Phillip Gray, Linda Gray, Randall Ingram, Loren Meyer, Linda Meints-Meyer, Dennis Ripperger, Mary Ripperger, Lucille Mae Sindric, James Steffen, and Tracy Steffen v. City of Indianola, Iowa , 2011 Iowa Sup. LEXIS 30 ( 2011 )

IN THE SUPREME COURT OF IOWA
No. 09–1147
Filed May 6, 2011
PHILLIP GRAY, LINDA GRAY, RANDALL INGRAM,
LOREN MEYER, LINDA MEINTS-MEYER,
DENNIS RIPPERGER, MARY RIPPERGER,
LUCILLE MAE SINDRIC, JAMES STEFFEN,
and TRACY STEFFEN,
Appellees,
vs.
CITY OF INDIANOLA, IOWA,
Appellant.
Appeal from the Iowa District Court for Warren County, Peter A.
Keller, Judge.
City appeals from district court’s decision reducing special
assessments against property owners for a public improvement.
AFFIRMED IN PART, REVERSED IN PART, AND CASE REMANDED.
Ivan T. Webber and James R. Wainwright of Ahlers & Cooney, P.C.,
Des Moines, for appellant.
Joseph A. Happe and Jason T. Farley of Huber, Book, Cortese,
Happe & Lanz, P.L.C., West Des Moines, for appellees.
Terrence L. Timmins, Des Moines, and Amy S. Beattie of Brick
Gentry, P.C., West Des Moines, for amicus curiae Iowa League of Cities.
2
Amy S. Beattie of Brick Gentry, P.C., West Des Moines, for amicus
curiae American Council of Engineering Companies of Iowa and Iowa
Engineering Society.
3
HECHT, Justice.
Several property owners sued the city of Indianola challenging the
special assessments levied for paving a gravel road abutting their
property and installing a sidewalk. 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. We affirm
in part, reverse in part, and remand for further proceedings.
I. Factual and Procedural Background.
Plaintiffs own residential acreages along West Euclid Avenue on
the west edge of 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 owners of the
residential acreages had requested that the road be paved.
The paved road was thirty-one feet wide and eight inches thick.
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 the properties abutting West Euclid
and back to a depth of 300 feet. 1 The final assessments levied against
the plaintiffs were as follows:
Phillip and Linda Gray $20,855.45
Randall Ingram $11,697.64
Loren Meyer and Linda Meints-Meyer $16,694.32
Lucille Sindric $16,694.32
James and Tracy Steffen $16,694.32
Dennis and Mary Ripperger $20,036.51 2
1All of the plaintiffs’ properties were more than 300 feet deep.
2When the suit was first filed, the assessments were preliminary. However, the
proposed final assessments were used at trial and are the amounts included here.
4
Several owners of property within the assessment district sued the
city, 3 contending the assessment exceeded the special benefits they
received from the project. The various owners testified they did not
receive much, if any, benefit from the paving of the road. They asserted
they had purchased their property because they valued the rural
atmosphere of which the gravel road was a feature. They believed their
property values had decreased as a consequence of increased traffic
prompted by the pavement of the road and the location of the school in
the neighborhood. The owners opined access to their properties was not
improved by the paving of the road. They also testified 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, including
clearing snow in the winter. The owners further believe their exposure to
liability for personal injuries to pedestrians increased as a consequence
of the construction of the sidewalks which prompted an increase of
pedestrian traffic. At least one owner purchased additional insurance to
address his perception of this increased risk. Some owners conceded
their properties might have more curb appeal because of the paved
avenue, but none admitted any interest in selling their property.
The owners presented the expert testimony of Harold Smith, a
former city engineer of the city of Des Moines. Smith opined that the
method utilized by the city to spread part of the cost of the paving project
3Initially,
the suit involved several more plaintiffs, many of whom have since
dismissed their cases. The remaining ten plaintiffs own six residential properties
abutting West Euclid.
5
among the abutting landowners, commonly called the Flint formula, was
improper in this situation because the assessed properties are residential
acreages. He testified that the city’s use of the Flint formula, a purely
mathematical formula based on frontage feet and distance from the
improvements, resulted in excessive assessments. Smith criticized the
city’s application of the formula, asserting it failed to consider (1) the
unique features of each parcel of land and (2) whether special benefits
would actually be conferred to the properties burdened by the
assessments. 4 He proposed an alternate formulation of the assessments,
multiplying the number of frontage feet of each parcel abutting the
improvement by his calculation of the cost per foot of a twenty-five-foot
wide, seven-inch thick road. 5 He then considered fifteen “special benefit
factors” to determine whether the paved street conferred special benefits
upon the properties or general benefits to the city as a whole and
concluded the paved road conferred little, if any, benefit upon the
4The Flint formula, also known as the area assessment method, “focuse[s] on the
frontage size and depth of the abutting property, and assign[s] ‘benefit points’ for each
tract.” Milton O. & Phyllis A. Thorson Revocable Estate Trust v. City of West Des Moines,
531 N.W.2d 647, 650 (Iowa Ct. App. 1995). The formula’s application was summarized
this way in a prior case:
In computing the assessments the city engineer first determined
the benefited area, i.e., half way to the next block but not more than
three hundred feet. By mathematical computation, involving frontage
and depth factor, total cost, points of benefit and cost by point, the
assessment was determined. It was based on the premise “that any
square foot on the improvement pays the same assessment as any other
square foot the same depth on [or distance from] the improvement.”
Beh v. City of West Des Moines, 257 Iowa 211, 222, 131 N.W.2d 488, 495 (1965).
5Smith opined it was appropriate to assess only the costs of installing a road
twenty-five feet wide because that is the maximum width of a minor residential street.
He contended the additional width of the road installed by the city (thirty-one feet)
conferred only a general benefit to the public because it provided room for parking along
one side of the road. He further opined that while the city should not have assessed for
any portion of the cost of installing the sidewalk, in no case should more than fifty
percent of the cost of the sidewalk be assessed.
6
abutting landowners. 6 Finally, after considering the unique features of
each parcel, including whether it could be subdivided, his report
concluded
[w]ith all the property characteristics being nearly uniform,
the assumption is that residential home owners receive
Special Benefit and not land. Consequently, the 15 Special
Benefit factors outlined herein uniformly apply to these
owners. No property Owner receives any more or any less
Special Benefit. Consequently, the Ingram property
represented by parcel number 24 is the most common
property that receives no more or no less Special Benefit
than any other assessed property. Under the scenario of
these residential property owners being assessed for a
minimal residential paving slab only, and one-half the
sidewalk assessment, the combined maximum assessment
would be $8,453.78. No property on West Euclid Avenue
should have a maximum combined assessment for the
pavement and sidewalk that exceeds $8,453.78.
The city presented evidence that while the Flint formula was
utilized in part, the assessments in this case were not based entirely on a
mechanical application of the Flint formula without consideration of the
special benefits conferred upon the properties. Jeremy Enano, the
engineer who prepared the plat and assessment schedule for the city,
explained that, before the Flint formula was even applied to any of the
project costs, the city had deducted the cost of paving the intersections
and had only considered the cost of installing pavement seven inches
thick, rather than the eight inches that was actually installed. The city
had also not included the cost of installing sidewalks in the intersections
in the sidewalk assessment. The city manager, Timothy Zisoff, testified
the formula was adjusted for certain lots at the direction of the city
council. Enano and Zisoff explained the adjustments:
6The special benefit factors identified and assessed by Smith included noise
reduction, dust reduction, increased police and fire protection, better snow and ice
removal, improved access, improved drainage, ditch removal, improved safety, high life
expectancy of roadway, street lighting, lower maintenance costs, pedestrian access,
increased market value, beautification, and increased traffic capacity.
7
For lots that were relatively large or lots that could
potentially have a smaller lot subdivided out from it, we
analyzed that subdividable lot as a separate entity, and in
doing so we were able to determine what the assessment
would be for the smaller portion and the larger portion. And
at the direction of the City, we used the assessment from the
smaller portion and classified it as a deficiency and
specifically lowered the overall assessment to anybody that
could have a lot divided out by $6,250.
....
We were very conscious of the fact that there were
large lots on West Euclid, 200-, 300-foot wide lots, so we
developed a way and instructed the engineer to put a
valuation, because having done enough assessments, we
know the State allows a 25 percent assessment of up to the
property’s value. So we took the property – again, any lot
that could have been subdivided, even though there’s no
intent to subdivide, we still reduced the size in order to limit
the amount of the assessment.
Zisoff also testified that city council members inspected the
properties and met with the owners to evaluate the special benefits
received by the properties. He explained that the final assessments
represented the cost of installing a twenty-five-foot wide, seven-inch
thick road, even though the road was wider and thicker.
In addition, the city presented evidence explaining that the Flint
formula has for decades been the preferred and established method of
calculating special assessments in Iowa. Smith, the owners’ expert,
conceded that the Flint formula, in various forms, is the most common
method used by cities and engineers in the state, and he admitted it was
the method he utilized during his tenure as city engineer of Des Moines.
The city’s experts testified the Flint formula is commonly used by
municipalities to allocate assessments whether the property is residential
or commercial.
The city’s expert, Duane Wittstock, had been the city engineer for
the city of West Des Moines since 1988. He testified that the Flint
8
formula was applied appropriately in this case, citing the fact that the
properties are fairly uniform in shape as an important consideration. He
also identified a list of twenty special benefits the properties were likely
to receive. 7
The district court concluded that the assessments were excessive
and reduced them, relying on Smith’s testimony. The district court
determined the general benefit derived from paving the road was greater
than the special benefit accruing to the abutting property owners. The
court reasoned that because the lots at issue extend beyond 300 feet
from the road, the application of the Flint formula amounted to nothing
more than an inappropriate frontage-foot method, which has been
disapproved by our caselaw. Concluding the city did not take other
factors into consideration but rendered the assessments based solely on
the Flint method, the district court found the assessments excessive and
reduced them. The district court relied on Smith’s report and
determined that the assessments may not exceed $8,453.78 8 and
reduced the sidewalk assessments by half. The city appealed.
7Wittstock’s nonexhaustive special benefits list included reduction of fugitive
dust, lower vehicle maintenance, reduced roadway noise, improved sense of place for
the neighborhood, aesthetic enhancements, improved drainage, decreased potential for
trash accumulation due to elimination of ditches, decreased response time for
emergency services, improved street lighting, improved ability to maintain nonpaved
right of way, decreased chance of broken windshields due to rocks, enhanced access to
parcels, opportunity to develop property to highest and best use, improved ability to
keep home and vehicles clean, updating street to current design standards to enhance
safety, decreased environmental contamination of streams, potential for preservation of
property value, potential for increased property value, improved pedestrian access, and
improved recreational activities.
8Smith, in his report and testimony, proposed $8,453.78 as a final total
assessment—including both the assessments for the street and the sidewalk. However,
the district court concluded $8,453.78 was the maximum assessment for the street
improvement and additionally reduced the sidewalk assessment by fifty percent.
9
II. Scope and Standards of Review.
Our review is de novo. Horak Prairie Farm, L.P. v. City of Cedar
Rapids, 748 N.W.2d 504, 506 (Iowa 2008). We will give weight to, but we
are not bound by, the district court’s findings. Id. On appeal, as in the
district court, the burden is on the plaintiffs to show that the special
assessments were excessive. Mulford v. City of Iowa Falls, 221 N.W.2d
261, 268 (Iowa 1974). Once the city has “properly ordered a special
improvement . . . there is a presumption of necessity and a presumption,
too, that some benefit results to the assessed property owners.” Goodell
v. City of Clinton, 193 N.W.2d 91, 93 (Iowa 1971). Further, there is a
presumption that the assessments are correct and do not exceed the
special benefit received from the improvement. Id. It is appropriate to
consider “future uses and expectations as well as [the] present use to
which the property is put.” Id. “Unfortunately, mathematical and
analytical certainty is usually impossible in these cases, and thus, we
must rely on approximations to determine the correct amount of the
assessment.” Horak Prairie Farm, 748 N.W.2d at 508.
III. Discussion.
Iowa Code section 384.61 (2007) addresses the assessment of
costs incurred by municipalities in the development of public
improvements.
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.
Iowa Code § 384.61. A special assessment cannot exceed twenty-five
percent of the value of the property. Id. § 384.62(1). The statutory
scheme provides limitations to “ensure that individual property owners
10
are not subsidizing the general benefits enjoyed by the public resulting
from the improvements, particularly when street improvements are at
issue.” Horak Prairie Farm, 748 N.W.2d at 507. In this case, the
controversy centers on whether the property owners were assessed in
excess of the special benefits they receive from the improvement.
Specifically, the plaintiffs contend the city inappropriately relied on a
purely mathematical formula, the Flint formula, to spread the costs of
the street paving project among the abutting landowners resulting in
assessments which are higher than the special benefit conferred upon
their properties. The owners contend the city should have engaged in an
individualized assessment of each parcel to gauge the benefits conferred
upon the property.
The city does not dispute that it applied the Flint formula to spread
the cost of the assessment to the properties; however, it contends the
application of the formula was not inappropriate for two reasons. First,
the city argues the assessments did not exceed the special benefits
conferred upon the properties. Additionally, the city argues it did not
merely apply a mathematical formula to calculate the assessments but
instead used the formula as part of its individualized assessment of the
benefits conferred upon the properties. The city requests we make clear
that the use of the Flint formula is not proscribed by law, as the formula
is currently being used in the vast majority of jurisdictions in the state.
A. Special Benefits Conferred upon the Properties. Upon our
review of the record, we are not persuaded the plaintiffs have met their
burden of establishing their assessments exceed the special benefits
conferred on their properties as a consequence of the improvements on
and along West Euclid. We have no doubt the city’s primary purpose in
undertaking this improvement project was the achievement of a public
11
benefit after an elementary school was built in the neighborhood. West
Euclid was widened and paved to accommodate the traffic to the school
and connect other paved roads in the city to a relatively new housing
development situated to the north of the plaintiffs’ properties and
accessible only via West Euclid. The development of a paved surface on
the roadway conferred a broader public benefit as well because
commuters use the improved road to connect to highways leading to Des
Moines. The substantial benefits derived by the general public from the
West Euclid paving project do not render the special assessment
excessive, however, as the city did not assess the full cost of the project
against the properties within the assessment district. Instead, at several
points in the assessment process, the city reduced the assessment
against the private landowners to balance the general benefits conferred
upon the public with the special benefits conferred upon the abutting
properties.
Initially, the city determined not to assess the cost of paving
intersections against the abutting landowners. The city also decided to
only assess for the cost of a seven-inch thick pavement, even though the
road was eight inches thick. Of the cost remaining for the improvement
of the road, $660,448.81, the city assessed $360,448.81, 9 or
approximately fifty-five percent, against the abutting landowners.
Further, as we have already noted, when the Flint formula was utilized to
spread the fifty-five percent of the cost of the road among the properties
benefitted, the city directed the engineer to divide large lots and apply the
formula to those lots in a way that would adjust the assessment for
larger lots.
9The final amount assessed against the properties, according to the city
manager, was roughly the cost of building a road twenty-five feet wide. As we have
noted, the width of West Euclid is thirty-one feet.
12
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.
Chicago, R.I. & P. Ry. v. City of Centerville, 172 Iowa 444, 449, 153 N.W.
106, 108 (1915). One expects “property owners [to seek to] minimize the
taxes they must pay for an improvement they did not want.” Des Moines
Union Ry. v. City of Des Moines, 459 N.W.2d 271, 273 (Iowa 1990).
According to the plaintiffs, virtually nothing about the paved road
is better than the prior gravel road. One owner testified the pavement
was worth one hundred dollars to him. Some of the plaintiffs testified
the noise is louder and the dust is heavier than before the project was
undertaken. They contend they have received little benefit in the way of
improved access to their properties and that the road is not maintained
better than before. The plaintiffs note increased vehicular traffic, more
children and pedestrians, and the loss of the rural nature of their
property as consequences of the project. Some of the owners admit that
they will see slightly less wear on their cars because of the pavement and
that there might be some improved curb appeal to a prospective buyer.
Overall, however, they believe their property values have decreased since
the road was paved.
We find the special benefits conferred upon the properties at issue
in this case are numerous, despite the owners’ testimony that they have
actually been harmed by the paving of the road. Paving a gravel road
confers substantial benefits on an abutting landowner, benefits that are
13
“manifest to anyone having the slightest knowledge of the subject.”
Camp v. City of Davenport, 151 Iowa 33, 38, 130 N.W. 137, 139 (1911).
The parties’ experts identified many of them, 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. Our review of the owners’
testimony reveals that the heart of their complaint comes not from the
improvement of the road but from the location of the school nearby, the
increased traffic it has engendered, and the urban growth in the
neighborhood.
Determining how much an improvement specially benefits abutting
landowners rather than generally benefits others “cannot be done with
mathematical precision. Approximation is the best we can do.” City of
Clive v. Iowa Concrete Block & Material Co., 298 N.W.2d 585, 592 (Iowa
1980) (citation omitted). We conclude the owners failed in this case to
prove the assessments exceeded the special benefits conferred upon their
properties, and the presumption that the assessments are correct has
not been rebutted. Accordingly, we conclude the district court erred in
setting aside the city council’s assessments.
B. Use of the Flint Formula. The plaintiffs argue that while the
Flint method may be appropriate in some situations, it should not be
applied in the allocation of assessments to residential acreages. The
plaintiffs contend the formula should not be used because it does not
take into account variations in the assessed properties, such as
topography, woods, ditches, and suitability for subdivision. Our caselaw
has disapproved assessments calculated solely on area or frontage. See
14
Whart. v. City of Oskaloosa, 158 N.W.2d 834, 835 (Iowa 1968) (“The
area or frontage methods cannot be made the sole or conclusive basis of
determining the assessments without regard to all other factors . . . .”);
see also Des Moines Chrysler-Plymouth, Inc. v. City of Urbandale, 488
N.W.2d 711, 714 (Iowa Ct. App. 1992). The use of a mathematical
formula, however, as a tool in the principled allocation of assessments is
not proscribed. 10
Our cases have noted various factors relevant to the determination
of the appropriate amount of special assessments, 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. See
Thorson, 531 N.W.2d at 650. The enterprise of quantifying and allocating
special benefits conferred on affected properties is not an exact science.
[N]o plat and schedule of special assessments could, as a
matter of practical exercise of the function, be prepared
without the use of some more or less arbitrary rule for this
preliminary and tentative distribution of the cost of the
improvement upon the property liable to assessment.
In re Resurfacing Fourth St., 203 Iowa 298, 301, 211 N.W. 375, 377
(1926). We do not think the city’s use of the Flint formula in this case
was inconsistent with the applicable legal principles.
Furthermore, the challenged assessments were not based solely on
the Flint formula. The city’s council members viewed the properties at
issue and discussed the proposed assessments with people in the
10We note the plaintiffs’ own expert began his calculations with a purely
mathematical frontage foot formula.
15
neighborhood before the assessments were approved. At the direction of
the city council, assessments of larger properties suitable for subdivision
were adjusted in furtherance of the goal to quantify the special benefits
derived by the respective properties. Under the circumstances of this
case, we conclude the city’s use of the Flint formula in the allocation of
special assessments to benefitted properties was not improper. 11
C. Sidewalk Assessments. Although an Indianola city ordinance
requires property owners to install their own sidewalks, the city included
the sidewalk installation as part of the West Euclid paving project and
assessed the plaintiffs for the entire cost of the sidewalk fronting their
properties. The district court concluded that because the city decided to
install the sidewalks as part of the paving project and did not utilize a
city ordinance compelling property owners to install their own sidewalks,
the assessment for the sidewalk must not exceed the special benefits
conferred upon the property as required by Iowa Code section 384.61.
We agree that the special assessment levied against the properties for the
installation of the sidewalk must not exceed the special benefit conferred
upon the property. Brush v. Inc. Town of Liscomb, 202 Iowa 1155, 1158,
211 N.W. 856, 857 (1927) (holding special assessments levied for
installation of sidewalk must not exceed special benefit conferred as
required by statute even though city ordinance permitted assessment of
full cost of sidewalk).
The property owners contend they suffered harm but derived no
benefit from the installation of the sidewalk because they must now
maintain the sidewalk and they are required to remove snow and ice
11We are by no means implying that the Flint formula, or some version of it, is
the only appropriate method of spreading assessments to abutting landowners or that
the formula must be used by cities.
16
from the walkways in the winter. They contend these new unsolicited
responsibilities constitute a significant hardship, especially given the fact
they will rarely use the sidewalks. The property owners also assert they
now are burdened with unwelcome liability for injuries to pedestrians
using the walkways. One property owner testified that he purchased
additional insurance to cover this potential liability.
The record establishes the public benefit derived from the sidewalk
improvements within the assessment district is significant. The city
engineer testified the sidewalk was installed along West Euclid in
furtherance of student safety, and the owners testified that students
utilize the sidewalk to access the school. Sidewalks, particularly ones
that connect with other sidewalks in the city, are used by the general
walking public, just as streets are used by drivers. However, it is equally
evident that sidewalks confer special benefits upon adjacent properties.
Despite the protestations to the contrary, the plaintiffs in this case do
receive special benefits from the sidewalk which will reduce the incidence
of pedestrians walking through their property at other locations. Even
the plaintiffs’ expert conceded that an allocation of fifty percent of the
cost of the construction of the sidewalk to the plaintiffs was appropriate.
Like the district court, we find the assessment of the entire cost of the
sidewalk improvements against the plaintiffs’ properties cannot be
sustained on this record because such an assessment would exceed the
benefit conferred upon the adjacent properties. 12 We affirm that portion
12Our opinion in this case should not be understood as a determination that a
municipality can never assess the entire cost of sidewalks to abutting properties. We
simply find on this record that the amount of the special assessments allocated to the
plaintiffs’ properties for the installation of the sidewalk exceeded by fifty percent the
special benefit conferred upon them.
17
of the district court’s judgment reducing the sidewalk assessments by
fifty percent.
IV. Conclusion.
We conclude the assessments levied by the city of Indianola
against the plaintiffs for the road improvements did not exceed the
special benefits conferred upon the plaintiffs’ properties. We therefore
reverse that part of the district court’s judgment revising the
assessments for the road improvements. However, we affirm that part of
the district court’s judgment reducing the special assessments against
the plaintiffs’ properties for the sidewalk improvements because the
assessments failed to account for the significant public benefit
occasioned by the sidewalks. Accordingly, we affirm in part, reverse in
part, and remand for entry of a judgment consistent with this opinion.
AFFIRMED IN PART, REVERSED IN PART, AND CASE
REMANDED.
All justices concur except Appel, J., who takes no part.