Daily Development for Monday, May 10

By: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
prandolph@cctr.umkc.edu

TAXATION; SPECIAL ASSESSMENTS; CONNECTION FEES;:

A municipality may not impose a connection fee in an attempt to recoup a portion of a special assessment that has been judicially disallowed; such a fee constitutes an unconstitutional taking of private property.

Johnson v. City of Eagan, 584 N.W.2d 770 (Minn. 1998).

After the cost of constructing a water main was assessed in part to a homeowner's property based on a percentage of the total cost of the project, the homeowner challenged the assessment. The court reduced the assessment to the amount of benefit conferred upon the property by the assessed improvement even though the reduced assessment did not cover the full cost of the improvement.

Four years later, when the homeowner decided to connect to city water, the city charged the homeowner a standard connection charge, to which the homeowner did not object, and a lateral benefit water fee, which the homeowner challenged and paid under protest. The city imposed a lateral benefit water fee only on those properties that had paid a special assessment equal to the benefit conferred but less than the cost of the improvement.

The Minnesota Supreme Court, reversing the trial court, held that the city discriminatorily imposed the lateral benefit water fee on the homeowner's property in order to subvert the previous court order reducing the amount of the earlier assessment. Because an assessment by a municipality in excess of the benefit conferred on the assessed property is an unconstitutional taking, the homeowner was entitled to a refund of the fee.

Comment 1: It is of course common in most cases for a court in assessment cases to conclude that the benefit conferred by a public improvement on property adjacent to the improvement is equal to that property's pro rata cost. The cost is commonly measured, as the city attempted to do here, by a linear footage basis. We are not told the reason that the original court found that this was an inappropriate basis for assessment in this case. Perhaps the landowner's property was not as deep as other properties bordering the water line. Perhaps the water line was oversized. But once the court made that determination, it is clear here that it will not permit recovery of the lost assessment through a back door.

Comment 2: The case is useful not only for the specific holding, but also for the general jurisprudential notion that attempts to subvert the limitations of the assessment process will be met with judicial suspicion.

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