Millard Rural Fire Protection Dist. No. 1 v. City of Omaha

Decision Date24 July 1987
Docket NumberNo. 85-826,85-826
Citation409 N.W.2d 574,226 Neb. 50
PartiesMILLARD RURAL FIRE PROTECTION DISTRICT NO. 1, Appellant, v. CITY OF OMAHA, Nebraska, Appellee.
CourtNebraska Supreme Court

Syllabus by the Court

1. Annexation: Fire Protection Districts: Municipal Corporations. If either a fire protection district organized under Neb.Rev.Stat. § 35-501 et seq. (Reissue 1984) or a municipality seeks a judicial adjustment of matters arising out of annexation by a municipality, proceedings under Neb.Rev.Stat. § 31-766 (Reissue 1984) must be commenced as soon as it becomes evident that an agreed adjustment cannot be reached.

2. Declaratory Judgments. In a declaratory judgment action involving the determination of issues of fact, such issues may be tried and determined as in other civil actions.

3. Declaratory Judgments: Equity: Appeal and Error. In an appeal of a declaratory judgment in an equity case, the Supreme Court reviews the trial court's findings of fact de novo on the record.

Frederick S. Cassman of Abrahams, Kaslow & Cassman, Omaha, for appellant.

Herbert M. Fitle, Omaha City Atty., and Charles K. Bunger, Omaha, for appellee.

KRIVOSHA, C.J., and BOSLAUGH, WHITE, HASTINGS, CAPORALE, SHANAHAN, and GRANT, JJ.

PER CURIAM.

Millard Rural Fire Protection District No. 1 (district) appeals from an order of the district court for Douglas County decreeing the rights, duties, and obligations of the parties regarding the City of Omaha's annexation of property formerly located within the district. We affirm.

The district was organized on March 27, 1952, as a rural fire protection district under the provisions of Neb.Rev.Stat. § 35-501 et seq. (Reissue 1952). The original boundaries of the district lie in both Douglas and Sarpy Counties along the western edge of Omaha. The district, which is served by the Millard Volunteer Fire Department, operates two fire stations with eight units of firefighting equipment and four rescue units. The facilities and equipment used by the volunteer fire department are provided by the district, which pays for all expenses incurred in the operation and maintenance of the fire and rescue service, as well as the training of volunteer firefighters.

The operation of the district is funded primarily by revenue raised from an annual tax levied on all real property located in the district. The district had incurred no bond debt to finance its operation until August of 1981, when it issued $890,000 of bonds in order to purchase new equipment and build a fire station. In June of 1983, the district had a second bond issue totaling $2 million, used in part to redeem the remaining bonds outstanding from the first issue and in part to purchase additional equipment and complete the new fire station.

During the period from 1968 to 1984, the city annexed several parcels of land located within the boundaries of the district. As the parcels of land were annexed by the city, they were taken into the jurisdictional limits of the city, removing them from the boundaries of the district and lessening the district's tax base from which to draw tax revenue. When an area is annexed by the city, the city assumes all responsibility for providing fire protection and related services to that area.

Through 1981, neither the city nor the district made any attempt to negotiate an agreement regarding an adjustment of matters growing out of or connected with the numerous annexations. In April of 1982, attorneys for the district sent a letter to the city requesting that a meeting be held for the purpose of discussing a pro rata assumption by the City of Omaha of the bonded indebtedness of the district. The district and the city met in June and November of 1982 to discuss the annexations by the city and the city's assumption of a percentage of the district's bonded indebtedness. The city made a settlement offer to the district in August of 1983, which was apparently rejected by the district. The district filed a petition in the district court for Douglas County in February of 1984 and an amended petition in December of 1984, pursuant to Neb.Rev.Stat. § 31-766 (Reissue 1984), requesting a declaratory judgment determining the rights, duties, and responsibilities of the parties with respect to the annexed areas. See Neb.Rev.Stat. § 25-21,149 (Reissue 1985). The city answered the district's amended petition, alleging that the district's cause of action was barred by the statute of limitations.

At trial, Terry Jaros, secretary-treasurer for the district, testified that the annexations of areas from the district did not result in a reduction in the district's expenses because the majority of the expenses are fixed or ongoing expenses. Orlan Jurgenson, fire chief of the Millard Volunteer Fire Department, also testified that the annexations had no effect on the department's requirements for manpower, equipment, and fire stations, and there had been no material reduction in the expense of providing fire and rescue services after the annexations. Horton Dahlquist, chief of the City of Omaha Fire Division, was called as a witness for the city and testified that as the size of the fire protection district becomes smaller because of annexations, less equipment and personnel would be needed for fire protection. However, Dahlquist was not sure that the district's need for equipment and firefighters had actually decreased.

In attempting to establish the amount of recovery from the city, the district introduced into evidence schedules prepared by a certified public accounting firm, outlining the expenses incurred by the district for the fiscal years 1969 through 1984. A percentage was then obtained for each fiscal year by dividing the cumulative annexations by the total tax base plus cumulative annexations. The percentage was then multiplied by the total expenditures of the district for the following fiscal year to obtain the amount of damages for each year. The total combined damages for all years amounted to $360,945.65.

Terence Leaders, who was employed in the city finance department for 16 years and was directly responsible for annexations for 14 years, testified for the city. Leaders contested the method used by the district for calculating any amount due after annexation and outlined the method used by the city to calculate the percentage of bonded indebtedness which the city proposed to assume because of the annexations. Leaders disagreed with the district's method, which failed to include the value of property located in Sarpy County in computing the district's tax base, failed to consider the capital and liquid assets available to the district, and incorrectly considered a compounded effect of the annexations in arriving at its cumulative annexation percentage.

In determining the amount of debt to be assumed by the city as a result of the annexations, the city first calculated the net debt of the district outstanding by subtracting the district's liquid assets (cash and investments) from the amount of the outstanding liabilities (notes payable and bonds payable) of the district. Next, the city calculated the total value of the district's tax base, considering the value of land located in both Douglas and Sarpy Counties. A percentage of valuation was then calculated, dividing the value of the property annexed for each year by the total taxable valuation of the district for each corresponding year. That percentage was applied to the net debt outstanding for each year to arrive at the amount of net debt related to each annexation which was to be assumed by the city. Leaders testified that although this was the first time the city had negotiated with a fire protection district regarding annexation of a district's property, the method used by the city in calculating the net debt to be assumed was the same procedure used by the city in adjusting the indebtedness assumed upon partial annexation of a sanitary and improvement district. According to Leaders, the method used was the industry standard and "is simply taking a pro rata share of the outstanding debt of the District as each annexation occurs."

The district court found that each separate annexation gave rise to a separate claim pursuant to § 31-766 and that all claims arising prior to February 10, 1980, were barred by the applicable statutes of limitations. The district court also made the following findings:

4. The fire protection and emergency service provided by the Defendant to such annexed areas is a "liability" assumed by the Defendant pursuant to Section 31-766, Nebraska Revised Statutes.

5. In connection with each such annexation, the incremental reduction of the Plaintiff's tax base, as it relates to producing revenue for operation and maintenance, is balanced or off-set by the corresponding incremental assumption of liability by the Defendant through its assumption of fire protection and emergency service responsibility.

6. In connection with each such annexation, the incremental reduction of the Plaintiff's tax base, as it relates to producing revenue for repayment of indebtedness, is balanced by the corresponding assumption by the Defendant of a pro-rata share of such indebtedness. An equitable means of determining such pro-rata share is to take the amount of the Plaintiff's net debt times the percentage of valuation of the Plaintiff's territory annexed. This formula must be applied separately for each annexation.

7. The method of defining and computing the division of assets and liability outlined in paragraphs 5 and 6, hereinabove, is the method accepted through common usage and practice in Douglas County by affected parties in connection with partial annexations pursuant to Section 31-766, Nebraska Revised Statutes.

The district court ordered that "the Defendant pay the Plaintiff the sum of $11,346.47 in connection with such annexations occurring from 1980 through 1983. Any claims by Plaintiff for monies from Defendant for such...

To continue reading

Request your trial
5 cases
  • State ex rel. Spire v. Northwestern Bell Telephone Co.
    • United States
    • Supreme Court of Nebraska
    • September 1, 1989
    ...of factual issues, such issues may be tried and determined as in other civil actions. § 25-21,157; Millard Rur. Fire Prot. Dist. No. 1 v. City of Omaha, 226 Neb. 50, 409 N.W.2d 574 (1987). In appellate review of an action for a declaratory judgment in a law action, factual findings by the t......
  • City of Lincoln v. Windstream Nebraska, Inc., 4:10CV3030.
    • United States
    • U.S. District Court — District of Nebraska
    • July 25, 2011
    ...to authority granted by the City's home rule charter, not by statute. In Millard Rural Fire Protection Dist. No. 1 v. City of Omaha, 226 Neb. 50, 409 N.W.2d 574 (1987), a fire protection district brought an action against the City of Omaha for a determination of the rights, duties, and resp......
  • Sanitary and Imp. Dist. No. 57 of Douglas County v. City of Elkhorn
    • United States
    • Supreme Court of Nebraska
    • August 18, 1995
    ...appropriately to annexations of less than an entire sanitary and improvement district. See, also, Millard Rur. Fire Prot. Dist. No. 1 v. City of Omaha, 226 Neb. 50, 409 N.W.2d 574 (1987); City of Bellevue v. Eastern Sarpy County S.F.P. Dist., 180 Neb. 340, 143 N.W.2d 62 (1966). In construin......
  • Fed. Deposit Ins. Corp. v. Fitl
    • United States
    • U.S. District Court — District of Nebraska
    • September 2, 2016
    ...Nebraska has abolished all distinctions between actions at law and suits in equity . . . ." Millard Rural Fire Prot. Dist. No. 1 v. City of Omaha, 409 N.W.2d 574, 578 (Neb. 1987) (per curiam) (internal citations omitted). Accordingly, this Court will not strike the Defendant's Second Affirm......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT