COMMISSION ON URBAN PLANNING, GROWTH MANAGEMENT OF CITIES, AND PROTECTION OF FARMLAND

MINUTES

November 3, 1997 - Third Meeting of 1997 Interim

MEMBERS PRESENT

MEETING IN BRIEF

Minutes prepared by Tim McDermott, Legal Counsel
Organizational staffing by Doug Adkisson, Legal Counsel

  1. Procedural Business.
  2. Property Tax Overview.
  3. County Inventories.
  4. Annexation.
  5. Highway Planning and Land Use.
  6. Private Property Rights and Takings Issues.
  7. Perspectives by Cities.
  8. Commission Discussion.
  9. Written Materials Filed With the Legislative Service Bureau.

COMMITTEE BUSINESS

1. Procedural Business.
Call to Order.Co-Chairperson Representative Teig called the meeting of the Commission on Urban Planning, Growth Management of Cities, and Protection of Farmland to order at 10:10 a.m., Monday, November 3, 1997, in Room 116, State Capitol.
Adjournment. The Commission adjourned at 4:00 p.m.
2. Property Tax Overview.
Mr. Dick Stradley, Iowa Department of Revenue and Finance, presented to the Commission an overview of the Iowa property tax, notably, classification and valuation of property for purposes of taxation. Mr. Stradley explained that property is classified for taxation according to the primary use of the property. He stressed that property is not classified or valued based upon the owner or the owner's income or status. Mr. Stradley stated that the three primary classes of property are agricultural, residential, and commercial. Agricultural real estate, he said, is all tracts of land and the improvements and structures located on them which are in good faith used primarily for agricultural purposes. A parcel of land does not need to exceed 10 acres in order to be classified as agricultural property. Residential real estate includes all land and buildings which are primarily used or intended for human habitation, including buildings located on agricultural land. Commercial real estate, he continued, includes all land and buildings which are primarily assessed as a place of business where goods, wares, or services are stored or offered for sale.
Mr. Stradley stated that all property is assessed at 100 percent of market value, except for agricultural property which is valued based on a five-year productivity formula developed on a county-by-county basis. Under the current productivity formula, agricultural property is being valued at about 42 percent of market value, said Mr. Stradley. In the 1997 assessment year, the combined valuation of property classified as agricultural (not including agricultural dwellings), residential, and commercial accounted for over 82 percent of the statewide total property valuation. Agricultural property alone accounts for over 19 percent of the statewide total property valuation. Mr. Stradley stated that in the 1987 assessment year, there were 33,124,925 taxable agricultural acres in the state. In the 1997 assessment year, there were 32,827,205 taxable agricultural acres in the state.
3. County Inventories.
Mr. James Gulliford, Director of the Soil Conservation Division of the Iowa Department of Agriculture and Land Stewardship, discussed the process by which counties prepared land use inventories as required by Iowa Code chapter 352. As background information, Mr. Gulliford informed the Commission that the Land Use Act of 1982 required the preparation of land use inventories to be prepared by each county. The legislation did not contain provision for state oversight of the preparation of these inventories, which, he said, was a recognition by the General Assembly, at that time, that land use issues and policymaking belong at the local level. Mr. Gulliford stated that, when the Land Use Act was enacted, the General Assembly was primarily concerned about the conversion of agricultural land to other uses, protection of natural and historic sites, and the rate of wind and water erosion.
The legislation created a land use commission whose membership included a representative from the county agricultural extension office, the soil conservation district commission in that county, and city and county government. After a commission completed the land use inventories, it was to hold a public hearing on its findings, and then submit either a land use plan or the land use inventory and evaluative findings to the county board of supervisors. Mr. Gulliford noted that, in 1983, the state appropriated $99,000 to reimburse each county $1,000 upon completion of a land use inventory for the county. To assist the county land use commissions, the Department of Agriculture and Land Stewardship developed a guidebook and methodology instructing the commissions how to gather data showing historical change in land use. The guidebook suggested a comparison of aerial photos of the county taken in the 1960s and the 1980s and instructed the commissions to differentiate between high value and low value agricultural land. In response to a question, Mr. Gulliford stated that if counties were to prepare another land use inventory similar to those prepared in the early 1980s, it would cost approximately $5,000 per county.
4. Annexation.
Mr. Steve McCann, City Development Board Administrator, accompanied by Ms. Christie Scase, Iowa Attorney General's Office, discussed the Iowa annexation law and the role of the City Development Board in annexations. According to Mr. McCann, there are three types of annexations allowed by law that are reviewed by the City Development Board: (1) urbanized area voluntary annexation; (2) "80/20" voluntary annexation; and (3) involuntary annexation.
In an urbanized area voluntary annexation, landowners in an area within two miles of a city may petition the city for annexation to the city. Such a petition may be adopted, and annexation completed after a review of technical requirements by the City Development Board upon the simple majority vote of the city council.
In an "80/20" voluntary annexation, up to 20 percent of the total area to be annexed may be included by the city without the owners' consent. The law requires that a public hearing be held on the annexation petition and that the petition receive approval from four-fifths of the council to take effect. An involuntary annexation petition requires the approval of a simple majority of the city council. However, approval of an involuntary petition is barred by law if the annexation of the territory results in the creation of an island of land surrounded by the city that has not been annexed, if the territory does not adjoin the annexing city, if the city is unable to provide substantial municipal services and benefits not previously enjoyed by the citizens in the annexed area, or if it is apparent that the property is being annexed solely to increase property tax revenues to the city. After the city council approves an involuntary annexation petition, the proposition to annex is voted on by both the citizens of the annexing city and the citizens of the area proposed to be annexed.
Mr. McCann stated that, in those instances where both a voluntary and an involuntary annexation petition have been filed for common territory, the voluntary annexation petition is approved unless the City Development Board determines that the petition was filed in bad faith, or that the application is contrary to the best interests of the citizens of the urbanized area, or that the applicant cannot within a reasonable time meet its obligations to provide sufficient services to the territory to be annexed.
Possible Changes. Mr. McCann was asked what changes he would recommend to the annexation law to protect farmland and to redevelop existing stock of developed property. Mr. McCann stated that cities wishing to annex already have to provide information on population density in the city and the number of acres of developable land in the city. However, the law does not allow the City Development Board to give greater weight to these factors than it does to others, he said. Ms. Scase stated that she is concerned that voluntary annexations that are outside the two-mile limit (urbanized area) of a city other than the annexing city are not subject to the scrutiny of the City Development Board or of any other agency.
5. Highway Planning and Land Use.
Mr. Jim Bernau, a farmer who resides near Charles City, discussed his experience with efforts by the Department of Transportation (DOT) to confiscate part of his land in order to construct the Avenue of the Saints Highway. He expressed concern that the Department is constructing a diagonal highway through his farm and complained about the effects of large highway systems upon downtown areas in cities such as Charles City. Mr. Bernau's principal concern involved the Department's procedure in planning and designing highways, including the process of notifying landowners, allowing the public an opportunity to comment on proposed plans, the failure of the Department to adequately weigh alternatives, and the failure of the Department to justify its decisions. Mr. Bernau explained that when DOT planned to divide his farm, the agency did not provide him with adequate notice of the agency's action or fully consider alternative approaches.
Mr. Dennis Tice, Director of the Planning and Programming Division of the Iowa Department of Transportation, discussed the Department's planning policies. Mr. Tice provided an overview of "themes" that guide planning policies, including balancing urban and rural concerns, economic development and quality of life, equity and efficiency, and preservation and development. Mr. Tice discussed the Department's long-range transportation plan (Iowa in Motion) and land use impacts on aviation, bicycle, highway, and transit travel. He noted that in analyzing individual projects, the Department conducts location studies and environmental assessments.
Members of the Commission discussed Iowa Code section 306.9, which provides in part the following:
It is the policy of the state of Iowa that relocation of primary highways through cultivated land shall be avoided to the maximum extent possible. When the volume of traffic for which the road is designed or other conditions, including designation as part of the network of commercial and industrial highways, require relocation, diagonal routes shall be avoided if feasible and prudent alternatives consistent with efficient movement of traffic exist.
Mr. Tice noted that the Department considers the statute when determining whether to construct a diagonal highway, and that the decision involves a careful balancing process. He noted that it is often impossible to design a highway that does not affect some acres of prime agricultural land.
6. Private Property Rights and Takings Issues.
Ms. Elizabeth Osenbaugh, Solicitor General, and Mr. Mike Smith, Assistant Attorney General, Iowa Attorney General's Office, discussed private property rights and takings issues. Ms. Osenbaugh and Mr. Smith discussed constitutional limitations upon the government seeking to confiscate land or regulating land to an excessive degree. They noted that when a "taking" is triggered, the government must pay just compensation to the landowner. It was noted that the state may confiscate land using its power of eminent domain, but not all agencies rely upon this authority. Mr. Smith noted that the Department of Natural Resources has not exercised eminent domain authority for almost 20 years. Ms. Osenbaugh also noted that regulation may become so complete as to become a taking. It was noted that zoning statutes have been long upheld as a constitutional exercise of state powers, as long as the zoning is based on reasonableness. Mr. Smith discussed the trend by states to acquire development rights and to acquire conservation easements, noting that drafting such easements is technically challenging.
7. Perspectives by Cities.
Mr. Dean Schade, representing the Iowa League of Cities, noted that cities have an interest in the orderly growth of boundaries. According to Mr. Schade, cities struggle to find a balance between population density that accommodates orderly growth and provides services at reasonable rates. He shared three assumptions: (1) that the state's economy is growing and diversifying due to economic development efforts, which has resulted in population growth; (2) a good part of growth in the state has occurred in urbanized areas; and (3) people need to have a place to live and they naturally reside in places that they want to live.
Mr. Jim Halvorson, Planning Director of the City of Cedar Rapids, appeared on behalf of the Iowa League of Cities. He made a number of suggestions which may be summarized as follows:
Mr. Halvorson stated that growth is inevitable, and that reactionary policies that do not account for economic diversity could diminish positive results that have helped Iowa's economy expand.
8. Commission Discussion.
The members of the Commission discussed a number of issues regarding annexation and planning requirements. It was noted that there needs to be a dialogue between cities and counties. It was suggested that there needs to be a change in the way planning occurs. Members also expressed a desire to request that the Department of Transportation follow up on information that it provided to the Commission, especially in light of Mr. Bernau's testimony.
9. Materials Distributed and Filed With the Legislative Service Bureau.
a. Iowa Property Tax Overview, Department of Revenue and Finance.
b. Property Tax Classification (Comparison of Assessed Values), Department of Revenue and Finance.
c. National Resources Inventory Briefing, United States Department of Agriculture Natural Resources Conservation Service.
d. Overview of Annexation, Mr. Steve McCann, City Development Board Administrator, Department of Economic Development.
e. Transportation and Land Use, Department of Transportation.
f. Iowa in Motion, State Transportation Plan Executive Summary, Department of Transportation.
g. Takings L*A*W in Plain English, Christopher J. Duerken and Richard J. Roddewig, as furnished by the Attorney General's Office.
h. Summary of Remarks, Jim Halverson, City of Cedar Rapids, Department of Development.
i. Testimony, Mr. Dean Schade, Iowa League of Cities.
j. Community Growth Management, Introduction to Growth Management, Oregon State University Extension Service.
k. Community Growth Management, Performance Zoning, Oregon State University Extension Service.
l. Community Growth Management, Influencing the Sequence of Development, Oregon State University Extension Service.
m. Community Growth Management, Six Case Examples, Oregon State University Extension Service.
n. Community Growth Management, Influencing the Rate of Population Growth, Oregon State University Extension Service.
o. Excerpt from the Journal of Urban Planning and Development, Volume 120, Number 4.
p. Historical Overview of State and Regional Planning in Virginia, Office of Policy Analysis and Research Department of Housing and Community Development.
q. Agricultural Trends, Michigan Society of Planning Officials.
r. Copy of Iowa Code Section 306.9.
s. Memorandum to the Commission: County Inventory Update, Doug Adkisson, Legislative Service Bureau.
t. Letter to Commission Members, Representative Mona Martin.
u. Minutes from the October 6 meeting.

OTHER INFORMATION FOR THIS COMMITTEE:

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