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For the third time in roughly as many years, the city of Urbandale is being confronted with the possibility of a lawsuit over special assessments for street projects.

One of those lawsuits resulted in a $31,000 tax savings for one property owner but no change in the way the city calculates the special levies, a key element in the legal challenges. Another lawsuit was settled out of court.

After a public hearing Jan. 15 in which some property owners threatened to sue the city over special assessments for the widening of 156th Street on the city’s west side, council members agreed to discuss potential changes to its assessment policy during a planning session scheduled for Feb. 8. The council unanimously approved the special levies.

We will sue you and we will crush you.
– Gregory Nepstad, 156th Street resident irked by property tax assessment

“They will look at it,” said Dave McKay, director of the city’s engineering and public works department. “I don’t think there’s any promise that they will make any changes.”

McKay frequently provides property owners with their first glance at preliminary assessment figures. Those numbers – ranging from $200 to $140,000 in the 156th Street project – can be a shock.

“Any time money is involved and it’s your home property, it’s very personal,” he said.

At the Jan. 15 meeting, council members heard from 17 property owners and lawyer Joseph Happe, who sued the city in 2005 over a $37,000 special assessment on his residence at 3345 142nd St. The Iowa Court of Appeals reduced that assessment to $6,119, essentially ruling that Happe didn’t reap a $37,000 benefit from the widening of his street.

Happe will represent 156th Street property owners who decide to follow through on their threat to sue the city. One of those is Gregory Nepstad of 3512 156th St., who has received a preliminary assessment of approximately $45,000 on his 6.5-acre property.

“We will sue you and we will crush you,” Nepstad told the council.

Nepstad later said that he does not question the need for an assessment to widen a 1.5-mile stretch of 156th Street to four lanes and add sidewalks and a bike trail. The project affects 228 properties, with fees on 139 prepaid by developers. Assessments have ranged from about $200 to more than $140,000, and it was the discrepancy that irked many landowners, particularly owners such as Nepstad who have large-lot acreages. Total assessments for the project are $1.9 million.

“We really thought the city would come out with the same assessment for everybody,” Nepstad said. “If this were going on in Johnston right now, our assessment would be nothing.”

That’s because the Johnston City Council suspended special assessments in 2005 after property owners along separate street-widening projects complained they were paying more than their fair share for projects that benefited the entire city.

However, the following budget year, the city increased its tax levy to 56 cents per $1,000 of assessed value, in part to help pay the $12.5 million bill for the road projects, said Community Development Director David Wilwerding. A levy paying the total cost of the project would have amounted to 90 cents per $1,000, he said.

Nepstad said he is optimistic that council members heeded his and other property owners’ concerns and that the city would take another look at the assessments, which are not final until the project is completed. Preliminary assessments can be lowered if bids come in below projections.

“I think we actually did make a dent in their consciences,” Nepstad said.

Also as part of the project, the City Council approved an incentive package worth a maximum $150,000 to contractors if the project, slated to begin this spring and end by December 5, is completed ahead of schedule. Contractors would receive a bonus of $1,500 for every day they beat a series of target dates; they would pay the same amount in penalties for every day they miss those dates.