Wind TIF Case To Go To Trial Or Back To Appeals Court

Osceola County, Iowa — A judge has overruled the plaintiffs’ motion for summary judgment in the case of a group of taxpayers versus the City of Harris and Osceola County.

A telephone hearing took place in August in the case, which was in regard to the Osceola County Board of Supervisors establishment of a TIF District to provide funds to be used to help finance infrastructure in the City of Harris. The judge has now made a ruling on the subject of that telephone hearing.

In March 2015, Harris was under an administrative order from the Iowa Department of Natural Resources to update its lagoon, but the city lacked the debt capacity to take on the improvements. As a result, on March 10, 2015, the city sent a letter to the Osceola County Board of Supervisors “asking for help with possibly doing a TIF on the windmills [wind turbines] for infrastructure within the City.” Within a couple of weeks, at a meeting of the board, the Harris mayor “asked that the supervisors consider establishing an urban renewal area including the turbines and city of Harris to help fund needed projects.”

In October 2015, the Board of Supervisors held a Public Hearing on a resolution to establish an urban renewal area, and approve the urban renewal plan and project for the area.  The newly-created TIF area was set to include the city of Harris, as well as an area of land upon which a wind farm had been constructed.

The plaintiffs in the case are resident taxpayers of Osceola County and of the Harris-Lake Park School District. They filed a petition for writ of certiorari and declaratory judgment challenging the resolution and the ordinance passed by or involving Osceola County and the City of Harris. In conjunction, the resolution and ordinance established an urban renewal area and an urban renewal plan and divided the tax revenue levied on that area as tax increment financing to fund the plan. The plaintiffs challenged the Supervisors’ actions, claiming they would be harmed as taxpayers.

Osceola County and the City of Harris filed a motion for summary judgment, and the district court granted it, finding the taxpayers lacked standing to challenge the resolution and their claims involving the ordinance were untimely. The taxpayers’ petition was dismissed. On appeal, the taxpayers challenged the district court’s ruling and maintained the merits of their motion for summary judgment should have been granted instead.

In their review of the case, while the Iowa Court of Appeals upheld the District Court ruling that the taxpayers’ claims were, in fact, untimely, since they were filed prior to the enactment of the ordinance they challenged; the Appeals Court did reverse the lower court’s ruling, saying that the taxpayers DID, in fact, have standing to pursue the case.

The Court of Appeals remanded the case back to District Court for further proceedings.

During the August telephonic hearing, the taxpayer group pressed for their motion for summary judgment.

District Court Judge David Lester has now overruled that motion for summary judgment, writing that the County and City didn’t need to reach a joint agreement authorizing the urban renewal area before the County created it because there was a verbal agreement in place that was later ratified by the City of Harris. He also writes that contrary to the plaintiffs’ belief that an urban renewal area must be connected or contiguous, that does not appear to have been the intent of the legislature. He writes, “Had the legislature intended that requirement be part of the definition, they certainly could have included it.” He writes that the plaintiffs also argued that this use of TIF funds violates the intent, purpose, and spirit of the law because the tax captured would not have come about due to economic revitalization and the wind turbine property would not be improved by economic development. Judge Lester says that no authority is cited for this argument and he says the County did not violate the law.

According to an attorney for the plaintiffs, John Werden Jr., there are two possible outcomes to this development in the case. First of all, the case could have to go back to district court. Secondly, Werden says his legal team is working on a way that the case could be sent back to the appeals court without again going to trial in district court.

The complete ruling from the Iowa Court of Appeals can be seen by CLICKING HERE.

Judge Lester’s ruling on the plaintiffs’ motion for summary judgement an be found by CLICKING HERE.



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