Council declines to speak about closed meeting on Lansing sewer issue

More than 20 residents who own former Lansing Township property came to the Austin City Council meeting Monday night to chide the city of Austin over its $15,000 flat assessment to each lot in 2011, just weeks before the start of several assessment appeals.

The show of support comes after three property owners successfully appealed the assessments to their properties, as Mower County District Judge Donald Rysavy ruled the city’s assessments unconstitutional earlier this month. Rysavy will also hear the upcoming assessment appeal.

Council members discussed the outcome of that case in a closed meeting before their public meeting took place Monday. Though residents hoped the council would address the situation, council members did not publicly discuss the closed meeting.

“We’re not going to talk about the assessment tonight,” Mayor Tom Stiehm told the audience at the beginning of the meeting. “There’s nothing on the agenda regarding the sewer appraisals.”

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.

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 levied a $16,000 per lot assessment fee for each parcel, which the city lowered to $15,000 after a subsequent reappraisal in 2011.

Rysavy wrote it was unreasonable to conclude each of the properties would benefit from the sewer project by more than half of its value when former state Sen. John Howe, R-Red Wing, Robert and Suzzane Allen, and MeShetnaglee and his mother, Kathy ScabbyRobeParnett, showed their lots had decreased in value since the Lansing sewer system project was completed in 2011.

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

Rysavy criticized the city for failing to give enough information on the assessment process, as well as for allowing a property appraisal that used an inferior appraisal method, didn’t take into account local land values, and in some cases assessed more than what the property was 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.

Yet the property owners still have to pay something for the project; Rysavy ordered their assessments overturned and a reassessment of those properties.

City Administrator Jim Hurm declined to comment on what city attorney David Hoversten told the council Monday night. He did say the city was still forming its reaction to the ruling and reassessments had not yet been rescheduled.

Howe said last week he wasn’t sure how the city could properly reassess his property when it had decreased in value every year since 2009.

“I don’t know how they’re going to go back in time and create a value when now, there’s been such a substantial reduction in property values because of the economic downtown,” he said. “I think it’s going to be very difficult to prove any increase in value.”

Howe called on the city to be held accountable for what he said were illegal assessments, which several audience members echoed Monday night.

“My driveway, after [the city put in the sewer system] is not the way it was when they started,” Roger Jorgenson told the council. Jorgenson is one of the owners of about 27 property lots who are contesting the city’s assessments. “They said they’d put it all back together the way it was, [but] it’s got a hump in it, and it’s crumbling all over.”

Jorgenson said the rest of his driveway was deteriorating as a result of the city’s construction. Public Works Director Steven Lang promised to meet with Jorgenson and inspect the property this spring after the ground thaws.

Yet those property owners will meet with the city in court in April. Though it’s unclear how Rysavy’s previous ruling will affect the upcoming appeal, several residents at the meeting said they were confident the city would lose its case.

“If the judge deemed it unconstitutional over a dollar amount, then they’re all [unconstitutional],” property owner Rich Kiker said. “They’re all the same. It’s the same case. It’s the same process.”

It’s unclear whether Rysavy’s previous or upcoming rulings would force the city to reappraise each lot, and whether residents already paying could contest their assessments.

“Rest assured, [city officials] don’t want the gate and the stampede to open out,” Howe said. “If people found out you can challenge the assessment and find out you have a shot at beating the city, you’re going to have a very tough time down at city hall.”