Reams v. City of Grand Junction, 82SA288

• Decision Date: 27 February 1984
• Docket Number: No. 82SA288,82SA288
• Citation: 676 P.2d 1189
• Parties: Warren F. REAMS, Plaintiff-Appellant, v. The CITY OF GRAND JUNCTION, a body politic and corporate, and the City Council of the City of Grand Junction, and Louis Brach, Frank Dunn, Dale Hollingsworth, Karl M. Johnson, William G. O'Dwyer, Robert Holmes, Jane Quimby, as members of the City Council of the City of Grand Junction, Defendants-Appellees.
• Court: Colorado Supreme Court

Page 1189

676 P.2d 1189

Warren F. REAMS, Plaintiff-Appellant, v. The CITY OF GRAND JUNCTION, a body politic and corporate and the City Council of the City of Grand Junction, and Louis Brach, Frank Dunn, Dale Hollingsworth, Karl M Johnson, William G. O'Dwyer, Robert Holmes, Jane Quimby, as members of the City Council of the City of Grand Junction Defendants-Appellees.

No. 82SA288.

Supreme Court of Colorado,

En Banc.

Feb. 27, 1984.

Feder, Morris & Tamblyn, P.C., Harold A. Feder, Stephen B. Schuyler, Denver, for plaintiff-appellant.

Gerald J. Ashby, City Atty., Grand Junction, for defendants-appellees.

KIRSHBAUM, Justice.

Plaintiff, Warren F. Reams, appeals a judgment of the Mesa County District Court upholding the validity of a Grand Junction municipal ordinance assessing plaintiff's property for costs of a special improvement district. ¹ We affirm.

I.

On April 2, 1980, the Grand Junction City Council (council) adopted a resolution declaring its intention to create Local Improvement District No. ST-80, Phase A (the district) for the purpose of constructing an elevated arterial roadway and appurtenant sidewalks, curbs and gutters. The council also adopted a resolution approving plans and specifications for the contemplated improvements and authorizing publication of notice of intent to create the district.

On May 7, 1980, the council conducted hearings on the proposed district. Plaintiff filed "Objections and Exceptions" requesting exclusion of his property from any assessment of costs for the proposed district. ² Plaintiff also presented testimony by an appraiser, Richard Hodges, to the effect that the proposed improvements would result in a twenty-four percent decrease in the value of the Reams property and would not benefit such property. The hearing was continued until May 14, 1980, on which date further evidence was presented. The council then adopted a resolution authorizing creation of the district which, as defined, included plaintiff's property.

Pursuant to C.R.C.P. 106, plaintiff sought judicial relief to exclude his property from the operation of the proposed ordinance. Recognizing that no assessment had been made against plaintiff's property, the parties agreed to a stay of the district court action until such assessment occurred.

Subsequently, a hearing to determine appropriate assessments for the project was conducted. ³ At that hearing, the city's appraiser testified that in his opinion plaintiff's property had been benefited by the roadway to the extent of the proposed assessment against such property. ⁴ When asked to explain the basis of his opinion, he stated in part as follows:

"Well, in view of the present zoning, most logically the property would be for multi-family bulk development plans, as the property across the street has been. And ... you would have to go before the Planning Board for approval of the plan. Again, major arteries are becoming more and more important, and developers are being required to provide this sort of access and even to pay for widening streets that are already in place along land that [is] subdivided. [T]his street opens up the property to a much greater extent than it was before, and, in my opinion, ... the buyer of that property now knowing its potential and wanting it for development, would pay at least the amount of the improvements above what it was worth before."

On cross-examination, when asked to state what "dollar calculations" he made in determining the value of the property, the city's appraiser stated, "I didn't put it in dollars. I put it in common sense."

Plaintiff's appraiser also testified at this hearing. He stated that there were "no special benefits" to plaintiff's property from the roadway construction, and further opined that, based upon a comparable sales analysis, plaintiff's property would sustain a loss equivalent to "approximately $32,892."

On April 1, 1981, the council adopted an ordinance approving the assessable costs of the district. Plaintiff's property was included. With respect to plaintiff's property, the ordinance contained the following pertinent language:

"The roadway does for the Reams properties only what would be required of him or another developer to permit adequate development of the property and at a reduced cost over what would have been paid by the developer. The benefit to the land exceeds the amount of the assessment made against the land. The proof of the pudding being in the eating, one need only consider the developer of an almost identical tract to the Reams tract on the east side of the roadway from Reams who obviously felt sufficient benefit of this roadway to donate right-of-way for it and accept an assessment for its construction, which assessment exceeds the Reams assessment by about $25,000.00."

This ordinance also contained the following provision:

"Section 7. That monies remaining in the hands of the City Finance Director as the result of the operation and payments under Improvement District No. ST-80, Phase A, after the retirement of all bonds and proper payment of monies owing by the District shall be retained by the Finance Director and shall be used thereafter for the purpose of further funding of past or subsequent improvement districts which may be or may become in default or for such purposes as the City Council of the City of Grand Junction may from time to time direct."

On April 30, 1981, plaintiff filed an amended complaint in the pending district court action, requesting that the ordinance assessing his property be set aside, and seeking a declaration pursuant to C.R.C.P. 57 that such ordinance was unconstitutional. On May 9, 1981, a notice of assessment was mailed to plaintiff stating that his property had been assessed in the principal amount of $48,524.87 for the project. The notice stated that "[i]f you elect to pay by installments ... [a] one time 6 percent cost of collection and incidentals is added to the principal. Interest for the 10 year period is simple interest declining balance method at the rate of 10.4470."

The trial of plaintiff's civil action commenced June 17, 1981. During the trial, the attorney for the council acknowledged a "flaw" in section 7 of the assessment ordinance, stating that "I think that when there is added 'or for such other purpose as the City Council of the City of Grand Junction may from time to time direct,' I think that is wrong...." The council asserted that this limited portion of the ordinance could be severed, leaving the remaining portion of section 7 and all other provisions of the ordinance intact.

On November 23, 1981, the trial court entered judgment finding that plaintiff's property was benefited by the improvements and denying plaintiff's request for relief. With regard to section 7 of the April 1, 1981, ordinance, the trial court entered the following pertinent conclusions:

"Section 7 is a catchall proviso to the effect that once all the special improvement district bonds and other moneys owed by the district have been paid, any moneys remaining in the hands of the Defendant's finance director shall be used for funding other improvement districts or for other general city purposes.... Defense counsel has verbally acknowledged that that is an unconstitutional proviso. The legal question [then] becomes whether the unconstitutional taint of that section permeates the whole of the ordinance and thus the assessment against the Plaintiff.... [A]t the end of the period of collection of the assessment and the payment of the bonds, the funds in the hands of the finance director should wash. However, amortization accounting is not that precise and nominal sums are sometimes left over. Section 7 provides for their distribution in an unconstitutional way. The Court concludes that because of the size of the sum involved that the taint is inconsequential.

"To correct even that unsubstantial problem, the Court can also use constitutional construction to sever the portion of Section 7 which is tainted. Plaintiff asserts that the taint is so pervasive as to taint the whole ordinance. The Court concludes that all that part of Section 7 after the word 'of' in line 6 can be severed by deletion, or by substituting therefor 'proportionally distributing the funds to the assessed property owners'....

"In this case the provision is for a very insignificant catchall cleanup purpose and has no effect of serving as a general revenue raising proviso. The Court concludes that the proviso is severable and may be deleted leaving a complete workable ordinance. The suggested substitute language is merely indicative of what the obligation of the finance director would be to dispose of special purpose moneys."

II.

Plaintiff first contends that the evidence did not support the conclusion that the district benefited his property, and, therefore, the assessment ordinance must be declared unconstitutional with respect to him. We disagree.

Special assessments, sometimes referred to as local assessments, are ancient devices of English origin designed to finance local public improvements. See C. Rhyne, The Law of Local Government Operations § 29.2 (1980). See also Newby v. Platte County, 25 Mo. 258 (1857). We first addressed issues involving local assessments in the context of a special benefit accruing from a public improvement in Palmer v. Way, 6 Colo. 106 (1881). In Palmer, a Denver ordinance which assessed owners of lots abutting upon city streets for the cost of constructing sidewalks on the owners' property was upheld as an exercise of the police power. The decision also stated that such special assessments violated constitutional requirements of uniformity and could not be upheld under the power to impose taxes. In City of Denver v. Knowles, 17 Colo. 204, 30 P. 1041 (1892), we rejected the latter portion of Palmer 's holding in determining that the uniformity clause of the Colorado Constitution, Article 10, Section 3, does not apply to...