HomeMy WebLinkAbout04-10-17 Public Comment - Gallatin County Commission - SID 740, North Ferguson and West Oak Street Improvements (Megabuild) Gallatin County Attorney �o�GAL u Judge Guenther Memorial Center
Marty Lambert, County Attorney w °� 1709 West College,Bozeman,MT 59715
Phone:(4o6)582-3745
Fax:(4o6)582-3758
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April 10, 2017
Bozeman City Commission
c/o Bozeman City Cleric
Bozeman City Hall
121 North Rouse Avenue, Suite 202
Bozeman, Montana 59771
Re: Public Comment- Special Improvement District No. 740 (North Ferguson
Avenue and West Oak Street)
Dear City Commissioners,
This letter of public comment is submitted on behalf of the Gallatin County Commission and in
support of its April 3, 2017 written protest against the Creation of Special Improvement District
(SID) No. 740. 1 The County Commission respectfully requests the City Commission to
acknowledge the limits of Title 7, Chapter 12, Parts 41 and 42, Montana Code Annotated
(MCA), which establish the City's authority to create an SID and are "a condition precedent to
its right to act."2 It is the County's position that SID 740 surpasses this statutory authority and is
contrary to law. SID 740 also has been proposed without the due diligence required to place
such an expensive burden on the residents of Gallatin County. The County Commission
therefore requests that you deny the creation of SID 740.
Creation of SID 740
Gallatin County has the right to protest the creation of SID 740 pursuant to § 7-12-4110, MCA.3
A landowner cannot waive the right to protest an SID that is void ab initio (from the beginning).
For this reason, in Smith v. City of Bozeman, the Supreme Court struck down the City's argument
that the plaintiff had waived his right to protest an erroneous method of assessment.4 The Court
recognized that "a property owner cannot ordinarily waive or become estopped to urge the
invalidity of an assessment which is void by reason of an inherent defect, either of jurisdiction or
of procedure."5
Bozeman City Commission Resolution No. 4771 ("the Resolution of Intent") demonstrates that
SID 740 is void ab initio, as its method and manner of assessment are not provided for by law.
Just as "[a]ll statutory requirements as to the form and contents of an assessment must be
1 This letter is intended to set forth a basic overview of the County's opposition to SID 740. It is not meant to
provide a comprehensive explanation of all arguments against SID 740.
2 Smith v. Cio,of Bozeman, 144 Mont. 528,540,398 P.2d 462,468(1965)(citing Johnston v. City of Hardin, 55
Mont. 574, 179 P. 824(1919)).
3 § 7-12-4110,MCA provides that"any owner of property liable to be assessed for the work may make written
protest against the proposed work or against the extent or creation of the district to be assessed,or both."
4 Smith, 144 Mont. at 541-542,398 P.2d at 469.
s Id. at 541,398 P.2d at 469(citing 9 A.L.R.634).
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substantially complied with, as they are regarded as mandatory and jurisdictional . . . the
apportionment of the cost of a special improvement is essential to the validity of the
assessment."6 If an assessment is not made in conformity with the applicable law, it is void."
Further, the County has no alternative but to protest the SID at this time. The County will not be
provided the opportunity to protest any proposed levy of the assessments, as is contemplated by
§ 7-12-4177, MCA. The County has retained this right regardless of the acts of any prior
property owner. The Waiver of Right to Protest entered previously with regard to the property
now the Regional Park concerned only the creation, size, or area of a future special improvement
district.$ Nothing in the Waiver discussed the method or manner of any assessment.
Gallatin County has submitted a valid protest. The only property located within the SID is the
Regional Park, owned wholly by the County. The City Commission should accept this protest
and find that it is made by the owners of more than 50% of the area to be assessed. The City
may not then take any further proceedings regarding SID 740 for at least 6 months pursuant to §
7-12-4110, MCA.9
SID 740 Assessment
SID 740 unlawfully assesses the Gallatin County Regional Park.
SID 740 proposes to use the frontage method of assessment authorized by § 7-12-4163, MCA.
That statute allows the City to assess the cost of improvements against benefitted lots in
proportion to the lineal feet abutting or bordering the streets to be improved. This authority,
however, is restricted by § 7-12-4171, MCA, which is titled "Treatment of corner lots for
purposes of assessment." That section provides:
[W]hen assessments for improvements on both sides of a corner lot are
determined in proportion to the lineal footage, the frontage of a corner lot
in a platted block is the average of the two abutting sides.
This corner restriction applies to the Regional Park, a corner lot on Oak Street and Ferguson
Avenue. Per § 7-12-4171, MCA, the frontage of the Regional Park must be calculated by
averaging the two abutting sides. SID 740 ignores this requirement, assessing the County fully
for the entire frontage along both Oak Street and Ferguson Avenue.
The Resolution of Intent provides that the total lineal feet to be assessed is "2,255.42 feet
fronting Ferguson Avenue and 2,529.59 feet fronting Oak Street,"or a total of 4,785.01.10 It
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b Morse v. Kroger,87 Mont.54,285 P. 185, 189(1930)(citing 44 C.J.672 and 5 McQuillin on Municipal
Corporations, §2239).
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Id.
a Waiver of Right to Protest Creation of Special Improvement Districts Street,Water,Sewer Baxter Meadows
Annexation,2(October 19,2001),recorded as Doc.2053095 with the Gallatin County Clerk&Recorder.
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9§ 7-12-4113(1),MCA;.Smith, 144 Mont. at 537,398 P.2d at 467("When the city commission proceeded to create
a special improvement district,notwithstanding the fact that owners of more than 40 per cent of the area of the
property to be assessed had protested against the proposed work,the improvements should not have been made and
the assessment was void.") s
10 Bozeman City Commn. Res.No.4771, §7.2(Mar.20,2017).
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also states that County's "Share of the Improvements per lineal foot of frontage, exclusive of
interest, shall not exceed $222.18.s11 The SID will then assess the County a total of
$1,063,138.50, based on the calculation of the total lineal feet of Oak Street and Ferguson
Avenue (4,785.01) multiplied by $222.18.
This calculation is contrary to § 7-12-4171, MCA and unlawful. The City is limited to assessing
the County for the average lineal footage of the Regional Park along Oak Street and Ferguson
Avenue, or 2,392.505 feet. Based on the City's calculation that the County's share of the
Improvements shall not exceed $222.18 per lineal foot, the City is limited to assessing the
County a total of$531,566.76 under § 7-12-4171, MCA.
The City cannot support its claim that the Regional Park will derive a benefit equal to the
burden imposed by the SID 740 assessments.
The Resolution of Intent also declares the assessment of costs to be "equitable and in proportion
to and not exceeding the special benefits derived from the Improvements" by the Regional
Park.12 This declaration is made to fulfill the legal requirement that the property burdened "be
enhanced in value by such improvements to the extent of the burden imposed.s13 In effect, the
benefit must be equal to or greater than the assessment.
SID 740, however, provides no basis for the determination that the County will be benefitted
under either $222.18 per lineal feet or the total cost of $1,062.138.50. The only discernible
support for these amounts is the City's arbitrary intention to divide the total cost of the
Ferguson/Oak project among the County, Flanders Mills, LLC, and the City. The Resolution of
Intent states: "The total estimated costs of the Improvements are $2,525.667.00; the City has
committed $1,062138.50 from the Street Impact Fee Fund and Flanders Mill Subdivision has
committed $401,390.62 . . . leaving $1,062,138.50 of the costs of the Improvements to`be funded
through the District." 14 In other words, the remaining balance, as unilaterally determined by the
City, is to be paid by the residents of Gallatin County.
Further, the Resolution of Intent defines the "Public Benefit of the Improvements" as
"preserv[ing] public safety by providing through lanes and drive approaches for those who reside
along this street or use the street to access their residences and business."15 This"benefit"has no
relationship to the Regional Park. The focus is on the City residents who will use the roads to
travel to and from their homes and businesses.
The Supreme Court has specifically disallowed such arbitrary assessments. As stated in Smith v.
City of Bozeman: "The theory upon which a municipality may levy assessments for special
improvements is that the property will be benefited by the improvements to the extent of the
burden imposed."16 See also Toccf v. City of Three Forks, in which the Supreme Court again
recognized that "[i]t is fundamental to assessments for special improvements that the assessment
t Id
12 Id. at§7.3.
City of Butte v. Sch. Dist. No. 1,29 Mont. 336,74 P.869,870(1904).
14 Bozeman City Commn, Res.No.4771 at§ 1.
Id. at§9(b).
to Sntilh, 144 Mont.at 536,398 P.2d at 466. '
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be in proportion to the benefits conferred by the improvement."17 SID 740 unlawfully imposes a
$1,062.138.50 assessment on the County without any evidence, or even discussion, of the benefit
the County residents would derive from the Regional Park.
SID 740 will place a duty on the County to pay a loan not authorized by law.
The assessment also seeks to force an obligation on the County by requiring it to accept a loan
from the Arterial & Collector Street Special District. This loan requires the County to pay the
total assessment over a three year period, as well as $46,993.76 in interest into the Arterial &
Collector District Fund."
The City cannot lawfully require the County to finance SID 740 through a loan to which the
County has not agreed. The City does not have this authority. Section 7-1-112 states: "A local
government with self-government powers is prohibited the exercise of the following powers
unless the power is specifically delegated by law: . . . (3) the power to impose a duty on another
unit of local government." The City, however, seeks to force the County to pay a loan for the
SID assessments, on terms and in an amount to which the County has not agreed.
Further, the proposed manner of assessment is not provided for by Title 7, Chapter 12, Parts 41
or 42, MCA. Section 7-12-4176, MCA, requires that"[t]o defray the cost of making or acquiring
improvements in any special improvement district . . . the city council shall by resolution levy
and assess a tax upon all benefited property in any district created for such purpose." (Emphasis
added.) Similarly, by using the SID as a financing mechanism, the City is circumventing the
County's right to protest the assessments otherwise afforded by § 7-12-4177, MCA.19 Again,
SID 740 does not meet certain statutory requirements and therefore is void.2°
The County already pays for the improvements to Oak Street and Ferguson Avenue
through the Arterial & Collect Street Special District Assessment.
SID 740 has the additional effect of requiring County residents twice to pay for the
improvements to Oak Street and Ferguson Avenue. The County currently pays assessments
through the Arterial & Collector Street Special District. The Special District was created"for the
purposes of funding construction, improvements, and maintenance of transportation facilities
related to arterial and collector streets.s2 Oak Street is identified as a Principal Arterial street
and Ferguson Avenue as a Collector street in the Greater Bozeman Area Transportation Plan
(2007 Update).
In fact, the Resolution of Intent for the Arterial & Collector Street Special District identified the
District's necessity as "providing adequate long term funding for the construction, improvement,
and maintenance of arterial and collector street facilities" (emphasis added).22 Such
improvements would include "the purchase of rights of way, the installation, improvement,
alignment and connection of all necessary facilities for arterial and collector roadways including F
216 Mont. 159, 163-64,700 P.2d 171, 174(1985).
'e Bozeman City Commn. Res.No.4771 at§ 1.
'9 Section 7-12-4177,MCA requires the City to provide landowners within an SID with notice and an opportunity to
object to a resolution of intent to levy assessments.
20 Morse, 87 Mont.at 54,285 P.at 189.
21 Bozeman City Commn. Res.No.4603, § 1 (Aug.31,2015). j;
22 Id. at§4(emphasis added).
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stormwater and pedestrian and bicycle facilities, and the installation or improvement of traffic
and pedestrian controls at intersections.s23 Thus, the Special District's improvements list
includes the same improvements contemplated by SID 740. The Resolution of Intent identifies
the Oak and Ferguson improvements as "widening of the road, installation of curbing, storm
draining improvements, street lighting, and pedestrian ramps."24
In adopting the Arterial & Collector Street Special District, the City specifically found that the
District was necessary to avoid the very assessments proposed by SID 740. The City stated:
"Without the District, the transportation system is reliant on individual Trojects and property
owners for build-out of these critical roadways and pedestrian networks."2 Despite this claimed
need for the Special District, SID 740 will require the County to again pay for the improvements
to Oak Street and Ferguson Avenue. When one looks at the imposition of SID 740 in
conjunction with this existing District, the Special District looks more like an opportunity to
raise general funds from another government entity, and less like the provision of improvements
benefitting specific property.26
In summary, the City should accept the County's written protest and deny the creation of SID
740. The County asks that the City carefully review the requirements of Title 7, Chapter 12,
Parts 41 and 42. As stated by the Supreme Court: "The law on the subject is well settled, so well
indeed that no municipal officer should be ignorant of it, or fail to understand that a special
improvement district cannot be created without observance of every requirement of the statute on
the subject."27
Sincerely,
Erin L. Arnold
Senior Civil Deputy County Attorney
23 Id at§6.
24 Bozeman City Commn. Res.No.4771 at§ 1.
25 Bozeman City Commn. Res.No.4603 at§4.
26 Montana-Dakota Utilities Co. v. City of Billings,2003 MT 332,125,318 Mont.407, 80 P.3d 1247("This Court
has held that a governmental demand for money made for the purpose of raising revenue is a tax.")
27 Smith, 144 Mont.at 542,398 P.2d at 469.
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Gallatin County Attorney's Office • 1709 W. College • Bozeman,Montana 59715