CITY HAPPY WITH RULING ON STREETS

Cape Girardeau officials said Thursday they were pleased with a Missouri Supreme Court decision that affirmed the legality of assessing street and sewer construction costs to affected property owners.

The city of Perryville Tuesday won on appeal a three-year court battle that challenged the city's practice of requiring property owners to pay for a portion of city street improvements.

It was the first time the policy, which is common in cities throughout the state, had been challenged in court.

The Perryville case involved Clarence L. Zahner, a resident and former city alderman, who contended that levying special assessments for street improvements without voter approval violated the state's Hancock Amendment. The amendment, approved by voters in 1980, requires cities and other political subdivisions to obtain voter approval to levy new fees or taxes.

Perry County Circuit Judge Kenneth W. Pratte in September ruled in Zahner's favor, a decision that was overturned Tuesday.

Cape Girardeau City Attorney Warren Wells said Thursday that without the Supreme Court ruling the lower court decision could have restricted many street and sewer improvements in Cape Girardeau.

"The city does rely heavily on the use of the tax bills for street projects and sewer improvements," Wells said.

The city attorney said many new lateral sewer and street projects are funded through special assessments to the abutting property owners.

"We take the position that it's favorable to everyone," Wells said of the policy. "Without that tool it would be difficult if not impossible to complete many city projects.

"It improves the property values, yet it's also a public street that anyone can use. So it's a public benefit. Another benefit of paving the gravel streets is the reduced maintenance costs, which have to come out of general revenues."

City Manager J. Ronald Fischer said he was surprised that the circuit court ruled against the city of Perryville, which resulted in the appeal. He said special assessments have been used to fund street and sewer projects long before the Hancock Amendment was approved.

"That's been a process of funding streets and sewers in the state of Missouri for many, many years," he said. "I've never even looked at that as violation of the Hancock Amendment."

Fischer said had the circuit court decision been allowed to stand it would have "really set things back in Missouri" in terms of street and sewer improvements.

"Where this would really handicap us is in areas that were subdivided prior to subdivision regulations that were adopted in 1976," he said. "Before then, a subdivision wasn't required to have paved streets."

Fischer said the city's three-inch asphalt overlay program, used to pave older, gravel streets, is completely tax-billed. Also, many recent commercial developments petitioned for special assessments to fund street and sewer service.

Fischer said the city's policy of assessing construction costs to property owners is the fairest way to improve many streets. He said he was unaware of any past opposition to the policy in Cape Girardeau.

"Ninety percent of the street improvements we do are done with the consensus of a majority of property owners that abut the improvement," the city manager said. "Normally, if there's not majority consent, the project just isn't done.

Fischer said: "In a way, that actually is voting. It's not a formal ballot, but it's done through petition of the property owners. That's really a vote of the people."

Tom K. O'Loughlin II, the Cape Girardeau attorney who represented Zahner in the Perryville suit, said forcing cities to seek voter approval of special assessments would not impede city development.

"The cities played that up that it was going to keep them from paving streets and making improvements," O'Loughlin said. "But all they would have had to do is ask voters if they wanted an increase.

"They hold municipal and other elections once a year, and, once they had it approved, they could continue their program. It wasn't the impediment to development that it was painted to be by the cities."

O'Loughlin said municipal governments have used the tax-bill policy to usurp Hancock Amendment restrictions.

"What they really want to do is get as much as they can from the citizens without a vote," he said. "It's just a way around what the citizens have voted for in the Hancock Amendment.

"If an error is to be made, it ought to be made in favor of citizens, not in favor of government. I think most government officials have forgotten their 9th grade civics lessons, that the government is for the people and by the people."

Fischer compared the special assessments with user fees used by other city departments to fund new facilities and other improvements.

"It's a way for these people to get streets where they can pay them off over a 10-year period at a reduced rate of interest," he said. "It's a positive thing.

"I think it's a very fair way to provide services to people knowing that city government can't pay 100 percent for everything."

Wells said the Perryville case was an example of a general lack of clarity in parts of the Hancock Amendment. He said other cases involving the law are pending in Missouri courts.

"The whole area of litigation on the Hancock Amendment is very muddled at the present time," he said. "I could understand how the circuit judge would rule the way he did given the lack of clarity of some part of the law.

"But we were pleased it was overturned. It's an area of law that's still in the development stage."

Tuesday's Missouri Supreme Court decision said that charges assessed by Perryville didn't constitute a tax because they were "generally understood to be related either to a specific property or a specific purpose."

Also, the ruling stated that the street improvements were recognized as a "special benefit" to the abutting property owners, a point Zahner had contested.