City: Sewer assessments were fairPublished 4:44pm Saturday, January 26, 2013
The city of Austin made its case against property owners objecting to sewer work assessments on their property in the former Lansing area Thursday, saying the assessments were fair based on the appraisal methods used and the improvements done to fix non-compliant sewer systems.
Rick Siefkes, an appraiser based out of Mankato, Minn., testified the three property owners’ assessments were fair based on a cost to cure method used to determine how much the Lansing sewer project done in 2011 would improve the property’s land value.
Siefkes, who was hired by the city to appraise the properties of owners who objected to the assessment in 2012, also said appraisers didn’t take into consideration houses or other buildings on the property but focused on the land itself.
“It is our position that it’s just the land that has that increase in value, not the structure itself,” Siefkes said.
According to Siefkes and Public Works Director Jon Erichson, the sewer system work done to 209 lots in what used to be part of Lansing Township benefits the land as opposed to buildings on said property, as future buyers will have access to sewer utilities when deciding what to put there, thus raising the land’s value.
“It doesn’t matter, the house itself in this particular case with sanitary sewer,” Siefkes said. “The lot is going to be able to support a variety of different structures, They are all going to receive that same benefit of having a connection to a city sanitary sewer system.”
Property owners contended the appraisals were faulty, as the cost to cure method, usually used in home appraisals to show restoration or upgrade costs, showed a $15,000 benefit to land parcels worth the same or less value. Former Republican State Sen. John Howe, of Red Wing, attacked Siefkes’ credibility and assessment process. Siefkes couldn’t find comparable land sales in the Austin area to make his assessment, though it was possible he could have used area listings or other methods to see what the land is valued at. In addition, Siefkes was told by city officials to consider each land parcel’s sewer system under appraisal as non-compliant, though property owners contend their septic systems work fine and are compliant.
Local excavator Harlan Peck testified private sewer systems in compliance usually use a mound system, which not every property owner who objected to assessments had.
In addition, Siefkes testified the size of the land wasn’t taken into account using the cost to cure method in the assessment calculations.
Howe contested Siefkes’s appraisal was faulty because land parcel size wasn’t taken into account. Howe said land parcel sizes dictated what future buyers could do with the land, therefore making an across-the-board approach in appraising land value unsuitable in this case as the city of Austin’s sewer system may not benefit each project equally.
“The size of the lot dictates what you can do with it,” Howe said.
Siefkes defended the cost to cure process, however.
“Without comparable land sales, it is a commonly used approach,” he said.
The city and the three property owner groups — Howe, Robert and Suzzane Allen, and MeShetnaglee and his mother Kathy ScabbyRobeParnett — must submit closing arguments in writing to Mower County Court Judge Donald Rysavy, who will take them under advisement on Feb. 7.
This isn’t the last time the Lansing sewer project assessments will be contested in court, however. More than 30 property owners with 27 parcels of land have objected to the $15,000 assessment fee to sewer work done in 2011, and they have banded together by hiring Rochester Lawyer Robert Ward, who will take their case to court in March.
The controversy started in 2006, when Austin and Lansing officials helped form a committee reviewing solutions to sewer issues, including several properties piping sewage into the Cedar River. The committee eventually recommended the city of Austin annex Lansing Township in order to connect homes there to the city’s wastewater treatment plant. Austin officials held informational meetings with representatives from the Southeast Minnesota Wastewater Initiative and all of the affected property owners, with a majority of owners signaling support for the annexation.
Though the township board voted 5-0 against the annexation, Austin annexed about 209.5 parcels of land in 2009, with the remainder of Lansing set for potential annexation in 2014.
The owners of about 60 parcels voiced their concerns about the annexation in 2010, after the city appraised all the properties and levied a $16,000 per parcel assessment fee for each parcel under the annexation, according to Public Works Director Jon Erichson. The city re-appraised each property, eventually lowering assessment fees to $15,000 per parcel after appraisals found each property would benefit by that much, Erichson said in court.