Hector v. City of Fargo, 815 N.W.2d 240

Improvement District 5314 was created in Aug. 2007 to upgrade south Fargo infrastructure along 52nd Ave S and I-29, including bridges, pavement, storm sewers, water mains, signals, street lighting, bike trails, and incidental work.
The City Commission adopted a resolution of necessity; it stated the entire improvement cost would be special-assessed pro rata to benefits and phased funding sources were identified.
An engineer’s report estimated a $54.8 million project cost with funding from street sales tax, water utility funding, federal funds, special assessments, and misc. sources.
The project split into three phases with DOT involvement in Phases 1 and 2; the DOT would participate financially under a separate agreement.
Hector owns four parcels in the district and received notices of proposed assessments totaling about $6.86 million, largely for frontage roads; a ten-year deferral was negotiated for his frontage-road assessment.
Hector objected in 2009; the Special Assessment Commission considered objections, then approved the assessment list; the City Commission affirmed, and Hector sought district court review, which affirmed the City Commission.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Total cost calculation exceeded authorized costs	Hector argues costs beyond the resolution of necessity were included	City says costs, including frontage roads and related items, are authorized	Total cost properly includes allowed items; not arbitrary or unreasonable
Final costs may exceed the resolution’s estimate	Hector claims assessments limited to the resolution’s final estimate	Statutes permit final cost and assessments to exceed initial estimates	Final costs/assets may exceed the engineer’s/necessity estimates; within statutory framework
Use of Infrastructure Funding Policy for benefit calculation	Hector asserts policy-driven caps misstate benefits	Policy guides fair, uniform assessments and was used as a base	Policy-based method not arbitrary; complies with law and case law standards
Notice and review procedures complied with	Hector contends improper notices and hearings	Notice, hearings, and city audits complied with statutory requirements	Notice and review procedures complied with statute; proper opportunity to be heard

Bateman v. City of Grand Forks, 747 N.W.2d 117 (ND 2008) (limits and methods for apportioning benefits; discretion in methods)
Cloverdale Foods Co. v. City of Mandan, 364 N.W.2d 56 (ND 1985) (benefit determination and proportional assessment principles)
Serenko v. City of Wilton, 593 N.W.2d 368 (ND 1999) (recognizes flexibility in apportionment methods with a nexus to benefits)
Reed v. City of Langdon, 54 N.W.2d 148 (ND 1952) (assessment cannot exceed actual cost; historical principle)
Go Comm. ex rel. Hale v. City of Minot, 701 N.W.2d 865 (ND 2005) (statutory interpretation in cost and assessment statutes)
Amerada Hess Corp. v. State ex rel. Tax Comm’r, 704 N.W.2d 8 (ND 2005) (statutory interpretation and cost considerations in taxation)