Property owners fight Lansing sewer project in court

Published 9:59am Thursday, January 24, 2013

The property owners who objected to the Lansing sewer project are finally contesting in court sewer work assessment costs levied by the city of Austin.

The first day in a combined assessment hearing between three property owners and the city came to an inconclusive close Wednesday, as Mower County District Court Judge Donald Rysavy must decide whether the $15,000 per parcel assessments given to former state Sen. John Howe, Robert and Suzzane Allen, and MeShetnaglee and his mother, Kathy ScabbyRobeParnett, were fair.

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.

Erichson testified in court that since then, only about 30 parcels of land are appealing their assessments. Excluding the three owners at trial Wednesday, those property owners banded together to hire lawyer Robert Ward of Rochester for a case to come before Mower County court in March.

The current case could set the tone for future trials, as the property owners represented themselves and banded together under Howe’s argument that the city failed to show it met the “special benefits” clause under Minnesota statute, where residents can’t be assessed for the sewer work done in 2010 and 2011 that exceeds the property value increase that work benefited property owners.

“It’s always been about how legally the city can get this process funded,” Howe said in court.

Attorney Steven Hovey, representing the city, contested that residents clearly benefit from infrastructure projects and thus should pay the assessment costs.

“You increase value to the property, because you make it more desirable,” Hovey said.

Yet the property owners all contended their property values either didn’t change or went down since the sewer project finished in 2011.

“The total tax value that I’m paying is $30,000 for this year,” MeShetnaglee, who owns two parcels of land totaling 2.6 acres, said. “They want to charge me $30,000 in assessment fees.”

MeShetnaglee, accompanied by his father Minoc ScabbyRobeParnett, testified that the homes on his two parcels have gone down in value. His property was valued at $57,000 under 2012 property tax statements, excluding homesteads, but went down to $50,000 in 2013. Howe also testified his property values have gone down in recent years, and Robert Allen showed the court he tried to sell his parcel to Austin resident Corey Borg for $12,000 to $15,000, but Borg would not buy the property if the current assessment fees stand.

“Basically, the house is junk,” Borg told the court. “You’re paying for the land at this point.”

The owners also tried to convince Rysavy they were better off on their own private sewer lines. None of the property owners of the 30 contested parcels are currently connected to Austin’s sewer system, but Rysavy pointed out the sewer project was already finished and doesn’t impact the case.

“These residents have no choice with regard to the fact that they have city sewer,” Rysavy said. “They have no choice with regard to annexation. The only issue the court is concerned about is whether or not this particular assessment is fair and reasonable.”

While the property owners rested their case Wednesday afternoon, the city will finish its argument Thursday, and Rysavy has yet to schedule a hearing for the court’s decision.

Helen Gardner, another property owner in the former Lansing area who watched the proceedings, said she thought the trial would bode well for her and the other owners’ case in March.

“It’s a real mess,” she said.

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