Japp v. Papio-Missouri River Nrd

• Decision Date: 22 June 2007
• Docket Number: No. S-06-045.,S-06-045.
• Citation: 273 Neb. 779,733 N.W.2d 551
• Parties: William JAPP and Mari Japp, husband and wife, et al., appellants, v. PAPIO-MISSOURI RIVER NATURAL RESOURCES DISTRICT, a political subdivision of Nebraska, Appellee, and Shadow Lake Development, LLC, a Nebraska limited liability company, intervenor-appellee.
• Court: Nebraska Supreme Court

733 N.W.2d 551

273 Neb. 779

William JAPP and Mari Japp, husband and wife, et al., appellants, v.PAPIO-MISSOURI RIVER NATURAL RESOURCES DISTRICT, a political subdivision of Nebraska, Appellee, and Shadow Lake Development, LLC, a Nebraska limited liability company, intervenor-appellee.

No. S-06-045.

Supreme Court of Nebraska.

June 22, 2007.

LeRoy W. Sievers, Kevin R. McManaman, and Jocelyn Walsh Golden, of Knudsen, Berkheimer, Richardson & Endacott, L.L.P., Omaha, for appellants.

Paul F. Peters, P.C., L.L.O., of Taylor, Peters & Drews, for appellee.

David L. Welch, of Pansing, Hogan, Ernst & Bachman, L.L.P., Omaha, for intervenor-appellee.

HEAVICAN, C.J., WRIGHT, CONNOLLY, GERRARD, McCORMACK, and MILLER-LERMAN, JJ., and CARLSON, Judge.

CONNOLLY, J.

The appellants are resident landowners and taxpayers within the Papio-Missouri River Natural Resources District(District).They object to a development agreement in which the District agreed to provide funds to construct two dams in a private commercial and residential development in Papillion, Sarpy County, Nebraska.The district court denied the appellants' complaint for a declaratory judgment and an injunction.The appellants argue the agreement calls for illegal expenditures that benefit private developers.This appeal presents two questions: whether the District (1) had statutory authority to enter the agreement and (2) violated article XIII, § 3, of the Nebraska Constitution, which prohibits the state from giving or lending its credit to private parties.We affirm because (1)Neb.Rev.Stat. § 2-3235(1)(Cum. Supp. 2006) gives the District authority to enter contracts with private developers to fulfill its statutory purposes and (2) the District would not give or loan the state's credit under the agreement.

BACKGROUND

THE DEVELOPMENTS

Shadow Lake Development, LLC(SLD), a Nebraska limited liability company, develops real estate.SLD owns land located between 72nd and 84th Streets north of Capehart Road in Sarpy County, which is the site of a residential development known as Shadow Lake.SLD formed sanitary and improvement district No. 264 of Sarpy County to construct, operate, and maintain public infrastructure in its development.

Another private developer, 370 LLC, owns the land north of Shadow Lake and south of Nebraska State Highway 370 and has plans for a commercial development for that site known as Shadow Lake Towne Center (Towne Center).Sanitary and improvement district No. 267 of Sarpy County was formed by 370 LLC to construct, operate, and maintain public infrastructure in its development.Midlands Creek, a tributary of the west branch of Papillion Creek, flows through Shadow Lake and Towne Center.

WATER PROJECTS AND THE COOPERATIVE AGREEMENT

The District and the U.S. Department of Agriculture's Natural Resources Conservation Service, a federal agency involved in water resource projects, had previously planned a grade stabilization structure at the proposed developments.The District also wanted to incorporate flood control into the plan at that location.Marlin J. Petermann, the assistant general manager for the District, testified that increased development in the area had created a greater need for flood control.In addition the city of Papillion has required the construction of dams and reservoirs as flood control and grade stabilization structures in the developments.

After negotiations, the District, the city of Papillion, the developers, and the sanitary and improvement districts drafted a "Cooperative Agreement"(Agreement) providing for the construction of the dams and reservoirs.The proposed Agreement requires that SLD and sanitary and improvement district No. 264 build two dams: the Midlands Lake dam at Shadow Lake, and the Shadow Lake dam, which would span both Shadow Lake and Towne Center.The reservoirs created by these dams would be primarily in Shadow Lake.

The Agreement would require the District to contribute to the costs of design, construction, project administration, permits, and project land rights.The District agreed to pay 75 percent of the cost of the Shadow Lake dam and 100 percent of the engineering and construction costs of the Midlands Lake dam, up to a maximum of $3,357,278.The Agreement also required the District to permanently operate and maintain the dams;SLD, 370 LLC, and the sanitary improvement districts would contribute the land rights required for the project and the remaining costs.

Petermann testified that the Shadow Lake project is a multipurpose project and that its purposes include "[f]lood control, water quality, recreation, [and] sediment/erosion control ...."The appellants' expert, an engineer employed by an environmental management consulting firm, opined that the proposed dams could help control erosion and would provide some flood control for the area.The Agreement does not include requirements for recreational facilities, but Petermann stated that the plan includes about 60 acres around the reservoirs that would be accessible to the public.The city of Papillion would determine the specific details about access and facilities.

THE APPELLANTS OBJECT TO THE AGREEMENT

In May 2005, the appellants learned that the District planned to enter the Agreement to construct the Shadow Lake and Midlands Lake dams.They wrote letters to the District's board of directors (Board) objecting that it would be an illegal expenditure of taxpayer money.They also attended Board meetings to voice their complaints.Nevertheless, on June 9, the Board voted to authorize the District's general manager to execute the Agreement.On June 10, the appellants sued the District, seeking an injunction and a declaration that the Agreement violates Nebraska's statutes and constitution.They contended that Nebraska law does not permit the District to enter development agreements with private developers.

ASSIGNMENTS OF ERROR

The appellants assign, restated and consolidated, that the district court erred in (1) finding that the District had statutory authority to enter the development agreement, (2) failing to admit a proposed legislative bill(L.B. 552) into evidence, and (3) finding that the District had constitutional authority to enter the development agreement.

STANDARD OF REVIEW

Concerning questions of law and statutory interpretation, we resolve the issues independently of the lower court's conclusion.¹

ANALYSIS

THE DISTRICT HAS STATUTORY AUTHORITY TO ENTER THE AGREEMENT

The appellants contend that the District lacks statutory authority to enter development agreements with private developers.They argue that § 2-3235 does not allow the District to contract with private developers, either expressly or impliedly.

Regarding the power of a natural resources district (NRD) to contract with outside parties, § 2-3235(1) provides:

Each district shall have the power and authority to cooperate with or to enter into agreements with and, within the limits of appropriations available, to furnish financial or other aid to any cooperator, any agency, governmental or otherwise, or any owner or occupier of lands within the district for the carrying out of projects for benefit of the district as authorized by law, subject to such conditions as the board may deem necessary.

An NRD, as a political subdivision, has only that power delegated to it by the Legislature,² and we strictly construe a grant of power to a political subdivision.³An NRD possesses and can exercise the following powers and no others: (1) those granted in express words; (2) those implied in or incident to the powers expressly granted; and (3) those essential to the declared objects and purposes of the district, not simply convenient, but indispensable.⁴

Neb.Rev.Stat. § 2-3229(Reissue 1997) lists the purposes of NRD's.Under this section, NRD's may develop and execute plans, facilities, works, and programs relating to

(1) erosion prevention and control, (2) prevention of damages from flood water and sediment, (3) flood prevention and control, (4) soil conservation, (5) water supply for any beneficial uses, (6) development, management, utilization, and conservation of ground water and surface water, (7) pollution control, (8) solid waste disposal and sanitary drainage, (9) drainage improvement and channel rectification, (10) development and management of fish and wildlife habitat, (11) development and management of recreational and park facilities, and (12) forestry and range management.

The record shows that the Shadow Lake and Midlands Lake projects will achieve several of these purposes.Petermann testified that these projects would provide flood control, sediment and erosion control, recreation, and water quality benefits.The appellants acknowledge that regarding these purposes, the projects are within the District's judgment.Thus, we do not pass on the wisdom of the projects.⁵

But the appellants contend that although the projects fulfill the District's statutory purposes, it could not contract with private developers to accomplish these purposes.They argue that § 2-3235(1) does not include "developers" among the parties with which the District may contract and provide financial aid.And they urge us to consider the historical context in construing this statute, citing Allen v. Tobin.⁶Historically, NRD's assisted farmers and rural landowners under § 2-3235(1).

In construing a statute, we will give it its plain and ordinary meaning.And we will not resort to interpretation to ascertain the meaning of statutory words which are plain, direct, and unambiguous.⁷Here, we need not look to history for the meaning of § 2-3235(1) because its language is clear.It applies to any "owner or occupier of lands within the district."An "owner" is "[o]ne who has the right to possess, use, and convey something ...."⁸However transient their ownership may be, SLD and 370 LLC are the owners of the project lands.Thus, under § 2-3235(1), the District has...