The Iowa Court of Appeals heard a case on a city’s special assessment of certain property owners for the costs of road and storm sewer improvements made in the city’s industrial-business district.
The City specially assessed the property owners abutting the roadway at a rate of $55 per linear foot of property running along the improved roadway. Some property owners (the Plaintiffs) challenged this in district court. The district court found the property owners had been assessed in excess of the special benefits received from the project and reduced the assessments. The City appealed.
Judge Christopher McDonald of the Iowa Court of Appeals wrote that the court must consider “whether the assessment ‘represents a fair proportional part of the total cost,” quoting and Iowa Supreme Court decision. The judge commented that, according to the evidence, the project was ill-conceived from the start: with the industrial district on the outskirts of town, the City didn’t go ahead with the project in response to any professional study, such as a water-drainage study or traffic study. Instead, they initiated the project because of a deteriorating roadway. In fact, a construction company abutting the roadway added a curb and gutter to the street immediately in front of its business.
The project generated very little, if any, benefit for assessed property owners, and property owners testified to that effect. The testimony even showed water drainage issues increased after the completion of the improvement.
The property owners’ testimony was supported by their expert witness, a former city engineer of the City of Des Moines. The engineering expert testified regularly in these types of proceedings, and here he said that the owners received only a de minimis benefit from the project. He opined that the project didn’t reduce noise or roadway dust, and didn’t improve emergency services access. Further, the project didn’t improve snow or ice removal; didn’t improve water drainage or street parking; and didn’t reduce ditch maintenance. While the project widened the roadway, it was excessive and not useful: the City failed to widen the road enough to add additional traffic lanes.
With the lack of benefits from the project, the city engineering expert concluded that the project was best classified as a curb and gutter installation. He testified that the Flint formula was commonly used to determine the special benefits associated with a project of this kind. The expert testified, without objection, the appropriate formula in this case as follows: “One-and-a-half feet of curb and gutter times the lineal feet of a frontage for the property…which gives you square feet, divided by nine, gives you square yards, times $44.50 a square yard.”
The expert, without objection, described the formula as “[th]e area, the frontage times one-and-a-half foot of curb and gutter times the $44.50 a yard.” While he testified about the formula, the expert didn’t provide any testimony on the specific dollar amounts derived from applying the formula to the various properties in this case. The data on the amount of linear feet of frontage for each assessed property was admitted into evidence without objection.
The city argued that the district court shouldn’t have considered the expert’s formula because it wasn’t disclosed prior to trial. But the city didn’t object to the expert’s testimony regarding the formula. As a result, the error was not preserved.
In contrast to the expert’s formula used to calculate the special benefit and appropriate assessment, Judge McDonald found that the City’s assessment bore no relationship to the special benefit conferred by the project. The judge went on to say that the City “backed into” an assessment determination not based on special benefit to the property owners but rather based on how much of the cost the city wanted to pass along to the property owners. Thus, the primary driver of the assessment was the city’s budget, the judge held—not the property owners’ benefit.
Judge McDonald wrote that given the two valuation models presented to the district court, on de novo review, the appellate court couldn’t conclude the district court erred in crediting the expert’s testimony and assessment formula. The district court applied the formula to the evidence and determined the special benefit conferred by the project. It then determined the city’s special assessment exceeded each of the property owners’ respective special benefit received. The district court reduced the special assessment appropriately, McDonald said.
Still, the district court’s calculation of the special benefit was controversial, the appellate judge said. The property owners attached a table to their post-trial brief showing the application of the expert’s formula to the facts of this case and the resulting values. The district court’s assessment findings corresponded to the values of the property owners.
The City claimed that the district court’s consideration of the post-trial exhibit constituted reversible error because the record was closed. Under the facts and circumstances of this case, The Court of Appeals disagreed.
The expert testified regarding his formula to calculate the special benefit and assessment, and the City didn’t object to the testimony. Plus, the data regarding the linear feet of frontage for each assessed property was in evidence without objection. The property owners’ exhibit was merely a table that summarized the evidence and performed the arithmetic for the court. Judge McDonald said it would’ve been no different if the property owners had inserted the table into the brief and not labeled the table an exhibit. By the same token, McDonald said the district court could have performed the same task based on the evidence.
The Court found that the property owners successfully demonstrated the special assessments exceeded the resulting special benefits, requiring a reduction of the special assessments. The judgment was affirmed.
Rauen & Rauen Dev. v. City of Farley, 2018 Iowa App. LEXIS 1037 (Iowa App. November 21, 2018)