The Austin City Council is left with more questions than answers after voting Monday night to reassess 33 former Lansing Township properties whose owners have protested costs for a sewer project completed in 2011.

The vote follows Mower County District Judge Donald Rysavy’s ruling last month to set aside the $15,000 assessments on land owned by three property owners.

The council included in its decision the remaining 30 lots whose owners are also appealing their assessments.

“We intend to follow the ruling,” Mayor Tom Stiehm told more than 30 audience members at the City Council meeting Monday night.

The controversy started in 2006, when Austin and Lansing officials formed a committee to fix the township’s sewer issues, which included several properties piping sewage into the Cedar River. The committee eventually recommended Austin annex Lansing in order to connect homes to the city’s wastewater treatment plant.

Austin annexed 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 levied a $16,000-per-lot assessment fee for each parcel, which the city lowered to $15,000 after a subsequent reappraisal in 2012. Out of the remaining property owners, three successfully appealed their assessments last month when Rysavy ruled against the city, saying it was unreasonable to conclude the properties would benefit from the sewer project when those landowners showed their properties decreased in value.

Under state law, a city or municipality can’t assess a property for an infrastructure project by more than what the land would benefit.

 

Questions remain

Not everyone in attendance at Monday night’s meeting was pleased with the council’s decision, however. Phillip Eirikson is a property owner who supported the annexation, but he told the council he would sue the city of Austin if city officials reappraised the 33 lots at a lower cost than the land whose owners already agreed to a $15,000 assessment.

“It’s all or nothing,” Eirikson told the council. “You either reassess all of them or none of them. It’s either all or nothing, or I’ll be in here next week with a lawyer, and there will be a line of people behind me.”

City Administrator Jim Hurm said after the meeting city officials still weren’t sure what to do about the property owners who agreed to the assessments, and the decision to reassess the 33 lots was based on resolving legal conflicts.

“The key is those [properties] were in the lawsuit,” Hurm said. “If you take a look at what Rysavy said, he didn’t say everybody out there didn’t get their money’s worth, it was just [those three] properties. There are very different properties out there.”

The council’s decision is a day ahead of pretrial hearings in the larger appeal case, as the remaining owners will take their issues to court starting Tuesday afternoon. Several of those said they aren’t sure whether their case will be dropped as a result of the council’s vote.

City officials have yet to decide who will reappraise the 33 lots as part of the reassessment, or how best to reappraise those properties. Rysavy criticized the city in his ruling for failing to give enough information on the appraisal process, as well as using an inferior appraisal method that didn’t take into account local land values, in some cases assessing a property for more than it’s worth.

The city’s appraisal was “so unreliable as to provide virtually no indication as to the amount of the special benefit to the property,” Rysavy wrote.

It is also unclear how much money the city has spent defending itself in court, or what the reappraisal process will cost. City officials say they want to make sure property owners pay for the sewer project, instead of passing the bill onto Austin residents.

“We determined early that we are not going to bill the citizens of the rest of the city for this sewage system,” Stiehm said. “We’ve never done that, and we don’t want to do it.”

The next step for the city is to hire an appraiser, but the council gave no dates or deadlines to start the reappraisal process. Regardless, city officials are confident of one thing: This issue isn’t going away, and it’s going to cost the city more money.

“No matter what we do, we’re going to have somebody angry at us,” Stiehm told audience members during the meeting.