on the question of whether the original design and construction of the bridge as a floodway encroachment violated prevailing engineering standards in existence at the time of the original design and construction of the project, and/or violated the DOT’s responsibility to keep from diverting natural drainage waters onto adjoining landowners, this portion of the case was remanded. 

Claims addressing the reconstructed bridge.  The landowners claimed permanent devaluation of their properties by the reconstruction of the bridge and rechanneling of the floodway, saying that the reconstructed bridge still encroaches upon the floodway.  However, the Court concluded that the record demonstrates the reconstruction design satisfied the 100-year design standard and achieved the approval of the DNR. The plaintiffs failed to produce evidence tending to prove the reconstructed bridge does not comply with the 100-year standard, the generally accepted engineering standard in existence at the time of the reconstruction.  Therefore, the DOT was entitled to immunity under Iowa Code 669.14(8) which grants immunity if construction was “in accordance with a generally recognized engineering or safety standard, criteria, or design theory in existence at the time of the construction or reconstruction.”

“Nearest feasible route” requires reasonable consideration of costs to both landowners

by Gary Taylor

Green v. Wilderness Ridge, L.L.C.
(Iowa Supreme Court, January 8, 2010)

The Iowa Supreme vacated an earlier Court of Appeals decision concerning the ability of the owner of a landlocked parcel to access that parcel over the land of another, using the “nearest feasible route to an existing public road.”  Readers can go to The BLUZ blog post on the Court of Appeals decision, which can be accessed here, for a review of the facts.   

Iowa Code 6A.4(2) gives the owner of a landlocked parcel the right to exercise eminent domain over the land of a neighbor if it is necessary to gain access to a public road.  The code provision lays out criteria for exercising that right that include locating the access “along a line which is the nearest feasible route to an existing public road”  In this suit, the owners of the servient estate (the land across which the easement would cross) argued that the route suggested by Wilderness Ridge (owner of the landlocked parcel) (1) did not lead to a public road, and (2) did not consider the costs to the servient estate for allowing that route.  The Court of Appeals determined that the route selected by Wilderness Ridge did lead to a public road and would pose fewer costs to Wilderness Ridge than the route offered by the owners of the servient estate, and for that reason allowed condemnation of the route preferred by Wilderness Ridge. 

The Iowa Supreme Court disagreed with the Court of Appeals’s finding that Dudley land was a public road for purposes of Iowa Code 6A.4.  While the road could theoretically be located by it’s designation on old plats, Dudley Lane has never physically existed.  The purpose of the statute is to provide access to landlocked parcels, and providing access to a public road that exists on paper only does not meet legislative intent. 

The Supreme Court also found that the term “nearest feasible route” required a consideration of reasonableness, focusing on the impacts on both parties.  Thus it was incumbent on the courts to consider the value of the land to be condemned in determining the specific route for providing access.

Considering these findings the Supreme Court remanded the case to district court for further fact finding related to the location of the nearest public road and the costs of acquiring a route thereto.

Iowa Supreme Ct. examines scope of access easement

by Allison Arends

Stew-Mc Development v. Fischer
(Iowa Supreme Court, August 14, 2009).

Proposed use of farm access lane for access to residential subdivision would exceed original scope of easement.

In 1888, Anton Birkel purchased land in Dubuque County, which was eventually passed down to Ferdinand Birkel. During Ferdinand’s ownership, his mother, Rosa, lived on a separate farm on the northern part of his property. Ferdinand allowed Rosa and other relatives to travel across his land in order to access public roads and other parts of the property. After Rosa sold her property and it was divided into two lots, Ferdinand continued to allow the new owners of Rosa’s property to travel across his land. This “access way” was later named Kress Lane. In 1983, Ferdinand Birkel’s land was sold to Nancy and Thomas Fischer, who continued to allow the owners of the northern properties to use Kress Lane for access purposes. Prior to this case, the owners of the two northern lots were James Kress and Joseph and Penni Schmitt. Although Kress Lane is vital to the survival of these farms, Dubuque County never formally accepted it as a public road, although over the years the county has rocked and graded it, and given it a name for 911 emergency addressing purposes.  The Birkel-Fischer chain of ownership has never established a written legal instrument granting a formal easement across the Fischer party for Kress Lane.

In February 2002, Stew-Mc Development, Inc. made an offer to purchase the two-hundred acre Kress estate in hopes that the Dubuque County Board of Supervisors would approve an application to rezone the property to permit single-family residential development. At the Dubuque County Planning Zoning Commission where Kress’ application was considered, Nancy Fischer objected, stating that Kress Lane was only an access easement over her property, and the northern landowners had no real ownership. As a result, the application was denied on the grounds that the Kress property had insufficient public access.

Kress and Stew-Mc filed for a declaratory judgment claiming that Kress Lane was a county road, thereby providing sufficient public access necessary for residential development. The district court granted summary judgment in favor of the Fischers. The court determined that Kress lane was a private road based on “an easement and was not a public roadway, either by direct acquisition, formal dedication and acceptance, implied dedication or prescriptive easement.” The court also determined that despite the “scope” of the easement, it was not “broad enough to cover the proposed residential development. “

The court applied law of easements in which they found they must look at the original scope and use of the easement, which was granted to the two farm properties at a time when residential development was not contemplated. The court also decided that if the scope of the easement was not defined, the easement is limited to what is “reasonably necessary and convenient for the purposes for which it was created.” The court also noted that the development of the residential area would not only increase the use of the easement, but it would change the nature of the easement constituting an extra burden upon the dominant estate.

Claim allowed against city for negligent reconnection of severed sewer line in 1978.

by Gary Taylor



(Iowa Supreme Court, June 12, 2009)


Statute of repose did not bar church’s claim against city for negligent severing, then reconnection of sewer line during 1978 water main installation project.


The City’s liability turned on the interpretation of whether the water main installation project was an “improvement to real property” under Iowa Code 614.1(11). This provision is a statute of repose that bars a claimant from bringing “an action arising out of the unsafe or defective condition of an improvement to real property . . . more than fifteen years after the date on which occurred the act . . . [that] cause[d] . . . the injury. . . .”  Thus, regardless of when an injury occurs, this statute of repose terminates any right of action fifteen years after the date of the improvement.  If the statute applies, St. Paul’s claim would be barred since the reconnection of St. Paul’s sewer line occurred twenty-seven years before sewage backed up into the church and this action was commenced.  The City argued that work on St. Paul’s sewer line should be considered part of the water main improvement project because cutting St. Paul’s sewer line would have not been done but for the water main installation project. St. Paul’s, on the other hand, argued that the reconnection of its sewer line was not an improvement, but rather a repair resulting from the water main project that improved neither the function nor the value of the sewer line.


The district court found in favor of the city, reasoning that the retrofit of the Church’s sewer line was a collateral step in and a consequence of the new water main’s installation.  Further, and because of the faulty retrofit, the water main improvement project was defective at that time and at that location.  It was because of that defect

that the Church eventually incurred its damages.


The Supreme Court reversed.  Relying on the testimony of a building official and inspector employed by Webster City for over forty-one years who is also a licensed plumber, the Court determined that it would have been possible to complete the water main project without touching St. Paul’s sewer line and therefore the negligent reconnection of St. Paul’s sewer line was not part of the project to improve the City’s water main. It further found that the reconnection of the sewer line (and not the water main project) also was not an “improvement to real property” as set forth in case law.  While it was “a permanent addition to or betterment of real property that involved the expenditure of labor or money,’ it did not “enhance the property’s capital value,” nor was it “designed to make the property more useful or valuable.” Rather than an improvement to real property, the reconnection of the sewer line was more appropriately characterized as an ordinary repair.  Therefore, the statute of repose did not bar St. Paul’s claim.



In 1978, during Webster City’s water main installation project, a city contractor severed and then negligently reconnected St. Paul’s Evangelical Lutheran Church’s gravity flow sewer line. Twenty-seven years later, in 2005, sewage backed up into the church resulting in $30,000 in damages. St. Paul’s brought a suit against the City to recover damages.


Iowa S.C. on moratoria, vested rights and bad faith

posted by Gary Taylor

GEISLER V. CITY OF CEDAR FALLS (link to case here)
769 NW2d 162 (Iowa Supreme Court, July 10, 2009)

In this case, the Iowa Supreme Court validates use of moratoria as planning tool and expounds on Iowa’s vested rights doctrine, but remands to district court the landowner’s claim of bad faith actions by the city.

In 2004, Michael Geisler purchased land located in an Overlay District of Cedar Falls, Iowa to develop an eight-unit apartment complex. In May 2005, he submitted a site plan to the Cedar Falls planning and zoning commission. Apparently at the time an amendment to the Overlay District that would have prohibited the project was “under discussion.” At the commission’s May 18, 2005, meeting, the Cedar Falls city planner stated that the site plan met all the basic ordinance requirements; however, because there was substantial resident opposition to the proposed development voiced at the meeting, the commission voted to recommend denial of Geisler’s site plan.

At the Cedar Falls city council meeting held May 23, 2005, the council considered Geisler’s site plan. Several citizens residing in the Overlay District expressed concerns about the plan, including the increase in traffic it would generate and the detrimental effect to single-family homes in the area. The council denied the site plan because it was “inconsistent with the character of the neighborhood due to architectural design … [and was] not of comparable scale and character in relation to adjoining properties.” At the same meeting, a motion also passed to discuss a temporary moratorium to study the issue of multi-family unit construction in the Overlay District. At the next city council meeting on June 13, 2005 the council passed a resolution imposing a moratorium on all development or construction of multi-family housing in the Overlay District. On that same day Geisler submitted a revised site plan that could not be processed in time to be discussed at the meeting. On June 22, 2005 Geisler filed a petition for writ of certiorari in the district court alleging the city acted illegally by denying his site plan and subsequently passing the moratorium. On July 11, 2005 a city official refused to process the revised site plan in light of the moratorium, effectively denying the project. On December 12, 2005 the city council passed an amendment to the Overlay District that prohibited multi-family housing. Geisler did not resubmit the site plan after the enactment of the ordinance.

Moratoria. The city first asserted that the district court did not have jurisdiction to hear the case because a writ of certiorari can only be used to challenge judicial and quasi-judicial actions, and the council’s adoption of the moratorium was a legislative function. The Iowa Supreme Court agreed, stating that in enacting the moratorium, “the city was performing a traditional legislative function.” In doing so, the court gave implicit approval to the use of moratoria by Iowa cities, an issue not previously addressed by the court. It observed that “a moratorium aids a governing body in performing the legislative task of municipal planning….They aid in bridging the gap between planning and its implementation into legal measures. They may be used to preserve the status quo while study of the area and its needs is completed [thus serving] a significant public purpose.”

Vested rights. The discussions of vested rights and bad faith came about in the court’s attempt to address a matter of procedure known as the “pending ordinance rule.” Under this rule, a court is supposed to decide a case “based on the zoning law as it exists at the time of the court’s decision.” The pending ordinance rule thus requires the court to apply the zoning ordinance as amended on December 12, 2005, since both courts’ (district and supreme court) decisions were made subsequent to the city council’s adoption of those amendments.

According to the court, the theory of vested rights acts as one exception to the pending ordinance rule. In a 1998 case, Quality Refrigerated Services v. Spencer, the Iowa Supreme Court determined that a developer acquires a vested right to proceed under the old ordinance if (1) s/he makes substantial expenditures toward the development prior to the zoning change, and (2) those expenditures were made lawfully. In the present case, the court essentially states that only expenditures made pursuant to a validly-issued building permit can be considered “lawful.” Since no building permit had been issued at the point when Cedar Falls rezoned Geisler’s property, he had not acquired a vested right to proceed.

The second exception to the pending ordinance rule is if the local government acted in bad faith. To establish bad faith in the context of a zoning decision, Geisler would need to show that Cedar Falls (1) illegally denied the application, and (2) did so with an improper purpose. The Supreme Court laid out markers for determining both illegality and improper purpose. Citing the 1999 Iowa Supreme Court case U.S. Cellular v. Board of Adjustment, the Court observed that the denial, without any legal justification, of an application that clearly meets all the requirements of the then-existing ordinance is illegal. Then, after providing examples from the Second and Sixth Federal Circuits, and state cases from New Jersey and Wisconsin, the Court “discerned that an improper purpose exists when a zoning authority adopts a new zoning regulation designed to frustrate a particular applicants plans for development.” It went even further in a footnote, saying that “unlike the [examples cited in these other cases] where bad faith was found when the governing body sought to change the rules in response to a particular request, the result may be different where a zoning change is already being contemplated before the particular request is made.” The Court found that the district court failed to consider the issue of bad faith and remanded the case back to the district court to determine whether the city acted illegally and with an improper purpose.





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