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cp09-27-1988 Closed Meeting c0 PENDING LITIGATION: CLOSED MEETING HUTCHINSON CITY COUNCIL TUESDAY, SEPTEMBER 27, 1988 6:30 P.M. 1. Report On Airport Negotiations And Acquisition 2. Report On Claim By Sturges for Ditch Construction 3. Report On Status of Claim By Curt Bradford (Den -Mar) for Water Useage 4. Report On Special Assessment Appeal By DeGrote 5. Report On Special Assessment Appeal By Bradon, Wagner, Baumetz & Zabel 6. Report On Status of Hinde vs. Burns Manor Municipal Nursing Home r1 LJ Ai?NOLD & MGDOWELL DAVID n. ARNOLD ATTORNEYS AT LAW CHARLES R. R. CARMICHAEL 101 PARR PLACE yV, GARY D. WDOWELL 5881 CEDAR LARK ROAD STEVEN A. ANDERSON HUTCHINSON, MINNESOTA 55350 MINNEAPOLIS, MINNESOTA 55416 O. BARRY ANDERSON (012)587 -7575 (612)545.9000 STEVEN S. HOGE MN TOLL FREE 800- 343 -4545 CHARLES L. NAIL, JR. RESIDENT ATTORNEY LAURA R. PRETLAND O. BARRY ANDERSON 501 SOUTH FOURTH STREET DAVID A. BRUEOOEMANN PRINCETON, MINNESOTA 55371 JOSEPH M. PAIEMENT (612) 389 -2214 JAMES UTLEY \1 lr JULIA A. CHRISTIANS August 26, 1988 Gary D. Plotz Hutchinson City Administrator 37 Washington Avenue West Hutchinson, Mn. 55350 Re: Sturges vs City of Hutchinson Our File No.: 3244 -87 -0008 PERSONAL AND CONFIDENTIAL Dear Gary: As you know, I have requested a closed meeting to discuss the is above referenced subject. I would asked that you would prepare some kind of confidential packet for each of the council members as I will be presenting materia no only with respect to the Sturges claim but also the airport claims, and in both cases, a closed meeting is appropriate because of pending or threatened litigation. It is my recommendation that the City of Hutchinson commence an eminent domain proceeding against Delmar Sturges to acquire a fee interest in the property actually taken for the ditch. I have consulted to some extent with George Hoff, who has been appointed by the insurance carrier to represent the city on the claims brought against the municipality by Sturges. There are two issues that need to be addressed. First, there are a number of excellent waiver and estoppel type arguments that can be made that will help the city avoid what I would call "extra" damages. As you may recall, Sturges has claimed, among other things, that the city has damaged either himself or his property by "trespassing," which would result in damages in excess of the value of the property if he is able to prove his claim. (Under limited circumstances, a party committing the trespass may be liable for treble damages). However, the fact is that he stood • silently by and watched the work being performed and I think strong arguments can be made in defense of the city on this issue (Z) Mr. Gary D. Plotz August 26, 1988 Page 2 There is a second issue, however, and that is that the city has received a benefit and a burden has been imposed upon a few owners property, for which there has been no compensation. I think it un- likely that a court will allow the city to escape completely from the responsibility for the "damage" done to the property of Delmar Sturges. Under the circumstances, an eminent domain procee from under Mr. Sturges. work on this issue and I material for the council attachments. it would appear appropriate to commence ding to see if we can yank some ground put Gene Anderson has done some very preliminary would ask that you would include in the his letter to me of August 22, 1988 and I would be happy to answer any questions regarding this matter. Very truly yours, \I G.ndetsdn • GBA• Enclosures • (612) 587 -5151 jffHUTCHINSON, ITY OF HUTCHINSON WASHINGTON AVENUE WEST MINN. 55350 4 August 22nd, 1988 Mr. Barry Anderson City Attorney 101 Main St. So. Park Place Hutchinson, MN 55350 RE: Sturgis v. City of Hutchinson Hoff File No. 2266 -005 GAB File No. 56527 -12212 Your File No. 3244 -87 -0008 Dear Mr. Anderson: In an effort to respond to your letter dated August Ilth, regarding the above matter, the project file has been reviewed. Project 80 -04 involved construction • of storm sewer and appurtenances on Century Avenue, Boston Street, Paden's First Addition, and the ditch on the Sturgis property. The improvement hearing was held on March 25th, 1980, the improvement was orderd on that date, a contract was awarded to Progressive Contractors, Inc. of Osseo, MN, and the assessment hearing was held on August 25th, 1981. Among those to whom notices were sent for the improvement hearing and the assessment hearing, was Delmer Sturgis for the property he owned in Paden's Addition. He may also have been sent a notice of deferred assessment (Roll No. 122) to the tract on which the ditch was constructed, though I cannot reach a conclusion in that regard at this time. To my knowledge, Council minutes have not been reviewed either. As for the questions presented in your letter, I provide the following: 1. Mr. Priebe's addresses and phone numbers are: Present: Apartment 204 2400 West 9Ist Street Bloomington, MN 55431 612 - 881 -1135 Winter 187 -188: Route 2, Box 846 Alamo, Texas 78516 512- 781 -1501 2. Other than my letter dated January I5th, 1988, I have had no other communications of consequence with Mr. Priebe regarding this matter. Sturgis v. City of Hutchinson August 22nd, 1988 Page 2 3. Nothing was found in the file of attorney Schaefer's advice to the City Engineering that Sturgis was of no importance as to the project. 4. As for the relative location and extent of the ditch, enclosed is a drawing of a land survey done for the City on the ditch on September 11, 1987. The ditch covers a tract of land about 100 feet in width and 2,000 feet in length, an area of 200,000 square feet or 4.59 acres. According to the City Assessor, average farmland is valued from $500 to $700 per acre, while choice farmland is about $1,000 per acre. The value of the property would then be somewhere between $2,300 and $4,600. As for possible severence damages, note that, according to owners shown on the survey, Sturgis does own non - contiguous parcels on both sides of the ditch and if Sturgis does have a right to cross the Bank property, and access drive across the ditch was provided during the construction to access the tract east of the ditch. 5. As the areas adjacent to the ditch develop, it would be desirable to install a pipe in the ditch and then fill it. However, depending on the availability of fill materials, that could be an expensive project. I hope that the foregoing has helped to answer some of the questions regarding the project and the pending claim. Sincerely, CITY OF HUTCHINSON LM��Qj" Euge Anderson Director of Engineering EA/pv cc: Gary D. Plotz, City Administrator • 0 DAVID B. ARNOLD •CHARLES R. CARMICHAEL GARY D. McDOWELL STEVEN A. ANDERSON G. BARRY ANDERSON STEVEN S. HOGE CHARLES L. NAIL, JR. LAVRA E. FRETLAND DAVID A. BRUEGOEMANN JOSEPH M. PAIEMENT JAMES UTLEY JULIA A. CHRISTIANS September 12, 1988 Ai?NOLD & MODOWELL ATTORNEYS AT LAW 101 PARR PLACE HUTCHINSON, MINNESOTA 55350 (612) 587 -7575 RESIDENT ATTORNEY G. BARRY ANDERSON IVN Mr. Gary D. Plotz City Administrator+ 37 Washington Avenue West Hutchin —� PERSONAL & CONFIDENTIAL / �tTHt�l *_vr /Den Mar Our File No. 3188 -87 -0056 �f a� N 5861 CEDAR LASE ROAD MINNEAPOLIS, MINNESOTA 55410 (012) 545 -8000 MN TOLL FREE 800- 343 -4545 501 SOUTH FOURTH STREET �INCETON, MINNESOTA 55371 (812)388 -2214 �6CE(y� 9K� • Dear Gary: In connection with the proposed special meeting to discuss pending litigation, I would appreciate it if you would place the above referenced matter on the agenda as well. I am enclosing the following documents which should be included in the packet: 1. Bradford letter dated June 16, 1988 and enclosure; 2. My letter of April 12, 1988; 3. Richard Nagy memorandum of January 21, 1988. 4. City of Hutchinson schedule showing projected error rate 1�C of 638. J W L) �I believe there might also be a sched floating around somewhere which shows the error factor at 48 and per Naps the Councll w find this information to be helpful. This case certainly falls under the category of threatened litigation as I get either a letter or telephone call from Bradford once a month or so alleging that if something is not done quickly, he's "going to start a lawsuit." 0 While I certainly wouldn't suggest a special meeting to discuss this problem alone, as long as we are discussing other pending litigation, it is appropriate to discuss this claim as well. C �Y Mr. Gary D. Plotz September 12, 1988 Page 2 As I have pointed out on prior occasions, the City is going to have some difficulty resisting this claim. There doesn't appear to be any dispute that the meter was defective, although the extent of the problem is certainly a point of controversy. The City also probably cannot escape responsibility by relying solely on the Statute of Limitations because Bradford and his predecessor in title could not have had notice of the defective meter until it was brought to their attention. (If this case is litigated, it would be my intention to argue that they should have had notice concerning the problem because of the "jump" in the water bill. I frankly don't think that argument will succeed). The City does have one potential defense having to do with the need to install a remote meter, since the property owner began locking the utility room (see Nagy's memorandum). However, I don't very much that a court will allow Hutchinson to escape responsibility because of an error completely within the City's control (i.e., inaccurate meter). The final problem is, of course, the fact that the City has had the benefit of someone else's money for an extended period of time with only the amount in dispute. If the City is correct regarding the error factor, it would appear that the maximum exposure to the City is somewhere around $18,000. It would appear to me to be appropriate to authorize a maximum of $10,000 in full satisfaction of all claims arising out of the problem with the meter. incidentally, one additional complicating factor is the absence of the offending instrument. As you may recall, the City routinely discarded the defective meter when it was removed, which may create an inaccurate suspicion in the minds of some as to the reason for the destruction of the meter. If you have any questions with regard to this matter, please do not hesitate to contact me. Thank you. Very �xujy son Enclosure 0 • s -1 BRADFORD & PR"OW ATTORNEYS AT LAW • 126 NORTH FRANKLIN STREET - RIVERSIDE PLACE HLTCHINSON, MINNESOTA 33330 C(/1ITJS N. BRADFORD DAN K PROCHNOW June 16, 1988 TELO ZONE (612) 787 -7720 Mr. G. Barry Anderson Attorney at Law 101 Park Place Hutchinson, MN 55350 I RE: Utility Overpayment Dear Barry, Our File 87 -588 �f pVi�JU/Y�J Regarding your letter of April 12, 1988, I don't know what your 1971 date is all about because the building • was occupied in 1967. The meter was in until replaced, wasn't it? I enclose up -to -date usage information which shows the proper settlement percentage should be 75 %. Please keep this file active and get some action from the Council. There cannot be a council member interested in the legal jargon of a possible defense regarding time. The City has my client's money. If they view it in any other light, then I would certainly like to speak with them at the next meeting. CMB:sb CC: Marlin Torgerson Paul Acklund n LJ Very truly yours, BRADFORD $ PROCHNOW ,, &4ct(d� Yr Curtis M. Bradford APR 1 3 1988 r 1,(3e 31 1915' s _ o ri • • UTILITY BILL , FOR! 535 JEFFERSON S'f SOUTH mm ACCOUNT NUMBER at aac AMOUNT t_s�n_Dcta_D t WA 96.63 BILLINaPER00 GB 25.80 ;;PROM SE 99.39 nlinjk7-L-m 147 EP 89.25 \ m Q1U 7 AIS 0ORREC78D. WILL be&t my yk uccMI(j b i \ [�� KEEP THIS STUB FOR YOUR OROS V 4 -- CITY OF HUTCHINSON c1� UTILITY BILL i 5 Poo, 535 JEFFER30N 8T 1 S.8 tµati Was AMOUNT ACCOUNT NUMBER awn NA 96.63 SE 263.24 BILLINO PERIOD G8 25.80 roots To EP !19.25 L METER RE_ ADING PREVIOUS PRESENT THIS AMOUNT DUE •� AFTER ` r� 587 -SIS1 TREES INCREABE�FROPERTY V ARBOR DAY# •APR '2S# 1967. KEEP THIS STUB FOR YOUR RECORDS . CITY 0 IHUTCHINBUN - UTILITY BILL PoR: 135 JEFFER30N ST -S .L'ITY OF H_UTCHINSON UTILfRY BILL FOR, 535 JEFFER50h ST S AMOUNT WA 110.07 SE 99.39 GB 25.80 EP 89.25 rILUNG PERIOD FROM TO 04 l 7 .OG 0 METER READING PREVIOUS PRESENT 7 184. UBAGE 10 000 G L' 5875151 •CITY QRDINANCE PRUHISITS INTD•THE SANITARY SEWER *. ' KEEP THIS STUB FOR YOUR RECORDS ,CITY-OF HUICHINSON r•. UTILITY BILL FQm 535.JEFF"30F: ST 5 .»- _ TNIS AMOUNT DUE AFTER izgnv 507 -5151 EFFECTIVE.- JULY..1v.1907 GA NCREAIIEO 11I645 PER MO`a► T+1 KEEP TNI pyq�y8/" BILLING PERIOD com Bill "a AMOUNT ACCOUNT NUMBER r10101a-711 M O U N T NA 130,23 NA SE t08639 99.39 BILLING PERIOD SF 151637 GB 30.15 G8 30615 FROM To EP 137655 EP 89625 METER READING • PREVIOUS PRESENT 04 289 a.A USAGE 105000 GAL TNIS AMOUNT DUE AFTER izgnv 507 -5151 EFFECTIVE.- JULY..1v.1907 GA NCREAIIEO 11I645 PER MO`a► T+1 KEEP TNI pyq�y8/" BILLING PERIOD ►ROM To r10101a-711 t4311871 r USAGE METER READING PREVIOUS ►RESENT 280 1 420 r USAGE 131000 GAL 587 -3131 REMEMBER TO HAVE YOUR NAT RF.AI) HEFURE YOU MOVE& KEEP THIS STUB FOR YOUR RECORDS / 39,E n U 371 Or ACTUAL' BILLING ANT REVISED NET AMT. INTEREST TOTAL (brad) BILLING E (611 NUMBER INTEREST COST 6 0.37 0.06 YEARS COST INTEREST WATER SEWER 51971 JAN 137.25 102.94 88.87 151.31 9.019182 17 154.3461 305.67 127.35 102.94 85;21 145.00 8.704962 16.75 145,9001 290.89 124.05 102.94 83.99 143.00 6.580222 16.5 141.5737 284.58 123.42 102.94 83.75 142.61 8.556406 16.25 139.0416 291.65 0.00 0.00 0 0 0.00 1972 164.08 123.06 106.24 180.90 10.85389 16 173.6623 354.56 103.77 123.06 83.93 142.90 8.574174 15.75 135.0432 211.95 155.32 123.06 103,00 175.38 10.52276 15.5 163.1028 338.40 167.12 123.06 107.37 182.61 10.9689 15.25 167.2743 350.09 0.00 0.00 0 0 0.00 1913 175.17 131.39 113.43 193.13 11.58797 15 173.819 366.95 156.68 131.39 106.59 181.48 10.88905 14.75 160.6134 342.10 145.58 131.39 102.4B 174.49 10.46947 14.5 151.0073 326.30 156.68 131.39 106.59 181.48 10.88905 14.25 155.1689 336.65 0.00 0.00 0 0 0.00 1974 216.49 160.11 139.34 237.26 14.23548 14 199.2967 436.55 165.09 160.11 120.32 204.88 12.29256 13.75 169.0227 373.90 147.49 160.11 113.81 193.79 11.62728 13.5 156.9683 350.76 472.43 160.11 234.04 398,50 23.91001 13.15 316.8077 715.31 0.00 0.00 0 0 0.00 1975 204.69 153.51 132.53 225.67 13.53996 13 176.0195 401.69 169.49 153.51 119.51 203.49 12.2094 12.75 155.6699 359.16 187.09 153.51 126.02 214.56 12.87468 12.5 160.9335 375.51 165.09 153.51 117.88 200.71 12.04308 12.25 147.5277 348.25 0.00 0.00 0 0 0.00 •1976 182.69 137.01 118.29 201.41 12.08466 12 145.0159 346.43 1013.28 113.76 417.00 710.04 42.60211 11.75 500.5748 1210.61 147.2 17.7 61.01 103.89 6.23322 11.5 71.68203 175.57 195.6 17.7 75.12 128.08 7.68474 11.25 86.45333 214.53 0.00 0.00 0 0 0.00 1977 32 158.4 224.2 141.56 241.04 14.46228 It 159.0851 400.12 32 153.6 224.2 139.79 238.01 14.28084 10.75 153.519 391.53 32 105.6 224.2 122.03 207.77 12.46644 1015 130.8976 338.67 36.8 74,73 41.27 70.26 4.215834 10.25 43.2123 113.46 0.00 0.00 0 0 0.00 1918 32 57.6 100.3 58.42 99.46 5.96862 10 59.6862 159.16 32 81.6 129.8 78.22 133.16 7.99092 9.75 77.91147 211.09 32 86.4 129.8 79.99 136.21 8.17236 915 77.63742 213.84 32 91.2 129.6 81.77 139,23 8.3538 9.25 77.27265 216.50 0.00 0.00 0 0 0.00 1979 32 91.2 141.6 86.14 146.66 8.79984 9 79.19856 225.96 32 81.6 156 87.91 149,69 8.96128 8.75 78.5862 228.27 32 90.01 156 91.02 154.99 9.299178 8.5 19.04301 234.03 35 100.7 156 94,98 161.72 9.70326 8.25 80.0519 241.77 0.00 0.00 0 0 0.00 1980 42 12B 167.2 116.62 198.58 11.91456 8 95.31648 293.89 42 147.2 IB7.2 123.73 210.67 12.64032 7.75 97.96246 308.63 42 166.4 187.2 130,03 222.77 13.36608 7.5 100.2456 323.01 42 179.2 257.4 161.54 275.06 16.50348 7.25 119.6502 394.71 0.00 0.00 0 0 0.00 81 44 227.8 297 194.18 330.62 19.83744 7 138.8621 469,49 44 160.6 297 169,39 288.41 17.30484 6.75 x,'116.8071 405.I2 44 127.3 297 156.99 267.31 16.03854 615 104.2505 371.56 44 127.3 216 127.02 216.28 12.97674 6.25 81.10463 297.38 0.00 0.00 0 0 0.00 1982 44 127.3 216 127.02 216.28 12.97674 6 77.86044 294.14 44 113.9 216 122.06 207.84 12.47022 5.75 71.70377 279.54 44 167.5 216- - - - - - .141.30 -- 741.61 14.4963 5.5 79.72965 321.33 55 218.4 350.3 210.42 358.28 --- - - -- _ 21.49666 _ 5. "1177ESBS- -1111.14 - ---- - - 9929.832 --- -- 16,368.52 n U Ivlo s. wRNOis NANLSS R. OARNICHASL NIOEARL N. L.SARON PATS SNOWLKS STSTEN A. ANDSRSOM 0. s RRT ANDERSON STEVEN S. Uo R CHARLES L NAIL JS. LAURA S. PRETLAND DAVID A. sSDEOOEMANM JOSEPH X. PAIEMENT JAMES OTLET • April 12, 1988 ARNOLD & McDOWELL ATTORNZYS AT Lsw 101 PARK PLAGR SRtlI BReAN 4X3 WEb Me9MN1N48M1 91V*604% 94446 3611Mf1PRl(S. yINN49". 4 SSSI! (e12) 887 -7878 (019) 545 -9000 NN Toll PSES goo- 340.45.19 Mr. Curt Bradford Bradford & Prochnow 1206 Franklin North Hutchinson, MN 55350 RESIDENT ATTORNEY 0. sARRT AI.DSRSON RE: Alleged Utility Overpayment Dear Curt: 901 SOUTH FOURTH STREET PRINCETON. MINNESOTA 55O71 (SIR) Os9.3311 I'm responding to your handwritten note of last week regarding the above - referenced subject. If I recall the status of our discussions on this matter, the City has offered to settle your claim by paying to you the sum of $5,000 to be divided between yourself and the prior property owner. Your demand for settlement is approximately $18,000. Your *demand" does not adequately reflect all of the problems that are inherent in this litigation and the amount of your demand makes it very difficult to convince the city council to significantly increase its offer to settle your potential claim. This is so for several reasons. First, you seem to take the position that the error goes back to 1967. Our records indicate that the meter problem, if it indeed existed, dated from no earlier than January of 1971 and of course, perhaps later. Second, you insist on comparing your situation with Haukos, who as you know brought a similar claim to the city council which was eventually settled. Haukos' claim was much more recent and as a compromise, the City paid him using a slightly higher error factor, over the recommendation of Staff, I might add. Staff's calculation Mr. Curtis Bradford April 12, 1988 Page 2 c, showed the error factor should be no higher than 63% rather than 748 used in the Haukos situation. Third, assuming you prevail with a complete victory in all respects, the maximum you will be entitled to will be somewhere in the neighborhood of $1$,500. Under the circumstances it is very difficult for me to make a recom- mendation to the council to pay significantly more than $5,000 when your demand basically represents the maximum that you are likely to receive. All of this discussion, of course, ignores potential problems that you may have in proving your claim. It is not necessary to repeat those problems here and while I do not overemphasize them, it is important they not be ignored in your calculation. 9 Please get back to me at your earliest convenience. rn the interim, I will convey to the council your frustration with the process and your feeling that if prompt resolution is not achieved, litigation will • become inevitable. Thank you. Very truly yours, ARNOLD & McDOWELL G. Barry Anderson GBA /lh cc: Gary D. Plotz • 0 • 26I OF ACTUAL IILLINS ANT 16nd1 REVISEO 011.1.118 0 0.26 62.43 $9. N 39.02 $0.85 0.00 74. u 58.91 72.31 13.15 0.00 79.71 11.90 72.01 70.90 0.00 97.92 01.55 79.911 160.46 0.00 93.13 03.91 81.56 12.14 0.00 13.11 193.03 42.87 32.86 1.00 131.48 130.23 117.75 29.00 0.00 73.03 16.96 11.11 19.46 0.00 92.53 93.71 95.99 101.71 0.00 123.95 126.94 133.94 155.52 0.00 100.45 163.03 15632 133.26 0.00 133.26 129.77 143.71 202.16 NET ART. 9 177.74 170.41 167.11 167.51 0.00 212.41 167.85 206.00 714.73 0.00 226.15 213.17 204.96 213.17 0.00 278.68 240.65 227.62 468.08 0.00 265.87 239.02 252.04 733.76 0.00 236.51 134.01 122.01 150.44 0.00 263.17 279.57 244.03 12.33 0.00 116.03 136.11 159.99 63.54 0.00 172.17 175.82 112.11 IB9.% 0.00 233.25 247.46 261.66 323.01 0.00 310.33 338.77 313.98 251.01 0.00 254.04 244.13 263.79 420.14 llu2.s0 INTEREIT fill 0.067EMS 10.66414 O 111.2934 10.22481 16.15 171.2667 10.07836 It.3 166.2929 10.05038 16.25 163.3111 0 0 12.71902 16 203.9113 10.07125 15.75 151.6222 12.36007 15.5 191.5811 12.88399 15.E 196.4809 0 6 13.61126 15 204.169 12.79031 14.75 188.637 12.29117 14.5 171.3733 12.79031 14.25 182.2619 0 0 I6. n114 11 1.1.0916 11.43188 13.75 198.3316 13.65711 13.5 184.3754 28.06478 13.E 372.1233 0 0 13.90108 13 206.757 14.3412 12.E 112.8503 13.12261 12.3 119.033 14.14586 12.E 173.2163 0 0 14.19168 12 170.3362 50.04058 11.75 517.9768 7.32156 11.5 14.19794 9.02632 11.E 101.5464 0 0 16.98744 It 116.8618 16.77432 10.751180.3239 11.64312 10.3 153.7528 4.931932 10.E so: nn 0 0 7.01016 10 70.1076 9.38616 9.75 1.51506 9.59928 9.5 91.19316 9.8121 9.1. 90.1647 0 0 10.33632 9 3.02688 10.54944 1.75 12.3076 10.92681 1.5 .17814 11.39718 1.25 4.02921 0 6 13.99481 1 111.959 14.81736 7.73' 115.067 13.69981 01 0 19.38501 7.1. 010.5415 0 0 23.30112 7 163.1078 20.32632 4.75 137.2027 11.83892 615 122.453 15.211.2 6.1.95.26575 0 0 13.24252 6 91.45512 14.61756 3.75 84.22347 17.0274 5.3 93.6507 23.25028 5.1. 132.564 16y.��j l v 359.04 311.68 334.27 330.83 0.00 116.17 316.48 397.51 411.21 0.00 431.02 101.83 383.21 395.43 0.00 512.78 439.18 412.00 140.20 0.00 471.82 421.87 441.08 109.03 0.00 446.91 1421.90 206.22 231.99 6.00 469.99 439.90 397.00 133.29 0.00 186.95 247.95 251.18 254.30 0.00 265.30 268.13 274. 99 283.49 0.00 345.21 362.52 261.66 463.63 0.00 531.46 475.97 436.43 349.31 0.00 345.50 328.35 377.44 553.40 I9.IOB.B7 RATER SEWER 1971 JAN 137.25 102.14 121.33 102.94 124.05 102.94 123.42 102.94 1972 164.08 123.06 103.77 123.06 155.32 123.06 167.12 123.06 1973 175.17 131.39 156.68 131.39 HIM 131.39 156.61 131.39 1974 216.49 160.11 165.09 160.11 147.49 160.11 472.43 160.11 1975 204.49 153.31 169.49 133.51 187.09 153.51 169.09 153.51 1976 182.69 137.01 KNELL 1013.28 113.76 LUBMN 147.2 17.7 183.6 17.7 1977 32 158.4 224.1 32 153.6 124.1 32 105.6 224.2 36.8 74.73 1978 32 $7.6 100.3 32 11.6 129.8 32 16.1 129.1 32 91.2 129.8 1979 32 91.2 141.6 32 81.6 I% 32 MI 156 35 100.7 156 1980 42 128 187.1 42 147.2 187.2 42 166.4 IB7.2 42 179.2 257.4 1981 44 227.8 297 44 160.8 297 44 127.3 297 44 127.3 216 1412 44 117.3 116 11 113.9 216 44 167.5 116 55 218.4 350.3 REVISEO 011.1.118 0 0.26 62.43 $9. N 39.02 $0.85 0.00 74. u 58.91 72.31 13.15 0.00 79.71 11.90 72.01 70.90 0.00 97.92 01.55 79.911 160.46 0.00 93.13 03.91 81.56 12.14 0.00 13.11 193.03 42.87 32.86 1.00 131.48 130.23 117.75 29.00 0.00 73.03 16.96 11.11 19.46 0.00 92.53 93.71 95.99 101.71 0.00 123.95 126.94 133.94 155.52 0.00 100.45 163.03 15632 133.26 0.00 133.26 129.77 143.71 202.16 NET ART. 9 177.74 170.41 167.11 167.51 0.00 212.41 167.85 206.00 714.73 0.00 226.15 213.17 204.96 213.17 0.00 278.68 240.65 227.62 468.08 0.00 265.87 239.02 252.04 733.76 0.00 236.51 134.01 122.01 150.44 0.00 263.17 279.57 244.03 12.33 0.00 116.03 136.11 159.99 63.54 0.00 172.17 175.82 112.11 IB9.% 0.00 233.25 247.46 261.66 323.01 0.00 310.33 338.77 313.98 251.01 0.00 254.04 244.13 263.79 420.14 llu2.s0 INTEREIT fill 0.067EMS 10.66414 O 111.2934 10.22481 16.15 171.2667 10.07836 It.3 166.2929 10.05038 16.25 163.3111 0 0 12.71902 16 203.9113 10.07125 15.75 151.6222 12.36007 15.5 191.5811 12.88399 15.E 196.4809 0 6 13.61126 15 204.169 12.79031 14.75 188.637 12.29117 14.5 171.3733 12.79031 14.25 182.2619 0 0 I6. n114 11 1.1.0916 11.43188 13.75 198.3316 13.65711 13.5 184.3754 28.06478 13.E 372.1233 0 0 13.90108 13 206.757 14.3412 12.E 112.8503 13.12261 12.3 119.033 14.14586 12.E 173.2163 0 0 14.19168 12 170.3362 50.04058 11.75 517.9768 7.32156 11.5 14.19794 9.02632 11.E 101.5464 0 0 16.98744 It 116.8618 16.77432 10.751180.3239 11.64312 10.3 153.7528 4.931932 10.E so: nn 0 0 7.01016 10 70.1076 9.38616 9.75 1.51506 9.59928 9.5 91.19316 9.8121 9.1. 90.1647 0 0 10.33632 9 3.02688 10.54944 1.75 12.3076 10.92681 1.5 .17814 11.39718 1.25 4.02921 0 6 13.99481 1 111.959 14.81736 7.73' 115.067 13.69981 01 0 19.38501 7.1. 010.5415 0 0 23.30112 7 163.1078 20.32632 4.75 137.2027 11.83892 615 122.453 15.211.2 6.1.95.26575 0 0 13.24252 6 91.45512 14.61756 3.75 84.22347 17.0274 5.3 93.6507 23.25028 5.1. 132.564 16y.��j l v 359.04 311.68 334.27 330.83 0.00 116.17 316.48 397.51 411.21 0.00 431.02 101.83 383.21 395.43 0.00 512.78 439.18 412.00 140.20 0.00 471.82 421.87 441.08 109.03 0.00 446.91 1421.90 206.22 231.99 6.00 469.99 439.90 397.00 133.29 0.00 186.95 247.95 251.18 254.30 0.00 265.30 268.13 274. 99 283.49 0.00 345.21 362.52 261.66 463.63 0.00 531.46 475.97 436.43 349.31 0.00 345.50 328.35 377.44 553.40 I9.IOB.B7 261 OF ACTUAL 611LI80 ANT Ihad1 "TER on 1971 JAN 137.25 102.94 127.35 102.94 124.03 102.94 123.42 102.94 1172 161.08 123.04 103.77 123.06 155.32 123.06 167.12 123.06 1973 175.17 131.39 156.68 131.39 145.58 131.39 136.0 131.39 1974 216.49 160.11 163.09 160.11 147.49 160.11 472.43 160.11 1975 204.64 153.51 169.41 153.51 174." 153.51 163.09 153.51 1974 182.61 137.01 BOBFLL 1013.21 113.76 1.1183411 141.2 17.7 1N5.4 17.7 1977 32 151.4 224.2 A 153.6 224.2 32 105.6 224.2 34.6 76.73 1978 32 37.6 100.3 32 11.4 129.8 32 86.4 129.1 32 91.2 129.9 1979 A 91.2 141.6 32 81.6 156 32 90.1 136 A 100.1 156 1980 42 129 187.2 42 147.2 187.2 42 146.4 167.2 41 179.2 237.4 19BI 44 227.8 297 44 160.8 297 44 127.3 297 44 127.3 216 1982 44 127.3 216 44 113.9 216 44 167.3 216 55 218.4 350.3 MISER NET ART. OILLINS 1 �y 0.20 L 62.43 59.01 39.02 58.15 0.00 74.66 56.93 72.31 75.45 0.00 79.71 74.90 72.01 74.90 0.00 97.92 14.55 79.98 1".46 0.00 43.13 83.90 81.56 12." 0.00 13.12 293.03 42.17 32.06 0.00 131.40 130.23 117.75 29.00 0.00 73.03 16.96 11.21 89.16 0.00 92.53 91.11 95.99 101.74 0.00 121.43 129.40 133." 155.52 0.00 i ".45 163.03 154.32 133.26 0.00 133.26 129.77 143.71 202." 177.74 170.61 147.97 167.51 6.00 212.40 167.15 206.00 214.73 0.00 226.65 213.17 204.96 213.11 0.06 278.60 240.65 227.62 466.01 0.00 265.07 239.02 252." 235.76 0.00 2L.36 634.01 122.03 150.44 0.00 213.12 274.57 244.05 12.53 0.00 116.85 156.44 159.99 163.56 0.00 172.27 175.82 182.11 119.96 0.00 233.25 247.46 261.64 3I3.04 0.00 318.33 330.77 313.98 254.04 0.00 254.04 244.13 203.79 420.04 •31662.50. INTEREST 4131 0.817EMS 14.21923 IT 291..77277 13.63317 16.76 2n.3556 13.43711 16.5 221.7231 13.40001 14.25 717.7583 6 0 16.19169 l4 271.919 13.42834 15.73 211.4963 16.4161 15.5.256.4415 17.171" 13.26 261.9746 0 0 18.14835 15272.2253 17.05374 14.75 251.5421 16.39662 14.5' 237.151 17.05374 14.25 243.0159 0 0 72.29472 14 312.1761 19.251" 13.75 764.7128 11.20992 13.5 245.13" 37.44637 13.25 496.1644 0 0 21.20544 13 275.6707 It.1216 12.75 243.10" 70.16332 12.5 252.044 18.16112 12.25 231. 0417 0 0 11.92624 12 227.1119 64.72077 11.76 IW.9" 9.76208 11.5 112.I634 12.03534 11.25 135.3971 0 0 2749992 11 241.1491 27.36576 10.75 240.4319 19.52416 10.5 205.0037 6.602576 10.25 67.6764 0 0 9.34766 10 93.4748 17.31486 9.75 122.0201 12.7"04 9.5 121.3909 13.0032 9.25 121.0196 0 0 13.70176 9 124.0351 19.06592 1.73 123.0761 14.56917 8.5 123.8315 MOW 1.25 125.3723 0 0 11.639" 1 141.2187 19.79641 7.73 133.4221 20.93312 0 0 25.81672 7.26 111.3187 0 0 31.06816 7 217.4771 27.10176 6.75 182.9369 25.11156 6.5 163.2706 20.32336 6.25 127.021 0 0 20.32336 1 I ?1.9102 19.53008 5.73 112.291 22.7032 5.5 124. 9676 33.647" 5.25 174.752 '(`.say � "r�C•' 1 419.91 390.17 319.70 W+.26 0.00 414.44 379.35 461.46 176.71 6.00 499.01 444.71 442.11 454.79 0.00 590.81 503.36 473.46 964.24 0.00 540.74 41282 504." 166.81 0.00 463.69 1617.98 234.29 215." 0.00 532.27 520.00 449.06 150.21 0.00 210.12 271.46 201.58 284.56 0.00 2%.31 291.90 305.93 315.33 0.00 38253 400.0 261.66 510.11 0.00 "5.83 521.71 477.25 381.06 0.00 375.98 156.42 401.66 597.59 21.590.99 • I • 9 (612) 587 -5151 W C/T Y OF HUTCHINSON WASHINGTON AVENUE WEST TCHINSON. MINN. 55350 E M 0 R A N D U M DATE: 1/21/88 TO: Ken Merrill FROM: Dick Nagy ---- Water Dept.------------------ SUBJECT: Water Meter at 535 Jefferson St. S. ------------------------ - - - - -- According to staff research, it appears that the water meter at 535 Jefferson St. S. was reading correctly prior to November of 1970. Re- cords indicate that the meter was originally installed in the fall of 1967. In talking with past water department employees, it appears that the following took place. The meter was installed in a small mechanical room on the lower level of the building where the meter readers had open access. Apparently about the fall of 1969 the management of the building began locking the room making it impossible to obtain meter readings. At this time department employees installed a remote reading device to read the meter in the laundry room, however, in installing the remote device the correctly geared register was replaced with an incorrectly geared register, resulting in excessive usage. Attached billing records show an absence of meter readings from November 1969, till November 1970. It is assumed that these bills were estimated. Note on November 20,1970 a new meter reading was en- tered and higher usage from that point on, with the first incorrect billing apparently being January 31 1971. Attachment cc: Randy DeVries Mane Olsen g -e. DONELL ARTS. i 535 Jefferson St. S. l3 sy94 73 OAT, Yf(D I IRppT wAT [R $TATt GILL TAC /(W[R ' RE I misc. I RENDERED I TOTAL mr..5 :1 1'911ALTT I ClItW I RALARCt APR 2269 7299000 2719 427 APR 30 134,000 8631000 4517 136 2719 AO AO AO 73.72 73.72 MAY 5169 - ' 73.72�.��''r'4A0 .Alt 31 16400019025,000 53A1 159 2719 AO AO .A0 81.79 c ,- X81,79 AUG 5'69 - ... ...... :,> ... _ .: __ _ _. ;,w,,� 81.79 "` A0 OCT 31 16060001,185,000 52A5 137 2719 AO AO AO 8121 8121 NOV . 469 8121 AO JAN 267 5, 0 .... x.8100 �x• r.:.. 6235 _._. , .._� T4 ,..427 - +....�z __ ,-, JAN 31 85,100 8313 " 2A9 6235 AO .00 AO 14797 "c t_14797 FEB 570 ;,,.: �. , APR 2070 __- ,_, ..___,....._..6235 -_._ __ 261000.00427 "• <'�.147.97�-- �'`;AO APR 30 7235 217 6235 2.60 .00 .00 139.47 139.47 MAY 570 139 47 .00 JUL 2370 y -1-- --6235 r--- --78, 000, 00427 „_,.__ _ _, -.r.. ,� ,•- -, .r JA 31 5585'" 1.68 6235 7.80 AO AO 127.68 `' 127.68 570 _ 12768 x' M .. 31 ,. --147.15 4.41 --6235 -7.80 HBO -. .00 221.71 °'�" -"`"2> 1 NOY 470 221.71 C NOV 2070 590,000 6235 78,000.00427 JAN 2171 "- _.- 590to00 - -- _ _�.� 1�P3X _ 7 090000427 JAM31 330,000 9211000 13725 412 10294 790 .00 AO 25211 FEB 371 - 25211 " '_' AO APR 30 309,000292206089 --12735 :.3.8219294 .,_ _7.20 .. AO :,...AO _ 241 -9 1 . __....__.... _._..:;:24131 PAT 41 290,0001,5160000 to 'ill 124.05 3.72 10294 7.80 .00 AO 23851 238A 1 241.1 OC` 3 1 - 290.0001,800.000 "`123.42 "-3.70 102.94 -7.80 - AO -- .00 237.96 - - - -- - -- x,237.86 NOV 471 237A6 `• .'.: AO JAN 2072 198060000 123.06 78,000600427 - JAN 3 172 33 60 0 00 2,1360000 "164.08 .. 656 123.06 "- 730 "" AO - - "A0 '30150 30150 FEB 472 - 30150 AC J. CITY OF HUTCHINSON HUTCHINSON. MINNESOTA • q,e. 0 LJ 5 3' S Je'e•FC�1'so,•• 1L �.." DAT[ CR[DIT 11[i[MT $AUG"$ U29D CHARD[D I•AtARCL - 2 'DEC '067 125000 * 125000 � 35.00 W 3 1730 SE 5355 4AN -5.685 5355 252000 * 1270 00 3550 VA •00 MAR 1868 1.07 IX 2625 SE 6282 PR -3-6801 62.82 a 399000 * 147000 40w0 NA JUN 1968 67.97 to it CIA -3-68a 67.97 2622 TX .00 12 13 198 ' f2g'.12 % 7`1VW 3 4 OCT 3.1 1968 s w 7-03 T290 * 1300 00 31.09 . a JAN S i S69 17I 27.19 TX 64 53 "6%53 .00 1t 12 13 14 r A....7 CITY OF HUTCHINSON HUTCHINSON. MINNESOTA ` ;.t C� t DAVID B. ARNOLD •CHARLES R. CARMICHAEL GARY D. WDO -ELL STEVEN A. ANDERSON G. BARRY ANDERSON STEVEN S. HOOK CHARLES L NAIL. JR. LAURA R. FRETLAND DAVID A. BRUEOOEMANN JOSEPH M. PAIEMENT JAMES UTLEY JULIA A. CHRISTIANS September 15, 1988 ARNOLD & MGDOWE ATTORNEYS AT LAW 101 PARE PLACE HUTCHINSON. MINNESOTA Mr. Gary D. Plotz City Administrator 37 Washington Avenue West Hutchinson, Mn. 55350 PERSONAL S CONFIDENTIAL (912) 587 -7575 RESIDE I ATTORNEq p. HAR ANDERSO % q Re: Special Assessment Appeal (DeGrote) Our File No. 3244 -88 -0021 40 Dear Gary: 0 5681 CEDAR LAKE ROAD MINNEAPOLIS. MINNESOTA 55418 (612) 545 -0000 MN TOLL FREE 800-343 -4545 501 SOUTH FOURTH STREET PRINCETON. MINNESOTA 55371 (612) 389- 2214 I am enclosing herewith the Memorandum of Law prepared in connection with the above entitled matter. The Council may be interested in reviewing this Memorandum and it might be worthwhile to include it in the fully advised as to all developments. I wish to repeat my comments at the City Council meeting this past Tuesday; Larry Rarg and Gene Anderson both did an outstanding job as witnesses. They were forthright and honest and had obviously "done their homework" before they got on the stand. Larry in particular was a little nervous, not having testified before. Both carried out their responsibilities well. I have no prediction as to the results. I had a negative feeling coming out of the courtroom because our expert, as I expressed to you on at least one prior occasion, did not do a particularly good job as a witness. However, when I review both appraisals carefully and after spending some time analyzing the appraisal for the homeowner, I'm not quite as pessimistic as I was before. Of the slightly over $4,000 actually assessed, I think the City has an Mr. Gary D. Plotz September 15, 1988 Page 2 excellent chance of having the assessment upheld at least to the extent of $2,000. (I got the homeowner's expert to admit on cross examination that there was probably some benefit to the property owner from the improvement, perhaps in the neighborhood of $2,000). It is anyone's guess as to whether or not we will prevail in the entirety. If you have any questions with regard to this matter, please do not hesitate to contact me. Thank you. Very truly yours, GBA:lm Enclosure 0 11 0 �IS, Wyyy��DAVID a. ARNOLD LRS A. "JIMICaASIL D M•DOMRLL STRYRN A. "DENSON 0. ]BARRY ANDS]BSON sTzVRR S. ]Boos CRARLRS L NAIL j 3 LAVRA S. FRRTLAND DAVID A. a ]BV ioo RMANN JOSSFR M. FAIRMRXT JAMBS CTLRY JULIA A. CHRISTIANS September 14, 1988 AalloLD & MdDOWELL ATTORNEYS AT LAw 5661 Call" LAaa RoAD MI:RIaAFOLlS. MINNasOTA 55416 (619) 545 -9000 MN TOLL F]Baa Soo -o4o -4545 CASLa MCLAW MIMxaArous TRLZCOFIIR (039)1,645.000 The Honorable John C. Schmidt LeSueur County Courthouse 88 South Park Avenue Le Center, MN 56057 RE: Larry W. DeGrote vs. City of Hutchinson Court file No.: 21410 Our file No.: 3244 -88 -0021 Dear Judge Schmidt: 001 SOVT]B FODRI]B SMSIST FRIXCRTON. MDORsoT^ Down (03S" *08-9814 Sol FARR 7LACs ]B117C ]B1N80N. MDAIasoTA 88000 (GAS) s0 -R1Ts •This letter will serve as the informal brief of the City of Hutchinson, the Respondent in this dispute. • PROCEDURAL POSTURE AND UNDISPUTED FACTS The City of Hutchinson conducted extensive road and utility repairs to Grove Street which fronts property owned by the appellant, Larry DeGrote. In addition, the City also replaced a lateral or service water line running from the main located under the center of the street to the DeGrote Property. The City assessed $3,772.80 for the roadway improvement, and $761.60 for the water line replacement. The matter was tried to the District Court, sitting without a jury, pursuant to Minnesota Statute $429.081 (1986). There is no dispute concerning procedural issues, and the only question before the Court was whether or not the increase in market value of the DeGrote property as a result of the improvement was equal to or greater than the amount of the assessment levied by the City Council. ttjA The Honorable John C. Schmidt LeSueur County Courthouse September 14, 1988 Page 2 Re: DeGrote v. City of Hutchinson, Ct File No. 21410 --------------------------- ----- ------------ ----- -- - - -- ARGUMENT The paradigm case in Minnesota on the subject of special assessments is Buettner v. Cit of St. Cloud, 277 N.W.2d 199 (1979). while fFe City is presumea Uzi have —set the assessment legally, Tri State Land Company v. City of Shoreview, 290 N.W.2d 775 (1980), t e proper y owner is en e o an independent review of all of the evidence. Buettner. A special assessment may not exceed the benefit the property receives from the improvement. If it does, the result is a taking of property in violation of the 14th Amendment to the United States Constitution. alit Homes, Inc. v. villa a of New Brighton, 289 Minn. 274, 280, 183 N.W.2 555, 559 (1971). The City established its rp ima facie case by introducing, without objection, a certified copy of the assessment roll and various hearing notices. in an effort to rebut the presumption of validity-of the City's assessment, as required by the procedure outlined by the Minnesota Supreme Court in Buettner, the property owner testified that he felt the property ha received no benefit from the improvement and also called an expert, David Lorene, to support his position. Since the ultimate test of the validity of any assessment is determined by market value (see below), a few words concerning the testimony of Lorence are relevant. Lorence has only limited experience as an appraiser. According to his testimony and his appraisal, introduced as an exhibit at trial, he has only one year of experience as an independent appraiser, and most of his professional training is as a loan officer. The independent appraiser called by the City, George Johnson, not only holds a broker's license, but is also a certified appraiser with 30 years of experience. (See appraisal conducted by David Lorence and George Johnson for detailed development of their respective credentials). Lorence admitted that he did not do a market value analysis of the DeGrote property. Rather, he confined his testimony to a discussion of other special assessments throughout the City of Hutchinson and looked only at the issue of whether or not sales in those locations recovered the full value of the assessments. From that information, he concluded that the improvement in this 0 n �J CJ The Honorable LeSueur County September 14, Page 3 John C. Schmidt Courthouse 1988 Re: DeGrote v. City of Hutchinson, Ct File No. 21410 case resulted in zero benefit to the DeGrote property, although he later amended his conclusion. There are several problems with the approach adopted by Lorence. First, a long line of Minnesota Supreme Court decisions mandate that the Trial Court decide whether there has been an increase in market value as a result of the improvement. As long ago as 1885, the Supreme Court noted, "if the special benefits to the property . are equal to the cost of the work, then an amount not exceeding the whole cost may be assessed...." State v. District Court of Ramse Count , 33 Minn. 295, 307, 23 N.W. 22, 227 (1885). The es to a applied is "the value of the parcel in toto prior to the improvement and its value after the improvement." Gibbish v. villa a of Burnsville, 200 N.W.2d 310 ' (1972). Appel an s expert con uc a no formal market value •comparisons, did not consider replacement costs, and in general presented no data from which a conclusion could be reached regarding the increase in market value as a result of the improvement. Second, even if the approach adopted by appellant was supported by law, it fails in its application to the current facts. Lorence looked at assessments in general without considering the unique conditions that prevailed in the instant controversy. while it is possible and perhaps even probable that some types of assessments do not benefit a property owner, each property is different and the effect of assessments is also different. what was the condition of the building? Was it in good repair? What did surrounding streets look like? How visible was the condition under repair? what was the character of the neighborhood in which the property was located? What precisely was the nature of the improvement for which an assessment was levied? All of these issues, to a greater or lesser extent, affect market value and none of them were addressed by Lorence. Where he did use assessment data from other properties, his analysis was neither fair nor reasonable. For example, he concluded that no increase in market value for the DeGrote property could be expected because road improvements for two properties in the neighborhood did not increase the market value • of those properties. Leaving aside the question of how he came t�:- _:_� , The Honorable LeSueur County September 14, page 4 John C. Schmidt Courthouse 1988 Re: DeGrote v. City of Hutchinson, Ct File No. 21410 -------------------------------------------------------------- to that conclusion, he admitted under cross - examination that the comparison properties did not front Grove Street, and in fact, have no connection with the conditions faced by the DeGrote property. He also attempted to use asssessment data for newer properties.) As Eugene Anderson, Hutchinson City Engineer pointed out, newer properties are subject to subdivision agreements. As Anderson testified, under a subdivision agreement, the developer, and ultimately the property owner, pays all of the improvement costs, while in the DeGrote situation, property owners were asked to pay only 27 percent of the costs. Subdivision agreements are specifically authorized by statute. A developer and a community are permitted to enter into a subdivision agreement pursuant to Minnesota Statute 5462.358 (1986). This agreement represents a tradeoff between the City and developers in exchange for allowing the subdivision of the property, thereby making it easier for the developer to sell individual lots, the City generally-receives orderly installation of utilities and a waiver of the right to a public hearing under Chapter 429. Typically, as Engineer Anderson testified, all of the costs relative to sewer, water, and road construction are assessed out and ultimately paid by the property owner. Assessments created by subdivision agreement are an artificial market force and do not necessarily bear direct relationship to the behavior of individual buyers and sellers. Note that of the 0 • Note, howev r, that i reaching his conclusio then w s no increase in market value, one of tie key factors in his opinion was hat t a �eGrote property was an older, first -time buyer type of property. Query under his theory whether the use of assessment data from any home not of similar age and condition to the DeGrote property is appropria e. Since he did not do any comparisons, it is difficult and perhaps impossible to tell which properties would fit this criteria. Nor are problems relating to location of property the only concerns raised by his appraisal. Note that two of his subject properties (No. 1 and No. 2 on Page 3 of his appraisal) are twin homes not more than three years in age. Examination of all of the 'comparablesis used by Lorence reveals that none of the homes are 25 years oTa. The Honorable John C. Schmidt LeSueur County Courthouse September 14, 1988 Page 5 Re: DeGrote v. City of Hutchinson, Ct File No. 21410 ----------------------------------- --- ----- ------- ---- -- - - - --- five properties cited by Lorence, at least three dealt specifically with property subject to subdivision agreements. In contrast to the position adopted by appellant, the City offered detailed testimony on the condition of the street and the reasons for replacing the lateral water line. The City offered the testimony of Eugene Anderson, Director of Engineering, and Larry Karg, a 19 -year employee for the City of Hutchinson, with responsibility for care and supervision of city streets. Karg testified that the street was unstable and frequently impassable, particularly in the spring. He further testified that it was necesssary to haul many loads of gravel to the street to level it and that, as a result of the gravel, it was necessary to regularly grade the street. The use of gravel in this area •caused complaints from property owners. Significantly, Grove Street was the only street in the neighborhood in which conditions had deteriorated to the point where it had essentially become an unimproved path, rather than a hard surface street. Matters were so bad that at one, point city equipment was stuck in the street and had to be hauled out. Appellant admitted that the street was in poor condition (and admitted that even he could not drive on the roadway during part of 1986), but attempted to minimize the period of time for which it was impassable. The fact is that the condition of the roadway could not be allowed to continue and the City was receiving complaints from property owners about the dust problem created by the temporary "fix." Unlike appellant, the City's expert performed a traditional before -and -after valuation as required by decisions of the Minnesota Supreme Court. Johnson did a detailed analysis of the DeGrote property and compared it with similar properties in the neighborhood. Appellant's only response to the comparison conducted by Johnson was to quarrel with his choice of comparables, even though no comparison was done by appellant. Both experts agree that condition of the roadway, access to the property and general appearance of the roadway can and will affect market value. In fact, Lorence admitted that perhaps the DeGrote property did receive "special benefit" in terms of increased market value in the approximate amount of $2,000. The Honorable John C. Schmidt •' LeSuer County Courthouse September 14, 1988 Page 6 Re: DeGrote v. City of Hutchinson, Ct. File No. 21410 ---------------------------------- --- --- ----- ------- --- ---- --- -- The rationale for upholding the assessment for the water line is even stronger. Note first that the amount of the assessment was only $761.60. Second, because of unique water conditions exper- ienced byethe City of Hutchinson, the water line currently in ex- istence had either reached or would shortly reach its useful life. Third, replacement of the line after the roadway was constructed would be a much more expensive proposition for the property owner who was required under city ordinance to h000k up to municipal water service. Fourth, both experts agreed that a buyer would want assurance that the water line was functional and would con- tinue to be functional. If it were not functional, a prospective buyer would expect the seller, at his expense, to correct it and make it functional. All of these facts are essentially self - evident and none were disputed. Under the principles laid out by the Court of Appeals in Lunderberg V. City of S__t. Peter, 398 N.W.2d (Minn. App. 1986), "(R)eplacement " cost necessary or, continued legal use impacts market value accordingly. Lu�ndeerbberg at 583. For appellant to assert that he did not receive a sp aI benefit" in at least the amount of the assessment ($761.60) • is absurd. Johnson, the City's expert, testified that he would attribute approximately $1000 of increased market value to the property as a result of the water line replacement. This case requires application of common sense. The City used a front foot method for calculating the assessment amount for road construction, a procedure specifically approved by the Minnesota Supreme Court. Anderson v. City of Bemidji, 295 N.W.2d 555, 561 (1980) .2 As Johnson pointed out in his appraisal, the construction cost at $31.44 per front foot appeared to be low (See 2 Anderson also reemphasized the method of calculating the improvement noting, "It is well established, however, that the relative benefits from an imporvement are calculated on the market value of the land before and after the imporvement and that the market value may be calculated on the highest and best use of the land. Even present use, while a consideration, is not dispositive. An ng cases 40 ryeyI' The Honorable John C. Schmidt LeSueur County Courthouse September 14, 1988 Page 7 Re: DeGrote v. City of Hutchinson, Ct File No. 21410 appraisal prepared "Correlation "). by George Johnson, under section entitled All witnesses at the trial acknowledged, as they must, that impassable roads, dust from gravel, paved property surrounded by unpaved property and general appearance affect market value. As to the road improvements alone, the assessment amount is only six percent of the market value of the house prior to the improvement (Lorence did not appraise the property, but even under his informal "guesstimate" of $50,000 to $55,000 valuation is correct, the percentage for the road improvements is still only around seven percent). It is difficult for appellant to construct a set of facts that will lead the Court to a conclusion that a property owner will refuse to pay five to ten percent of value so that access to the property will be preserved and the .roadway in front of his home will be significantly no different than the roadway in front of other neighborhood properties. The Minnesota Supreme Court addressed this issue in Schumacher ' et al. v. City of Excelsior, Finance and Commerce, Auguste 2 1988. I ave Inc u e a copy of this case for the Court's review as it is not yet available through Northwest Reporters. That case involved repairs to a sanitary sewer, a new storm sewer, and a new bituminous road surface. As with the instant controversy, Schumacher involved only the factual issue of whether the prm� vements increased the market value of the property. The trial court in that case adopted the position urged by the appellant in the current dispute: that since the property already had the benefit of a hard surface road, it therefore received no assessable benefit. Had the Supreme Court upheld the trial court on this issue, it is doubtful that a city would ever successfully recover street improvement costs, since unless there is virtually no roadway or access available at all, a property owner will generally be able to get to his home. The trial court specifically rejected the argument now advanced •by appellant. The court held that Schumacher's reasoning was flawed, •first of all, on a factual premise not supported by the �r r The Honorable LsSueur County September 14, Page 8 John C. Schmidt Courthouse 1988 Re: DeGrote v. City of Hutchinson, Ct File No. 21410 record, and second, ... (a) too narrow a view of the nature of a benefit." Schumacher at 31. Most important to the pending litigation, t—Fe Supreme Court specifically held, "ususally, if property receives better municipal services and amenities, it is worth more. It is on the basis of this common experience that the law confers rima facie validity to a city's determination of assessable benefif." ice— The Supreme Court then went on to observe, "simply because the street had a bituminous surface prior to the new bituminous surface does not necessarily disqualify the improvement as an assessable benefit. If this were not so, a city would almost never be able to assess for updating or enhancing an existing municipal infrastructure." id. CONCLUSION The Court in this case is faced with the straightforward factual • issue of whether or not the improvement constructed by the City of Hutchinson to the roadway and the replacement of a waterline resulted in an increase in market value to appellant's property in at least the amount of the assessment. In viewing the circumstances as a whole, it is only fair to conclude that the value of the DeGrote property increased by at least $3,772.80 for roadway improvements and $761.60 for the waterline replacement. Taking into account the deteriorated condition of the roadway and the need for immediate replacement of the waterline in conjunction with the testimony of an experienced appraiser and real estate broker that the marketplace will reflect those improvements in at least the amount of the assessments, the appeal should be rejected and the assessments imposed by the City Council for the City of Hutchinson upheld. Thank you for your careful consideration of these issues. Best personal regards. Very truly yours, ARNOLD & McDOWELL G. Barry Anderson • GBA /cro Enclosure cc: W.B. Haas, Esq. 11 DAVID B. ARNOLD CHARLES R. CARMICHAEL GARY D. MI DOWELL STEVEN A. ANDERSON O. BARRY ANDERSON STEVEN S. HOGE CHARLES L. NAIL, JR. LAURA R. PRETLAND DAVID A. BRUEGGEMANN JOSEPH M. PAIEMENT JAMES UTLEY JULIA A. CHRISTIANS August 29, 1988 ARNOLD & MCDOWELL ATTORNEYS AT LAW 101 PARK PLACE HUTCHINSON, MINNESOTA 55350 (612) 587 -7575 RESIDENT ATTORNEY O. BARRY ANDERSON Mr. Gary D. Plotz City Administrator 37 Washington Avenue West 5801 CEDAR LAKE ROAD MINNEAPOLIS, MINNESOTA 55410 (012) 545 -9000 MN TOLL FREE 800- 343-4545 501 SOUTH FOURTH STREET PRINCETON, MINNESOTA 55371 (812) 389 -2214 � 1 Hutchinson, Mn. 55350 Re: Brandon, Wagner, Baumetz & Zabel Special Assessment Appeal Our File No. 3244 -88 -0020 Dear Gary: On the agenda for the closed meeting set for September 13, 1988, I would like to have you also p matter of Zabel, et. al. vs. the City of Hutchinson. As you know, these four property owners are coyest ng t - -Fie amount of the assessment for property north of Highway 7 and we will need to make arrangements to hire a real estate appraiser, among other things. Thank you. Very truly yours, ARNOLD & McD�O�W�E.LL /! �� G. Barry Anson GBA:lm DAVID a. ARNOLD CHARLES R. CARMICHAEL GARY D. MCDOWELL STEVEN A. ANDERSON O. BARRY ANDERSON STEVEN S. HOGE CHARLES L. NAIL, JR. LAURA E. FRETLAND DAVID A. BRUEOOEMANN JOSEPH M. PAIEMENT JAMES UTLEY JULIA A. CHRISTIANS September 22, 1988 ARNOLD & MCDOWELL ATTORNEYS AT LAW 5881 CEDAR LASE ROAD MINNEAPOLIS. MINNESOTA 55419 (912) 545 -8000 MN TOLL FREE 800- 343-4545 GABLE MGLAW MINNEAPOLIS TELECOPIER (512)545 -1793 SEP1988 ftCEIVEO Mr. Gary D. Plotz ��68195 Hutchinson City Administrator 37 Washington Avenue West Hutchinson, MN 55350 RE: Hinde v. Burns Manor Municipal Nursing Home Our File No.: 3244 -87 -0002 Dear Gary: 501 SOUTH FOURTH STREET PRINCETON, MINNESOTA 55371 (012) 380 -2214 101 PARE PLACE HUTCHINSON, MINNESOTA 55350 (e12) 587 -7575 PERSONAL AND CONFIDENTIAL If I have not previously advised you, in addition to the other matters • that are included in the litigation packet for the closed meeting next Tuesday, the above - referenced matter should also be included. I will at that time advise the counsel of the status of this litigation. I have discussed several issues with our attorney, retained by the insurance carrier, Mark Stageberg. The Plaintiff in this case has now identified several additional experts that they wish to have testify at least one of which carries very significant credentials. It would be appropriate for the defense in this case to retain an add - tional expert, probably either a psychiatrist or a psychologist. At this juncture, we would like the Defendant City of Hutchinson to retain the expert so that Burns Manor Municipal Nursing Home and the City of Hutchinson will each have retained an expert. At this point, the expense of that expert would be City cost, although I have suggested that it would be appropriate for the insurance carriers to reimburse the City, for various reasons, that will not take place until after the trial, now set for October 30, 1988. I would expect the expense of this item to be somewhere between $500 and $1000. Thank you for your kind attention to this matter. Best personal regards. Very truly yours, • ARNOLD & McDOWELL � 7 G. 1B y Artenderson GBA 115 l N 1