Agenda - Planning Commission - 12/06/2018

Home

Zoning Bulletin October 10, 2018 I Volume 12 I Issue 19 to condition grant of an application for a subdivision on a developer's payment of an infrastructure charge. The court also held that a statutory city's authority to enter into a development contract embodying the terms and conditions of ap- proval of a subdivision does not authorize a municipality to condition approval on a developer's payment of an infrastructure charge. The court so held based on its interpretation of the statutory language. First, the court looked at the second paragraph of subdivision 2a—which the City hard argued gave the City explicit authority to impose an infrastructure charge. The court found that paragraph gave a municipality authority to condition ap- proval of a subdivision application on the developer (a) constructing or install- ing the improvements or (b) providing a form of "financial security" that is suf- ficient to assure the municipality that the "improvements will be constructed or installed according to the [municipality's] specifications." The court found that the forms of financial security listed in the statutory provision were all intended to be returned or released "unless the developer failed to satisfy the conditions of the contract concerning infrastructure improvements." In other words, the court found that the "financial security" options listed in the provision functioned similarly to a "subdivision bond" or a "performance bond" that is used to insure installation of improvements. Had the legislature intended to au- thorize municipalities to condition subdivision approval on a "cash fee" for infrastructure improvements —as the City argued —it would have used those precise terms, said the court. Here, the court found that the infrastructure charge that the City sought to impose on Harstad's subdivision application was "not a program designed to provide it with financial security." The court so found noting that the City's infrastructure charge did not contemplate a return of funds by the City to the ap- plicant in the event that the applicant satisfied all the conditions tied to that security. Instead, the court found that the money collected through such infrastructure charges went into a city -managed fund that was used for future road construction projects in the part of the City that corresponded to the development. This, determined the court, was a "charge or fee" and "not a form of financial security." In sum, the court concluded that the second paragraph of Minn. Stat. § 462.358, subd. 2a, did not authorize the City's infrastructure charge because it was not a form of financial security as contemplated in the statute. Looking at the last paragraph of subdivision 2a and the City's argument that it granted- the City broad contractual authority to impose the infrastructure charges as a condition of subdivision approval, the court found that the power to enter into a development contract does not include the power to require a developer to pay an infrastructure charge. Since the court had already concluded that the second paragraph of subdivision 2a did not explicitly authorize a city to condition subdivision approval of an infrastructure charge that is not a form of financial security, the court concluded that the contract provision in the last paragraph of subdivision 2a could "not swallow the limits in the other paragraphs of the subdivision." Again, the last paragraph provided that a municipality could condition its "approval on compliance with other require- ments reasonably related to the provision of the regulations .. .." The court found that the phrase "other requirements" referred to "additional or distinct requirements that may be necessary to implement the subdivision regulations © 2018 Thomson Reuters 7