Governor Reynolds COVID-19 Declaration: temporary suspension of penalty and interest on late or delayed property tax payments, etc.

By: Erin Mullenix

On March 20th, Governor Kim Reynolds issued an additional COVID-19-related declaration which addressed several local government and taxpayer concerns, including temporarily suspending penalty and interest on late or delayed property tax payments.  It also temporarily suspended some evictions under the Iowa UniformResidential Landlord and Tenant Act or the Manufactured Home Communities or Mobile Home Parks Residential Landlord and Tenant Act in certain circumstances.

This declaration also specifically provides guidance for public meetings or hearings by electronic means to improve the functions of government while maintaining social distancing practices.  It also addresses guidance for filling local vacancies within a certain period of time.

The full text of the Governor’s Declaration is available: https://governor.iowa.gov/press-release/gov-reynolds-signs-additional-state-public-health-emergency-declaration-will-hold.

Utility Billing for Local Government During COVID-19

By: Sara Shonrock

As social distancing becomes a normal way of life, local governments are struggling with the immediate shutdown of all “non-essential” services and the likely economic impact resulting from job losses of residents. 

As a city government, there are still essential services that are needed during this time including electric, gas, and sewer and water.  These services, especially water and sewer, are most often provided by the municipal government and in the face of an unsure landscape for citizens, many cities are shifting the way they do business to meet the needs of their residents.

Unpaid utility bills are usually charged a late fee, and in most cities, subject to a shutoff notice.  For many cities, this is the only way to continue to provide these services on a tight budget.  COVID-19 has changed the way that we view such services and the way that we can deliver them as well.  

On March 13, 2020 the Iowa Utilities Board issued an emergency order directing all electric and natural gas utilities in the state to cease disconnection of residential service due to nonpayment.  The IUB on March 19, 2020 urged all utilities to refrain from utility service shutoffs, especially water service, during the coronavirus outbreak and supports the IDHR to extend the LIHEAP application period to May 31. While electric and gas are often required to stay on during the winter months, the order extends the moratorium on shut-offs to May 1, 2020.  The emergency order gives information as to gas and electric specifically but does state that water should also not be shut off during this time.

Many city utility services are funded strictly by payments for use from residents.  The guidelines for shutoffs often come after one month of missed payment to try and prevent a large bill that will likely not be paid. Cities often charge a late fee a few days after the bill due date goes unpaid.  Often after a two-week period, cities will then choose to put a door hanger alerting the resident that they are going to be shut off.  

Cities that choose to keep water on during this time have a few options.  

  • The first is to continue to charge late fees.  In this way, they may still collect additional monies while trying to assist residents with staying connected in an unsure time.  
  • The city can choose to try and work with residents and landlords.  Landlords whose renters are not paying their utility bills may begin to receive the bills for the rental property.   
  • The city can choose to continue to use the door hanger method and decide whether or not to charge late fees.  

While many cities may choose to not disconnect utilities during this time, there will still be options for recourse after the fact with the continuation of late fees.  Cities will continue to have recourse to property liens for unpaid fees and bills when recovery does occur. 

Suspension of Bank Foreclosures during the COVID-19 Public Health Emergency

By: Jon Wolseth

The economic and social uncertainty caused by the COVID-19 pandemic exacerbates the situation of homeowners already finding themselves in straitened financial circumstances.  For those households in the midst of foreclosure proceedings, the fear of losing one’s home during the public health crisis compounds an already difficult situation.  Recent steps have been taken at the state and federal levels to provide homeowners in the midst of foreclosure with some relief.  

Bank foreclosure proceedings are being suspended in Iowa, an action taken in a recent (March 22, 2020) State Public Health Emergency Declaration from Governor Reynolds.  Section 2 of the declaration reads: 

SUSPENSION OF FORECLOSURES

SECTION TWO.  Pursuant to Iowa Code §§ 29C.6(6) and 135.144(3), and in conjunction with the Iowa Department of Public Health, I temporarily suspend the regulatory provisions of Iowa Code chapters 646, 654, 655A, and 656 allowing for the commencement of foreclosure proceedings, or the prosecution of ongoing foreclosure proceedings, on residential, commercial, and agricultural real property located in the state of Iowa. Suspension of these provisions shall apply during the duration of this Proclamation or any future extension of this suspension.

A.   Nothing in this section shall be construed as relieving any individual of their obligation to make mortgage payments, or to comply with any other obligation that an individual may have under a mortgage.

B. The Iowa Division of Banking and the Iowa Division of Credit Unions are hereby directed to immediately engage with banks, credit unions, mortgage bankers, and mortgage services to identify any tools, means, or methods that could be used to relieve Iowans from the threat of foreclosure.

In particular, this action provides relief for homeowners who may have been at risk of foreclosure in the midst of the public health emergency.  Affected homeowners are encouraged to proactively reach out to their mortgage lenders to pause proceedings.  

At the federal level, the U.S. Department of Housing and Urban Development announced a 60-day moratorium on foreclosures and evictions for FHA-insured single family homeowners. The moratorium began March 18, 2020. Read the full text of the press release

U.S. Government-sponsored mortgage enterprises Fannie Mae and Freddie Mac have also released plans of assistance for their lendees whose ability to make mortgage payments is impacted by the COVID-19.

COVID-19 Business Resources

We just wanted to share this resource list posted by the Buchanan County Economic Development Commission. This is a great example of what a local community can do to streamline access to resources available to businesses. Check their page out for more information we have also reposted their links below for ease of access. Let us know in the comments if you have any additional resources to share.

Business and Industry Resources and Information Relevant to COVID-19

The COVID-19 (Corona Virus) has drastically impacted our personal lives as well as businesses and industries throughout Buchanan County, the state, the nation and the world.  We at Buchanan County Economic Development want to provide you relevant links to assist businesses and industries with the most relevant information available.  Below you will find links that we hope can answer your questions and help to guide you through this unprecedented time.

Links to relevant sites and articles:

Links to Iowa Department of Health and COVID-19 update sites

Information and Legislation From Gov. Reynolds Concerning COVID-19

City Budget Resources

By: Erin Mullenix

In uncertain economic times, city budgets are undoubtedly a challenge. These times of pandemic and economic decline can add inherent volatility and uncertainty to the local budget.  

Fortunately, the State of Iowa’s Department of Management has granted extensions to city budget filing deadlines for all cities.  City budgets are now due April 30, 2020, unless the city has received individual correspondence with a later date specified.  Each city should have been emailed by the Iowa Department of Management with additional details.  If no such email was received, contact the Iowa Department of Management. Click here to view the memo from the Iowa Department of Management. 

In addition to the change in budget deadline, cities should keep in mind the new budget requirements enacted last year during the 2018-2019 legislative session.  Those changes include the addition of a second public hearing process related to new public reporting requirements.  Visit the Iowa Department of Management, or Iowa League of Cities websites for more information.

Remember that Iowa State University Extension’s Office of Community and Economic Development has a number of helpful budget resources available to you.  Visit the Iowa Government Finance Initiative (IGFI) and Indicators Portal websites for a host of local government resources, including custom Annual Fiscal Conditions reports for each city and county. 

Options for Internet Access in Rental Housing

By: Abigail Gaffey

Many parents are suddenly finding themselves responsible for their children’s education at home. For most of us this is an inconvenience, but for low-resource populations it can be an impossibility. Rental property managers, particularly of apartment complexes housing families, can help by checking on the internet needs of their tenants.

Large apartment complexes, both market rate and government-assisted units, often have publicly-available wi-fi in a shared community room, but the need for social distancing may make using it an unsanitary prospect whether through congregating in one spot or touching a shared computer. A better temporary solution may be to share the internet password for the next couple of months. Another possibility would be to purchase a mobile hot spot for each floor of the building.

Some will argue that not everyone will use the wi-fi responsibly and certainly that is true, but in the interim the need for students to continue their educations, the surge in tele-health appointments that will keep people out of doctor’s offices and non-emergency hospital visits, the need for people to file for Unemployment benefits online, and shifting as many people as possible to paying bills online rather than in-person may outweigh the possibility that someone might watch a few too many YouTube videos.

If providing wi-fi is completely beyond the landlord’s budget, at a minimum landlords can let their tenants know about low-cost internet services. Several Iowa telecom companies are offering reduced-price internet start-up packages to new customers. In central Iowa, Mediacom offers the Connect2Compete package that offers high-speed internet packages for as low as $10 per month: https://mediacomcable.com/about/news/mediacom-brings-internet-access-to-low-income-students/ The same Connect2Compete program is also available to Iowans served by Cox Cable: https://newsroom.cox.com/cox_internet_changes_to_assist_students_-_remote_workers Iowans with Sparklight (formerly CableOne) are being directed to Spectrum Charter which is making 60 days of internet service free to households with student. However, it isn’t available in all zip codes in Iowa, so potential customers will need to check on available for their location: https://home.sparklight.com/news/read/category/news/article/variety-charter_offers_free_broadband_to_all_households_wi-rpenskemc

In the coming days, we may see even more companies and rural telecom providers coming up with solutions that help not just students, but also folks now working from home. An example of an innovative solution is Northeast Nebraska Telephone Company. NNTC has set up a free pandemic wi-fi. Customers can drive up to within 100 feet of one of 22 locations to connect. A mobile hotspot extender can also be used to pick up the signal farther away: https://nntc.net/nntc-response-to-covid-19-coronavirus/

One last idea property managers can explore with their tenants is working with the local school district if a tenant family is struggling with internet connectivity for their young students. These interactions may also help a property manager identify a family in crisis needing other social supports at this tenuous time.

Changes to the BLUZ Blog

We are adjusting our services here in CED to continue to provide education and support while maintaining social distancing for the health and safety of our staff, participants, volunteers, and communities.

We are going to use this blog to post information and resources for our Iowa communities including businesses, local governments, and other community groups.

The Housing Assistance Council has compiled a list of Resources Related to Coronavirus and Rural Housing:

http://www.ruralhome.org/whats-new/mn-whats-new/45-announcements/1801-statement-and-resources-on-coronavirus#housing

A few resources for Small Businesses:

The Small Business Administration is offering loans to small businesses and nonprofits who have been impacted by COVID-19.  Businesses and nonprofits can receive up to $2 million in a low-interest loan.  For more information visit https://www.sba.gov/disaster-assistance/coronavirus-covid-19

Upon request from the Governor, the Small Business Administration will under its own authority issue an Economic Injury Disaster Loan Declaration. The Restaurant Workers Relief Foundation has created as COVID19 relief fund for workers impacted by COVID19 information can be found here: https://www.restaurantworkerscf.org/news/2020/3/15/resources-for-restaurants-and-workers-coping-with-the-covid-19-emergency

The ONE fair wage has created a restaurant worker and tip worker fund as well and information on that can be found here: https://ofwemergencyfund.org/

Information and eligibility requirements for a Bartender Emergency Program can be found here:https://www.usbgfoundation.org/beap?fbclid=IwAR3p9y-eXg1bhTGGL-snMh4XS6S4ydHxbu-mSTjYNMtDGrTiXsEvXIhT7KY


The National Restaurant Association has also compiled a list of resources and that can be found here:https://restaurant.org/Covid19

Local Officials Permissive Interpretation of Zoning Ordinance is Acceptable

by: Sarah L.C. Runkel

Gustavson v Board of Adjustment of Buena Vista County and Snyder
(Iowa Court of Appeals, September 12, 2018)

In 2016 Mark Snyder purchased a plot of land with an existing cabin. The same year, he demolished the existing cabin under permit, and applied for a zoning permit to construct a new cabin on that same property. Although the property was too small for a residential use under the code, the zoning administrator accepted that the lot was legally nonconforming, and was accepted by the zoning administrator.

Soon after Snyder was issued a compliance permit, his neighbors, Steve and Janelle Gustavson, filed a notice of appeal to the Board, claiming that no structure could be built on nonconforming lots. Upon appeal, the Zoning Board of Adjustment unanimously voted to uphold the zoning administrator’s issuance of the permit.

The Gustavsons filed a petition for writ of certiorari in district court, claiming that the Board acted illegally and arbitrarily. The district court dismissed the petition, upholding the Board’s decision, which the Gustavons appealed.

Nonconforming Use

Nonconforming use, buildings or lots are those which were legally established, but do not fit with the current zoning ordinance, typically due to subsequent changes in zoning. These legal nonconforming uses are allowed to continue. However, alterations to nonconforming property is often prohibited, unless, “the changes are not substantial and do not impact adversely on the neighborhood.” Stan Moore Motors, Inc. v. Polk County Board of Adjustment, 209 N.W.2d 50 (Iowa 1973).

This determination is the responsibility of the city or county staff. Aiding in such decisions, it has been determined that, “A zoning ordinance should not be extended by implication to prevent a use not clearly prohibited.” Arkae Dev., Inc. v. Zoning Bd. of Adjustment, 337 N.W .2d 884, 886 (Iowa Ct. App. 1983).

The ordinance in question states:

Nonconforming Lots: In any district in which single-family dwellings are permitted, notwithstanding limitations imposed by other provisions of this Ordinance, a single-family dwelling and customary accessory buildings may be erected on any single lot of record at the effective date of adoption or amendment of this Ordinance. This provision shall apply even though such lot fails to meet the requirements involving area or width, or both, of the lot; [ …] shall conform to the regulations for the district in which such lot is located.

Buena Vista Cty.Code of Ordinances §6.1.9.105(2) (2003)

Ordinance Language

Language utilized to establish ordinances may impact community members beyond anticipated intent. Since Buena Vista County’s Code of Ordinances specifically states that lot size and shape shall not prohibit construction of a single-family dwelling where they are permitted, denial of said structure would fall under prevention of a use not clearly prohibited. It could be understood that if a dwelling existed and is destroyed then reconstruction is prohibited. It could also be understood that one could replace a pre-existing dwelling. In this case the permissive interpretation of the zoning administrator and the zoning board of adjustment is acceptable.

The Iowa Court of Appeals found no error with the district court’s dismissal of the petition for writ of certiorari. The cabin can stay.

Subdivision is a local, often subjective, decision

by: Sarah L.C. Runkel

Bussanmas v. Des Moines
(Iowa Court of Appeals, July 18, 2018)

In 2015, Nicholas Bussanmas purchased a 2.34 acre lot zoned in a residential district in Des Moines, IA with the intention of subdividing the land for development. In April 2016, the City Plan and Zoning Commission recommended denying the proposal of the three-lot plat based largely on objections from neighbors that the lot served as a natural watershed. The Des Moines City Council denied the subdivision request in June finding principally that subdivision of the land may have negative effects on stormwater flow in the neighborhood.

Bussanmas appealed the decision to district court and then to the Iowa Court of Appeals. The Iowa Court of Appeals confirmed the decision of the district court, agreeing that the Des Moines City Council presented reasonable evidence that the property should not be subdivided according to Iowa Code Section 354.8 and Des Moines Municipal Code’s subdivision regulations.

The Court of Appeals concluded that:

“The Council clearly considered all of the relevant evidence and balanced that evidence as required by section 354.8(1), including the interests of Bussanmas, the neighbors, and the City, and it determined Bussanmas’s preliminary plat must be rejected. We agree with the district court that there is sufficient evidence to support the Council’s decision to reject the preliminary plat.”

According to Iowa Code Section 354.8, governing bodies shall review proposed subdivisions based on reasonable standards and applicable ordinances. Approval of a proposed subdivision is contingent upon the proposal’s conformity to the comprehensive plan, a balance between the proprietor, future use, and the public interest.

Subdivision is a process delegated to local governments. The decision for approval or denial should be based on reasonable evidence and evaluated by the standards in the comprehensive plan and local ordinances. This leaves the scope of influencing factors open to the reasonable interpretation of the local elected body.

Statute of limitations does not bar enforcement of a court decree

By Eric Christianson

TSB Holdings, LLC v. City of Iowa City
(Iowa Supreme Court, June 1, 2018)

In the 1980s Wayne Kempf and his partners purchased six parcels on the north side of Iowa City. Their plan was to build an office building and five apartment buildings on the four-acre tract. After the completion of the office building, they began construction of an apartment building. Following neighborhood protests, the city revoked the building permit and then downzoned the area to single family residential. This lead to a number court fights culminating with a 1987 order by the Iowa Supreme Court, which read in part:

Kempf shall be permitted to proceed with the development of apartment buildings, as shown by the record in this case, to the extent that such buildings conform to the ordinances in effect prior to the 1978 rezoning… The [C]ity shall be enjoined from prohibiting this use of the property by Kempf. Further development or redevelopment of the property beyond that contemplated by Kempf as shown by this record and noted in this opinion, whether carried out by Kempf or future owners, will be subject to the amended ordinances above designated.

Kempf completed one apartment building but did not develop the other properties. Over time Kempf and his partners sold the properties to various other parties. Eventually TSB Holdings purchased all of the properties subject to that order. In January of 2013 TSB Holdings submitted a site plan to the City of Iowa City showing the development of new apartment buildings based on the 1987 court order. The City denied this plan, stating that it did not comply with current zoning.

On April 18, TSB submitted a new site plan, which proposed construction of apartment buildings on only the three lots which had not been developed subsequent to the 1987 Kempf order. The city also denied this plan, viewing it as materially identical to the January 31 site plan. The Iowa City Board of Adjustment also failed to issue a variance to KSB.

TSB claimed that this was a violation of the 1987 court order and appealed the city’s decisions. A district court found in the City’s favor, concluding in part that TSB was not a successor to Kempf and that the order was no longer applicable. TSP appealed to the Iowa Supreme Court.

Among other issues the court examined three questions that were determinative of the case.

  1. Is TSB Holdings a successor of Kempf?
  2. Is the original 1987 court order unenforceable because of the stature of limitations?
  3. Has a use already been established on the properties?

Is TSB Holdings a successor of Kempf?

The district court had found that TSB was not a successor because TSB did not buy the lots directly from Kempf and the lots were sold piecemeal and not as a single package.  The Supreme Court found that in this case those points were irrelevant. The decision ran with the parcels regardless of ownership changes in the meantime.

Statue of limitations/repose

Among the most significant elements of this ruling is the question of whether court orders such as the one issued in Kempf are subject to a time limit. In a recent decision, Dakota, Minnesota & Eastern Railroad v. Iowa District Court, the Iowa Supreme Court interpreted Iowa Code 614.1(6) to say that that court orders are subject to a 20 year statute of repose. Therefore, an action to enforce a judgment more than 20 years after it was entered was untimely.

In this case, TSB argued that 614.1(6) was a statute of limitations rather than a statute of repose. A statute of limitations limits how long after an event causing some harm, the “cause of action,” one can bring a suit. A statute of repose on the other hand would prevent the bringing of a suit if that harm, occurs after a defined time period. The difference is somewhat technical, but here is determinative of the outcome. Does Iowa law say (1) that the court order itself expires after a 20-year period, or (2) does a plaintiff have 20 years to file suit after that court order is violated? Did the clock start ticking in 1987 when this order was issued or in 2013 when Iowa City rejected TSB’s site plan?

The Iowa Supreme Court overruled its own interpretation from Dakota and held that the limitations period in  614.1(6) runs from the date when the “cause of action” occurs. Court orders do not themselves “expire” after 20 years. In this case the “cause of action” occurred in 2013, when the City enforced its current zoning ordinance despite the 1987 court order. Therefore, the case is timely.

Has a use been established?

Another question relevant to this decision concerns which of the lots had been developed and are now subject to the current ordinance. The evidence showed that Lots 10, 49, and 51, had no buildings on them at the time TSB submitted this site plan. Iowa City argued that because of electrical easements and other work that had occurred on at least some of those parcels, they have already been “developed” and the order is moot. They further argued that developing Lots 10, 49, and 51 would require work to be done on the other lots which were clearly already developed and are now subject to current law.

The court was unconvinced that anything less than the construction of a building would be considered development on the affected lots. Further the court ruled that any development that would have to take place on the lots which already have buildings on them would be unaffected by the order. That potential development is therefore outside the scope of this ruling.

 

The Supreme Court overruled the district court’ rulings and held:

  1. KSB is a successor to Kempf and benefits from the order.
  2. The statute of limitations does not prevent the enforcement of the 1987 Kempf decision.
  3. A use had not been established on all of the parcels subject to the decree.

While this decision does clarify some matters of law, the future of this development is not yet settled.

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