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Interchange Partners, L.L.C. v. City of West Des Moines

Court of Appeals of Iowa

April 18, 2018

INTERCHANGE PARTNERS, L.L.C., Plaintiff-Appellee,
v.
CITY OF WEST DES MOINES, IOWA, Defendant-Appellant.

          Appeal from the Iowa District Court for Dallas County, Paul R. Huscher, Judge.

         The City of West Des Moines appeals the district court's ruling invalidating the ordinances imposing a connection fee levied by the City.

          Ivan T. Webber, James R. Wainwright, and Maria E. Brownell of Ahlers & Cooney, P.C., Des Moines, for appellant.

          George A. LaMarca and Ryan C. Nixon of LaMarca Law Group, P.C., Des Moines, for appellee.

          Charles F. Becker and Espnola F. Cartmill of Belin McCormick, P.C., Des Moines, for amicus curiae, Home Builders Association of Greater Des Moines.

          Considered by Vogel, P.J., and Potterfield and Mullins, JJ.

          VOGEL, PRESIDING JUDGE.

         At the heart of this litigation is whether a city can finance the construction of roadway culverts by establishing a district under Iowa Code section 384.38(3)(a) (2015), then collect fees from certain properties within the district. The City of West Des Moines (the City), enacted ordinances to allow for this form of financing. Interchange Partners, L.L.C. (Interchange) brought suit to contest the City's action. The district court ruled in Interchange's favor, concluding (1) the property does not have the required connection to a city utility, (2) the placement of culverts under the City's streets does not constitute a city sewer, and (3) the connection fee is not equitably apportioned among all persons in the district benefiting from the culverts.

         The City appeals the district court's decision. As an initial matter, the City claims the district court, and this court on appeal, lack subject matter jurisdiction because certiorari is the exclusive means to challenge the City's ordinance and Interchange's failure to petition for a writ of certiorari within thirty days of the enactment of Ordinance No. 2117 is fatal. The City also claims the district court erred in finding Ordinance Nos. 2024 and 2117 were illegal because the City validly created a city sewer utility, properties within the district have the proper connection to this utility, and the calculation and apportionment of the fee is equitable.[1]Concluding we do have jurisdiction to hear the appeal and the district court did not err in interpreting Iowa Code section 384.38(3)(a), we affirm the district court's ruling.

         I. Background Facts and Proceedings

         On October 14, 2013, the City approved and passed Ordinance No. 2006 "to establish the method and requirements for the establishment of individual stormwater connection fee districts to fund the design and construction of certain stormwater drainage facilities on major streets." The stated intent of the ordinance includes "to set forth the method of recovery of proportional cost shares from those property owners who develop property within the" district.

         Pursuant to Iowa Code section 384.38(3)(a), and after notice and public hearing regarding Ordinance No. 2024, the City established the Sugar Creek Stormwater Connection Fee District on April 11, 2014. The ordinance requires payment of the connection fee pursuant to the following:

1. For property being platted the fee is due and payable before approval of the final plat.
2. For property subject to a site plan the fee is due and payable before approval of the site plan.
3. For all other property the fee is due and payable before issuance of a building permit.

         No fees were assessed to properties already developed or land considered to be undevelopable. Possibly due to only a portion of its property being located within the district, Interchange was not provided notice of Ordinance No. 2024. On October 5, 2015, the City enacted Ordinance No. 2117, which properly notified Interchange and confirmed its property is included in the district and, thus, subject to the connection fee.

         The City intended to use connection fees from the district to fund the construction of seventeen structures-mostly roadway culverts-along natural drainage channels. The City acknowledged the new structures will not increase or decrease the runoff capacity from Interchange's properties, and the new structures will not improve the storm water flow capacity of the existing creek network.

         On October 23, 2015, Interchange challenged the enactment of Ordinance No. 2117 "by and through Ordinance No. 2024" by filing a petition with the district court pursuant to Iowa Code section 384.66(1) asserting its "connection fee district" was wholly illegal, null, and void under Iowa Code section 384.38(3)(a).[2]Specifically, Interchange asserted the improvements, to be financed by the fees, are not city sewer or water utilities, Ordinance No. 2117 does not service its property because there is no utility to which its property could physically connect, and the assessment of the fees is inequitable across the newly created district.

         The case proceeded to a bench trial before the district court where the court ruled in favor of Interchange. The district court held the City's Ordinances Nos. 2024 and 2117 are not compliant with the Iowa Code because the property does not have the required connection to a city utility, the placement of culverts under the City's streets does not constitute a city sewer, and there is no equitable ...


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