Agenda - Planning Commission - 07/01/2004

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Country Joe, Inc., et al., Respondents, vs. City of Eagan, petitioner, Appellant. C8-95-228... Page 2 of 7 The charge was prompted by a study conducted by the city's consulting engineers in 1977, which projected a shortfall of $1.11 million in funds available to finance major street construction in the city through the year 2000. The consulting engineers proposed that the city make up this shortfall by imposing a road unit connection charge, patterned after the water and sewer connection charges already imposed by the city pursuant to state law. See Minn. Stat. § 444.075, subd. 3 (1996). The city deposits road unit connection charges collected into a Major Street Fund account, along with other sources of road funds. [Z] Funds are not earmarked for any particular project and the city does not attempt to link expenditures to any particular funding source. In addition to major street construction costs, miscellaneous charges such as sealcoating and the purchase of signal lights are occasionally paid out of the account. The original plan recommended that the charge "be reviewed annually and totally revised every 5 years in order to adjust ~br any significant changes in construction costs, revenue projections or changes in the development pattern within the City of Eagan." [n December 1979, the city revised its estimated costs of construction upward to include the addition of pedestrian walkways to the city's street design. As a consequence, the city increased the road unit connection charge for a single family residence from $75 to $185. Except for annual increases based on an inflationary index, the platt has not been Updated since this initial revision of 1979. The inflation-adjusted charge for a single family residence had increased from the initial $75 to $410 at the time this lawsuit was filed in 1994. On appeal, the city contends that the imposition of a road unit connection charge is a lawful exercise of its implied powers under Minnesota law. The city suggests that the authority to finance road improvements can be implied from several sources, including the city's municipal planning authority under Minn. Stat. ch. 462; the implied power to impose an "impact fee" to fund infrastructure improvements, as currently recognized in numerous other states; and the city's power to collect regulatory and license fees pursuant to its general welfare powers under Minn. Stat. § 412,221, subd. 32. The city of Eagan is a "statutory city," meaning it is a municipal corporation that has not adopted a home rule charter as provided for under Minnesota law. See Minn. Stat. § 410.015. As a limited statutory creation, the city has no inherent powers beyond those "expressly conferred by statute or implied as necessary in aid of those powers which have been expressly conferred." Mangold Midwest Co. v. Village of Richfield, 274 Minn..347, 357, 143 N.W.2d 813; 820 (1966). We first consider the city's contention that the road unit connection charge is a valid exercise of its implied municipal planning authority under Minn. Stat. ch. 462, the Municipal Planning Act. The policy statement introducing the act clearly expresses the legislature's intent to confer broad planning authority on cities: "It is the purpose of sections 462.351 to 462.364 to provide municipalities, in a single body of law, with the necessary powers and a uniform procedure for adequately conducting and implementing municipal planning." Minn. Stat. § 462.351. The city asserts that the road unit connection charge is merely an example of its lawful exercise of the broad planning authority conferred upon it under the act. The city relies on {)ur decisions in two municipal planning cases in support of its assertion. In Naegele O~tdoor Adver. Co. v. Village of Minnetonka, we upheld an ordinance adopted by the village requiring advertisers to phase out billboards located in exclusively residential zones. 281 Minn. 492, 505, 162 N.W.2d 206, 215 (1968). We concluded that while no statute expressly authoriz.ed such an ordinance, the power to do so must necessarily be implied to effectuate the village's express statutory authority to create exclusively residential districts. Id. at 504, 162 N.W.2d at 215: ~.~i~e://C :\D~cuments%20and%2~Settings~ageis~er.RAMSEY~L~ca~%2~Settings\Temp~rary... 6/25/2004