This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2002).
STATE OF MINNESOTA
IN COURT OF APPEALS
William L. Roberts,
Judith A. Roberts,
City of Lake Crystal,
Filed November 4, 2003
Blue Earth County District Court
File No. C4-01-2565
William Roberts and Judith Roberts, 2201 East Tamarac Drive, Sioux Falls, SD 57103 (pro se appellants)
Michael H. Kennedy, Christopher M. Kennedy, Kennedy & Kennedy, 99 Navaho Avenue, Suite 104, P.O. Box 3223, Mankato, MN 56002 (for respondent)
Considered and decided by Halbrooks, Presiding Judge, Randall, Judge, and Hudson, Judge.
Appellants contend that the City of Lake Crystal abused its authority in setting a uniform amount of assessment per lot and that site grading was not authorized by Minn. Stat. § 429.021 (2002). Because appellants offered no evidence to counter the city’s expert witness who testified that there is a special benefit and that the benefit is greater than the assessment and because the site grading assessment is appropriate, we affirm.
Appellants William Roberts and Judith Roberts own property located in Blue Earth County. Appellants’ parcel has been improved by a single-family dwelling with a private well and septic system. A development group requested that respondent City of Lake Crystal annex an 80-acre parcel that they wished to develop, together with eight parcels that were already platted. The development group also requested that the city assess the properties for the development of infrastructure such as sewer service, water service, curbs, gutters, and bituminous streets. The described land included appellants’ property, one of the eight already-platted properties. After several hearings, at which appellants voiced objections, the city council passed an ordinance that annexed the property. The city subsequently adopted assessments against the annexed property in the amount of $17,300 per property. The owners of annexed property who signed an annexation petition with the developers were assessed only $13,000, with the balance being assessed to the developers. Appellants did not sign the petition.
Appellants appealed the assessment pursuant to Minn. Stat. § 429.081 (2002) and a trial was held. Appellants appeared pro se. They called no expert witnesses but cross-examined the city’s expert witnesses to clarify their valuation procedures and to attempt to discredit their methods. The city moved for a directed verdict at the close of appellants’ case, and the motion was taken under advisement. At the conclusion of trial, the court found that appellants had failed to meet their burden of proof in challenging the assessment and dismissed the appeal.
D E C I S I O N
Appellants contend that a uniform assessment per lot is improper, particularly in light of the fact that appellants’ property differs from other assessed properties because it is served by a well and septic system. Our scope of review on special assessments is a careful examination of the record to determine whether the evidence as a whole fairly supports the findings of the district court and whether the findings support the court’s conclusions of law and judgment. Carlson-Lang Realty Co. v. City of Windom, 307 Minn. 368, 373, 240 N.W.2d 517, 521 (1976). The cost of a municipal improvement “may be assessed upon property benefited by the improvement, based upon the benefits received.” Minn. Stat. § 429.051 (2002). Three things limit such an assessment: “(a) The land must receive a special benefit from the improvement being constructed, (b) the assessment must be uniform upon the same class of property, and (c) the assessment may not exceed the special benefit.” Carlson-Lang Realty, 307 Minn. at 369, 240 N.W.2d at 519 (citations omitted). An assessment cannot be arbitrary, but the special assessment need not correspond exactly to the benefit. Village of Edina v. Joseph, 264 Minn. 84, 98, 119 N.W.2d 809, 818 (1962); see also Continental Sales & Equip. Co. v. Town of Stuntz, 257 N.W.2d 546, 550 (Minn. 1977) (“each parcel does not have to be assessed exactly in the amount of benefit received”).
Because the assessment is presumed to be set in a lawful manner, introduction of the assessment roll serves as prima facie proof that the assessment does not exceed the special benefit. Buettner v. City of St. Cloud, 277 N.W.2d 199, 202 (Minn. 1979). But the presumption of validity may be overcome by adverse evidence of value. Id. at 204. The burden rests upon the property owner to show the invalidity of the assessment. Nyquist v. Town of Center, Crow Wing County, 312 Minn. 266, 268, 251 N.W.2d 695, 696 (1977). Testimony of a property owner and his or her expert is competent evidence to rebut the presumption of validity. Dosedel v. City of Ham Lake, 414 N.W.2d 751, 756 (Minn. App. 1987) (finding in favor of the property owner where the property owner introduced no expert testimony on value but testified on his own behalf as to value and discredited city’s case).
The value of the special benefits from an improvement should be calculated based on the market value of the land before and after the improvement. Anderson v. City of Bemidji, 295 N.W.2d 555, 560 (Minn. 1980). “[A]ny method resulting in a fair approximation of the increase in market value for each benefited parcel may be used.” DeSutter v. Township of Helena, 489 N.W.2d 236, 237 (Minn. App. 1992) (quotation omitted), review denied (Minn. Sept. 30, 1992).
Appellants called William Douglas, the city engineer, who testified as to preliminary cost-and-benefit estimates that the city considered in passing its ordinance. Douglas stated that he had advised the city that, in his opinion, each property would receive at least a $20,000 benefit from the project. Appellants also called Robert Hauge, the city administrator, who testified that the council considered both appellants’ objections to the project and an expert’s conclusions that the benefit would be greater than the assessment on the properties. He also testified that the city does not consider a parcel with a septic system and a well to have greater value than an unimproved parcel because, once annexed by the city, the owner is required to connect to city resources.
Appellants did not call an expert to rebut the presumption of validity given to the city’s assessment, nor did appellants testify that their property received no increase in value. See Buettner, 277 N.W.2d at 202, 204 (explaining that assessment is presumed lawful but may be rebutted by objector with adverse evidence of benefit value); Dosedel, 414 N.W.2d at 756 (observing that testimony of a property owner and his or her expert is competent evidence to rebut the presumption of validity). Therefore, as the trial court concluded, there is no evidence that appellants did not receive a benefit or that the assessment was greater than the benefit.
In contrast, the city called Owen Viker, an expert appraiser, who testified that, using the direct-sales-comparison approach, the street improvement and utilities added a value of at least $25,000 to appellants’ property, even when the current well and septic system were considered. Viker reached this conclusion by first examining dozens of comparable properties to find the most reliable and then using four comparable sales to estimate the property’s value before the city improvements and six comparable properties to estimate the property’s value after the improvements.
Because there is evidence of a benefit and the benefit to the property exceeds the amount of the assessment, we next consider the question of uniformity of assessment. Appellants argue that they received less benefit than other parcels because their property already had a well and septic system. Therefore, appellants claim that the court erred in finding that the city’s decisions were not arbitrary.
In Joseph, the court stated “[s]ome inequities must always exist in levying assessments and taxes.” 264 Minn. at 98, 119 N.W.2d at 818 (quotation omitted). In determining whether the assessment was uniform, a court considers that “once it has been found that the assessment does not exceed the benefits to the property, the apportionment of assessment among the various properties is a legislative function on the part of the council and will not be overturned except on a showing that it was clearly erroneous.” Anderson, 295 N.W.2d at 560-61.
In its examination of whether an assessment was uniform, the Anderson court considered whether assessing appellant on the longer side of its property “was disproportionate to the benefits received, as compared with other lots.” Id. at 561. The court determined that the city had carefully considered the method, had given valid reasons for its decision, and where reasonable minds could differ in determining whether the assessment was valid, it should be upheld. Id.
Here, the evidence established that appellant received a benefit greater than the assessment and each parcel was assessed the same amount. In making its policy decision on the approach to assessment, the city chose not to examine the value of existing septic systems or wells, but to focus, instead, on the value of a property. Underlying the city’s approach were the facts that the septic system would not conform to current codes and would have value only to the current owner and that landowners must connect to city water once annexed to the city. Because the city’s policy decision on how to apportion the assessments was not clearly erroneous and there were valid reasons for not considering the well and septic system, even if reasonable minds could disagree, deference is given to the policy decision.
The trial court found, in part, that the city followed the appropriate statutory procedures in adopting the assessments and that appellants had not met their burden of proof in challenging the assessment. As a result, the court dismissed the assessment challenge. The evidence supports the trial court’s findings of fact and the findings support the court’s conclusions of law.
The city’s assessment of $17,300 to appellants included the cost of site grading. All of the 43 new lots were graded but none of the previously developed eight lots were. Appellants argue that site grading is not authorized by Minn. Stat. § 429.021 (2002) and that it was a private improvement that does not benefit them. Although properly raised, the trial court did not resolve this issue. Minn. Stat. § 429.021, subd. 1(8), authorizes city improvements to fill or drain swamps, marshes, and ponds, and subdivision 1(1) permits improvements to roads. The statute also permits two or more improvements to be combined in one proceeding. Minn. Stat. § 429.021, subd. 2.
There is evidence in the record that the site grading done in this case fits within the statutory definitions. A preliminary engineering report prepared November 22, 1999 to address the proposed improvements described the site grading as necessary to fill a former Crystal Lake outlet channel to Minneopa Creek. The site grading would prevent problems with an existing dike and would facilitate the “construction of suitable building and roadway embankments.” In addition, a November 5, 2001 letter from the city engineer, in response to a letter from appellants questioning the assessment, described the site grading as necessary “to provide access for all property owners” and stated that the roadway “needed to be built to the lift station which also serves all property owners.” In his testimony, the consulting engineer explained that appellants would benefit from the site grading because it would allow for construction of a new road and access to the lift station or the municipal sewer. While it is not clear from this record that each assessed parcel received the same special benefit from each of the improvements, the city had the statutory authority to make the site-grading assessment, and property owners received a special benefit that was greater than the assessment.