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Fred M. Hector, Jr v. City of Fargo

April 10, 2012


Appeal from the District Court of Cass County, East Central Judicial District, the Honorable John Charles Irby, Judge.

The opinion of the court was delivered by: Crothers, Justice.

N.D. Supreme Court

Hector v. City of Fargo,

This opinion is subject to petition for rehearing. [Go to Documents]

[Download as WordPerfect]

2012 ND 80


Opinion of the Court by Crothers, Justice.

[¶1] Fred M. Hector, Jr., appeals from a district court judgment affirming the Fargo Board of City Commissioners' ("City Commission") decision approving special assessments against his property. In his appeal to the district court, Hector alleged at least 34 errors existed in the proceedings for the special assessments. In his appeal to this Court, he raised sixteen issues and subissues, but for purposes of this decision we consolidated his issues into four related subjects. Hector argues the total amount assessed for an improvement project was improperly calculated and should have been based on the City's true costs for the project, the method used to determine the amount assessed against his property was improper, the Assessment Commission failed to comply with certain statutory requirements and the City Commission failed to properly review the Assessment Commission's decision. We affirm.


[¶2] Improvement District 5314 was created in August 2007 to improve infrastructure in south Fargo along 52nd Avenue South and Interstate 29. The improvement district included property from the Red River to the Sheyenne River and from 40th Avenue South to approximately 52nd Avenue South. On August 27, 2007, the City Commission adopted a resolution of necessity for the improvement district, which declared it was necessary to construct bridges, PC concrete pavement, grading, storm sewers, water main distribution, signals, street lighting, bike trails, and incidentals. The resolution also declared the entire cost of the improvements would be specially assessed against the benefitted property in the district in amounts proportionate to but not exceeding the benefit the property derives from the improvements. The City Commission received some protests from property owners but declared the protests insufficient.

[¶3] An August 2007 City Engineer's Report estimated the project would cost $54,826,585. The Report proposed the project would be funded from various sources, including:

"Street Sales Tax$4,493,862Water Utility Funding$5,475,540Federal Funding $24,410,000Special Assessments $12,840,948Miscellaneous $7,056,232"

[¶4] The project was divided into three phases. Phase 1 consisted of paving, water main installations and storm sewer upgrades along 52nd Avenue South from University Drive to 31st Street South. Phase 2 consisted of all roadway improvements from 31st Street South to 38th Street South and the Interstate 29 and 52nd Avenue South interchange, including frontage roads. Phase 3 consisted of paving, water main distribution and storm sewer construction west on 52nd Avenue South from 38th Street South to the Sheyenne River. Phases 1 and 2 were partially funded by state and federal funds, and the North Dakota Department of Transportation ("DOT") was involved with the administration of those parts of the project.

[¶5] After the project was substantially completed in 2009, the City Commission adopted a resolution directing special assessments be levied. The total cost of the project was approximately $58 million, and property owners were assessed a total of $16,343,400.03. The proposed special assessments followed the City's Infrastructure Funding Policy, which was used to initially set the amount of special assessment against each property. The City Commission had adopted a general infrastructure funding policy to make similar assessments for similar projects as uniform as possible throughout the city. The policy "caps" the amount specially assessed against a property, and a formula is used to provide the Special Assessment Commission with estimated assessments for various projects based on front footage or square footage. The amount determined under the formula is considered to be the amount the property benefits from the improvement without considering the actual cost of the improvement.

[¶6] On August 25, 2009, the Special Assessment Commission reviewed the special assessment list containing assessments derived from the policy for property in the improvement district. In late August and early September 2009, the City sent property owners notice of the proposed assessments against their properties.

[¶7] Hector owns four parcels within Improvement District 5314. Two parcels are north of 52nd Avenue South and west of Interstate 29 and the other two parcels are directly east of Interstate 29 and north of 52nd Avenue South. Hector's four parcels together are approximately 175 acres. Hector received notices of the special assessments on his property in August and September 2009. The special assessments against Hector's property total $6,856,274.45, and the bulk of the assessments are for the construction of frontage roads on his property. Hector and the DOT entered into a written agreement about the frontage roads, including a location for one of the roads to enhance the value of Hector's property. The DOT provided funding for a typical two-lane asphalt road for the frontage roads. In order to support future development, however, the City designed the frontage roads in an urban design, with pavement and gutter. The cost of improvements above the funding the DOT provided for the frontage roads initially was borne by the City and was subject to special assessments. Hector was assessed $4,577,141.63 for the frontage roads. The City reached an agreement with Hector to defer the payment of the special assessments against his property for ten years.

[¶8] On September 13, 2009, Hector filed an objection to the special assessments against his property with the Special Assessment Commission. A Special Assessment Commission meeting was held on September 14, 2009, and Hector appeared through his counsel. The Special Assessment Commission heard Hector's argument and continued the meeting to allow the City time to respond to Hector's objections. On September 15, 2009, the Special Assessment Commission confirmed the assessment list. The assessment list was filed with the City Auditor's Office, and notice was published in the official city newspaper on September 21, 2009.

[¶9] On September 29, 2009, the Special Assessment Commission reconvened its meeting and Hector again appeared through counsel. He filed a supplement to his prior objection to the assessments and was provided an opportunity to present argument about his objection. The Special Assessment Commission again continued the meeting to allow the City time to respond to Hector's objections.

[¶10] The Special Assessment Commission reconvened its meeting on October 15, 2009. Hector also appeared at that meeting through counsel and filed further materials to supplement his objections. After hearing Hector's objections, the Special Assessment Commission approved the assessment list and assessments against Hector's property.

[¶11] On October 19, 2009, Hector appealed the Special Assessment Commission's decision to the City Commission. At a City Commission meeting, Hector appeared through counsel and was given an opportunity to be heard on his appeal. The City Commission approved the special assessment lists and assessments against Hector's property.

[¶12] On November 9, 2009, Hector appealed from the City Commission's decision approving the special assessment lists to the district court, alleging 34 separate errors and arguing the City Commission acted arbitrarily, capriciously, or unreasonably and contrary to the law. The district court affirmed the City Commission's decision.


[¶13] This Court has outlined its limited review of a local governing body's decision on special assessments:

"'The special assessment commission is in essence a legislative tribunal created by legislative authority to "(1) determin[e] the benefits accruing to the several tracts of land in an improvement district by reason of the construction of an improvement and (2) assess[ ] the costs and expenses thereof against each tract in proportion to the benefit received." Accordingly, judicial review is limited to assuring that local taxing authorities do not act arbitrarily, capriciously, or unreasonably. Courts are not to act as a super grievance board, and we do not try special assessment cases anew or reweigh the evidence. Rather, we begin with the presumption that assessments for local improvements are valid, and the burden is on the party challenging the validity of the assessments to demonstrate they are invalid.' We must affirm the decision of a local governing body unless it acted arbitrarily, capriciously, or unreasonably, or there is not substantial evidence supporting the decision. . . . A local governing body's failure to correctly interpret and apply controlling law constitutes arbitrary, capricious, and unreasonable conduct." Hector v. City of Fargo, 2010 ND 168, ¶ 5, 788 N.W.2d 354 (quoting Bateman v. City of Grand Forks, 2008 ND 72, ¶ 10, 747 N.W.2d 117) (citations omitted).


[ΒΆ14] Hector argues the total amount assessed for the improvement project was improperly calculated and should have ...

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