Can a watershed district acquire grass buffer strip along a drainage ditch by relating its action back to the original proceeding by the county commission to acquire and compensate for the ditch?

Zimmermann v. Sauk River Watershed, No. A15-0782, 2016 WL 596346 (Minn. Ct. App. May 17, 2016)

Court held that Minn. Stat. § 103E.21, subd. 6 cannot be used by watershed district to acquire a grass buffer strip along a drainage ditch by relating its action back to original proceeding by county commission to acquire and compensate for ditch under 103D. County commission established ditch in 1988 but did not acquire buffer. While making repairs, watershed district realized it had no title to buffer around ditch. Watershed district used 103E.21, subd. 6 to acquire land. Court ruled districts must go back and use procedures of 103D to add buffer to older ditches.

Can a watershed district’s redetermination of benefits and damages be limited to the drainage system’s originally assessed area?

In re Appeal from Final Order of Bd. of Managers of Bois de Sioux Watershed District, 889 N.W.2d 575 (Minn. Ct. App. 2016)

Court held Bois de Sioux Watershed District's redetermination of benefits and damages under Minn. Stat. § 103E.351 may not be limited to the drainage system’s originally assessed area, and as such is void. (at 582–83). Court interpreted the statute to require examination of benefits to all property within the watershed on a redetermination just as for an original determination. Court determined meaning from interplay of language in 103E.311 and .315. (at 581–82).

Court held costs and expenses of conducting the redetermination can be assessed against the specific drainage system’s account under 103E.651, subd. 2. Court interpreted the statute at 103D.905, subd.3 and 103D.011, subd. 21 to preclude using watershed district’s general fund for redetermination costs. Even though the redetermination is void, the watershed district may still charge the costs of conducting the failed redetermination to the JD 14 ditch system beneficiaries.

May a property be benefited by a ditch system without a direct discharge or physical connection to the system?

In re Appeal by the Art and DeWayne Nohl Family Partnership (Minn. App. C0-00-1296) (May 1, 2001) (unpublished).

The landowner partnership and family members appealed a District Court judgment affirming a decision of the authority for Joint County Ditch No. 9, Swift, Stevens and Pope Counties, that their parcels are benefited by the ditch, even though the parcels sit high in the drainage area and do not drain to the ditch through any physical conveyance. The Court of Appeals ruled that a property may be benefited by a ditch system even if there is no physical connection to the system. It found that the landowners’ property improvements had increased the rate and volume of runoff, and that without the ditch, these changes would have damaged downstream property owners.

May a ditch authority accept a private wastewater discharge into a ditch system, and may it charge a volume-based fee to do so?

Agra Resources Coop v. Freeborn County Board of Commissioners, 682 N.W.2d 681 (Minn. App. 2004).

Agra Resources Coop, a producer of ethanol from corn, challenged the power of Freeborn County, as the ditch authority, to charge a per-gallon fee for the right to discharge non-contact cooling water through a private drain tile to a public ditch. The county responded by questioning its own authority to accept private wastewater into the county ditch system. The Court of Appeals found precedent to support acceptance of private wastewater into a public ditch system, while noting the County’s responsibility to consider possible environmental impacts. The Court also found that a ditch authority has the implied power to impose a volume-based outlet fee if it can show that the fee corresponds to actual benefits, and upheld the County’s fee determination as carefully done.

May a ditch authority award a construction contract for an improvement while a benefits and damages appeal is pending?

Pestka v. County of Blue Earth, 654 N.W.2d 153 (Minn. App. 2002).

When a jury finding reduced their benefits and increased their damages from a proposed ditch improvement, with the result that overall benefits no longer exceeded costs and damages, landowners petitioned the Blue Earth County Board of Commissioners, acting as the ditch authority, to dismiss the improvement petition. The County Board, however, accepted an amendment to the viewers’ report that corrected a previous error in capitalizing benefit and increased the overall benefit to an extent that allowed the improvement to proceed legally. The Court of Appeals rejected the landowners’ argument that the County Board lacked the authority to accept the amended viewers’ report. The Court also ruled that under the drainage statutes, while a construction contract may not be awarded while an order to proceed with an improvement is under appeal, it may be awarded if a pending appeal concerns only the amount of benefits or damages.

May a landowner challenge the benefits and damages assessment of another landowner, even if he is not challenging his own?

In re. Petition for Improvement of County Ditch 86, Branch 1, County of Blue Earth, Minnesota, 625 N.W.2d 813 (Minn. 2001).

Under the drainage statutes, landowners benefited by a ditch system are given broad rights to participate in drainage proceedings and to challenge ditch authority decisions for a variety of reasons. A decision to proceed with an improvement and a decision concerning the benefits and damages of others each may affect the assessment against any benefited landowner for both project cost and future maintenance. Accordingly, under Minnesota Statutes §103E.091, a benefited landowner may challenge the benefits or damages assessed to any other benefited landowner, whether or not he is challenging his own as well.

Did the Board of Water and Soil resources act within its statutory authority in adopting a rule that does not allow an exemption from the state's wetland replacement requirement for ditch maintenance, if the ditch work will cause a loss of wetlands?

Hentges v. Minnesota Board of Water and Soil Resources et al., 638 N.W.2d 441 (Minn. App. 2002).

Yes. Landowners adjacent to Anoka County Ditch 53-62 sought to lower the elevation of a culvert in the ditch at I-35W, complaining that natural forces had caused the culvert to rise, and in turn caused water from the ditch to overflow and flood their lands. The culvert was installed in the 1950s, and the ditch work and culvert relocation proposed by the landowners would partially drain nearby wetlands that have existed for over 25 years.

The state Wetland Conservation Act requires that partially drained wetlands be replaced, unless an exemption from this requirement applies, as determined by the Local Government Unit (LGU). Here, the LGU is the Rice Creek Watershed District, which rejected the landowners contention that the proposed work was simply “ditch maintenance,” exempted by federal law. The landowners appealed to the Board of Water and Soil Resources (BWSR), which affirmed the watershed district’s decision.

On appeal, the Minnesota Court of Appeals held that BWSR acted within its statutory authority in promulgating a rule that expressly excludes the exemption for federal approvals for projects “with the purpose of converting a wetland to a nonwetland, either immediately or gradually, . . . or partly draining it. . . .” Minn. R. 8420.0122, subp. 3A (Supp. II 2000). The Court found that the rule comports with the legislative intent to achieve “no net loss” of wetlands, and that the interpretation urged by the landowners was “clearly at odds with both the express language of the statutes and the state’s policy.”

The Court further held that BWSR properly applied the rule to ditch maintenance; that BWSR did not deny due process or equal protection to the landowners, nor take action resulting in an unjust taking of their property; and that BWSR did not err in allowing civic and environmental groups to participate in the administrative appeal from the watershed district decision.

Is a ditch repair that will drain a public waters wetland exempt from department of natural resources approval and wetland replacement?

Minnesota Center for Environmental Advocacy v. Big Stone County, 2002 Minn. App. LEXIS 76 (Jan. 15, 2002).

No. The Big Stone County Board of Commissioners, as ditch authority, approved a repair involving sediment removal from a county ditch downstream of a Type 5 public waters wetland. There was no dispute that the repair would transform the wetland into a Type 2 wetland, an inland meadow typically without standing water that does not meet the definition of a public waters wetland. After obtaining an Environmental Assessment Worksheet, the Board determined that the repair did not have the potential for a significant environmental impact requiring preparation of an Environmental Impact Statement (EIS) and ordered the work.

Respondents Minnesota Center for Environmental Advocacy, the Coalition for a Clean Minnesota River, and the New Ulm Sportfishermen sought a declaratory judgment that the repair required an EIS and, further, that it required: (a) DNR permission under Minnesota Statutes section 103E.011; (b) a DNR public waters work permit under Minnesota Statutes section 103G.245; and (c) an approved wetland replacement plan under Minnesota Statutes section 103G.222. The District Court for Big Stone County issued a ruling largely favoring Respondents, followed by an appeal and a cross-appeal.

The Court of Appeals noted the section 103G.245 exception from the public waters work permit requirement for ditch repair "undertaken according to chapter ... 103E." Section 103E.011, subdivision 3, requires DNR approval before any ditch work that would change the level or drain any part of a public water. Observing that the County Board had not obtained DNR approval, the Court ruled that the criterion for the section 103G.245 exception had not been met, and that the County Board must obtain either DNR approval under section 103E.011 or a public waters work permit under 103G.245.

The Court also ruled that an EIS was required. It found that Minnesota Rules 4410.4600, subpart 17, exempting certain ditch repairs from EIS preparation, does not supersede the mandatory EIS requirement of Minnesota Rules 4410.4400, subpart 20, for any action "that will eliminate a public water or protected wetland."

Finally, the Court reviewed the County Board's claim that the proposed sediment removal does not require a wetland replacement plan because it is activity "exempted from federal regulation under [33 U.S.C.] section 1344(f)." Minn. Stat. §103G.2241, subd. 3(1). The Court rejected this claim, noting that the section 1344(f) exemption explicitly applies only to the deposit of dredged or fill material, and not to wetland draining.

May ditch authorities compel the Department of Natural Resources to pay assessments on "con-con" lands?

Marshall County, et al. v. State of Minnesota and its Department of Natural Resources, (Minn. Ct. App.) (Docket No. CX-01-716, December 4, 2001).

No. In this action, the Counties of Marshall, Beltrami and Roseau sought a ruling that the Minnesota Department of Natural Resources (“DNR”) is responsible to pay ditch assessments on consolidated conservation ("con-con") lands.

Early last century, northern Minnesota was the site of a massive project to drain marginal agricultural lands. Much of the drained land nonetheless proved unable to support agriculture. Widespread farm default on ditch liens threatened the financial viability of the affected counties. In 1929, the State took title to the land, known as con-con land, in return for assistance to the counties. The DNR now manages some 1.5 million acres of con-con land for forestry, wildlife, flood control and similar purposes.

For some years, the State has disputed assessments on con-con lands made by respondent counties as ditch authorities, on the basis that the assessments have not corresponded to benefits conferred. In 1992, the State advised the counties that it would not pay pending assessments until a joint review of benefits was conducted. In 1993, it ceased paying assessments on con-con lands for which redetermination of benefits had not taken place. The three counties brought this action in Marshall County District Court to force the DNR to pay pending assessment. Their motion for summary judgment was granted; the Court of Appeals reversed.

The issue is governed by Minnesota Statutes section 84A.55, subdivision 9, which states:

If the [DNR] commissioner finds after investigation that a project for the construction, repair, or improvement of a public ditch or ditch system undertaken by a county or other public agency as otherwise provided by law will benefits the lands for th[e] purposes [for which the lands were established], the commissioner may cooperate in the project ... on any conditions the commissioner determines. The commissioner shall authorize the imposition of assessments for the projects on the lands in any amounts the commissioner determines.

Respondents cited Minnesota Statutes section 103E.025, subdivision 3, which authorizes ditch authorities to assess state lands used for conservation. The Court of Appeals found that section 84A.55, subdivision 9, "reveals the intent to grant the commissioner almost total discretion in deciding how much should be paid for assessments on con-con lands." It concluded that section 84A.55, subdivision 9, does not conflict with section 103E.025, subdivision 3, but simply is a more specific statute pertaining to the con-con lands.

Respondents also pointed to section 84A.55, subdivision 12, which prohibits the commissioner from taking an action under section 84A.55 "that will interfere with the operation of ditches or drainage systems existing in [the con-con lands]." The court read subdivision 12 as prohibiting only a physical alteration of a drainage system; it would not construe a commissioner’s decision not to pay an assessment as constituting interference with operation of a drainage system as contemplated by subdivision 12.

Respondent counties also argued that the commissioner's decision was arbitrary because the law directed the DNR to establish, by January 1, 1986, criteria to determine benefits to state-owned lands, yet the DNR had failed to do so. The court rejected this argument, adopting the principle that an agency's failure to act within a statutory timeframe does not bar subsequent action, unless the statute specifically directs that result.

May a landowner obtain ditch repair in the district court without first exhausting administrative remedies through the drainage authority?

Zaluckyj v. Rice Creek Watershed District, et al., 639 N.W.2d 70 (Minn. Ct. App. 2002).

No. Washington County Judicial Ditch No. 2 is a 13-mile public drainage system established in 1909. The landowner benefits at that time were determined to be $34,053. They have not since been re-determined.

In November 1998, the City of Hugo, who along with other appellants owned land along the ditch subject to flooding, petitioned the Rice Creek Watershed District for an obstruction hearing under Minnesota Statutes § 103E.075. The Watershed District denied the petition, determining that the ditch was in general disrepair and that lowering the culverts would not alone improve hydraulic capacity. The City did not appeal the denial, nor did it petition for repair under Minnesota Statutes § 103E.715. Instead, it and other abutting landowners filed in district court for declaratory judgment and petitioned for mandamus. It sought an order for removal of the obstructions and repair of the ditch or, in the alternative, for the institution of inverse condemnation proceedings. The Court of Appeals affirmed the district court ruling that appellants had failed to exhaust their administrative remedies.

First, the Court found that whether administrative remedies had been exhausted is a legal question and therefore not one for which appellants could demand a jury. The Court then noted the "specialized administrative process" established in Chapter 103E for addressing ditch problems and recited the traditional bases for the exhaustion of remedies requirement, including vindicating agency expertise, promoting judicial economy and producing a record for proper judicial review. The Court also rejected appellants' claim that applying for administrative relief would have been futile. Appellants argued that because ditch benefits had not been re-determined since 1909, the cost of repair necessarily would exceed the benefits and thus preclude the Watershed District from granting a repair petition.

The Court observed that Minnesota Statutes § 103E.715, subd. 4(a), does not specify that the original benefits must exceed the repair cost if a watershed district otherwise determines that the repair is in the interest of affected property owners. The Court also rejected appellants' claim that the record demonstrated the Watershed District's predisposition against issuing the approvals necessary for the repair.

How may a drainage authority determine and assess benefits and costs of a project that combines ditch repair and improvement?

In the Matter of the Petition for the Improvement of Murray County Ditch No. 34, 1999 WL 486865 (Minn. App. 1999 CX-98-2194)(Unpublished)

Respondents, local landowners, sought to restore and improve Murray County Ditch No. 34 by replacing the main tile line with an open ditch, rather than merely repairing it. The Murray County Board of Commissioners, acting as the drainage authority, compared the benefits and costs of the proposed improvements with those of repairing the ditch alone. It determined the cost of the entire project to be $593,565-$290,279 to simply repair the system, and an additional $303,286 to improve the ditch. It also determined that the improved ditch would provide benefits of $508,766 beyond repair benefits of $458,584. The $290,279 cost to repair was compared against the benefits of $458,584, the additional cost of $303,286 for improving the system was compared to the additional benefits of $508,766, and the entire project was approved.

Appellants, certain landowners to be assessed for the cost of the improvement, appealed the assessment to the trial court, arguing that the "project cost" of $593,565 should be compared with the improvement benefits of $508,766. The trial court affirmed the decision of the drainage authority, and the Court of Appeals affirmed.

Minn. Stat. ¤ 103E.215, subd. 6, provides that the "repair portion" of the improvement shall be "assessed against all property benefited by the entire drainage system," and "the balance of the cost of the improvement . . . in addition to the repair assessment" shall be assessed against the property "benefited by the improvement." This process is only applicable when the existing drainage system needs repair and "the petition for the improvement is for a separable part only of the existing drainage system." Id. The court affirmed the Board's finding that the improvement was for a separable part of the system because the improvement involved reconstruction of defined sections of the main line, and because the improvement affected parcels of land differently than would a simple repair.

Appellants also argued that the determination of additional benefits of $458,584 were not benefits of the total project, because Minn. Stat. ¤ 103E.705, subd. 1 (1998) requires the drainage authority to keep the present system functioning. The court found that this obligation did not diminish the benefits that would result from the improvement.

May a landowner challenge the benefit and damages assessment with respect to other properties when he is not challenging the assessment with respect to his own?

In the Matter of the Petition for Improvement of County Ditch No. 86, Branch 1, County of Blue Earth v. Phillips, 614 N.W.2d 756 (Minn. App. 2000).

Under Minnesota Statutes § 103E.091, several landowners challenged benefit and damage determinations by the Blue Earth County Board of Commissioners ("Board") in its order for improvement of two portions of Branch 1, Ditch No. 86. Following a jury trial, but before entry of judgment, the parties executed a settlement in which the jury's findings of benefits and damages were accepted by each landowner. The stipulation explicitly reserved the landowners' right to seek dismissal of the improvement petition in accordance with § 103E.341 if the final project cost, including damages, were to exceed the final benefits determination. The lowest construction bid still resulted in the cost of the improvement exceeding its benefits. On a request from the petitioners for the improvement, the Board directed that errors in the Viewers' Report be corrected. On correction, the benefits were found to exceed costs.

The landowners filed a second appeal under § 103E.091, challenging the increase in benefits assigned to a number of properties under the Board's amended order. They owned none of these parcels. The trial court dismissed the appeal, ruling that it was precluded by the earlier settlement. The Court of Appeals found that the settlement explicitly reserved the right to bring the appeal, but affirmed the district court dismissal on the basis of the landowners' lack of standing.

Minnesota Statutes § 103E.091, subdivision 2(a), states that a "person who appeals the amount of benefits or damages may include benefits and damages affecting properties not owned by the appellant." From use of the term "may include," rather than "may appeal," the Court concluded that a landowner could appeal benefit and damage determinations for property he did not own only in conjunction with an appeal as to his own property. The Court found, accordingly, that the statute provided no basis for appellants' standing. Standing, then, was to be determined by the traditional requirement of "injury in fact." The Court found that the Board's order would have no impact on appellants' benefit assessment, and therefore that there was no injury in fact.

Writing in dissent, Judge Davies would have found injury in fact on the basis that: (a) an underassessment of others would lead to appellants' bearing a greater proportion of project costs; and (b) if the improvement were constructed, appellants would be assessed despite their opposition to the project.

How may a drainage authority determine and assess benefits and costs of a project that combines ditch repair and improvement?

Stensrud v. Lyon County Ditch No. 7, 609 N.W.2d 286 (Minn. App. 2000), rev. den. (2000).

Lyon County Ditch No. 7 drains lands in Lyon County and outlets into Yellow Medicine/Lyon County Judicial Ditch No. 10. After the Lyon County Board of Commissioners approved an improvement to County Ditch 7, it brought a declaratory judgment action for a determination that a permit from the Ditch 10 drainage authority was not required for the increased discharge to Ditch 10 that would follow from the improvement. Minnesota Statutes § 103E.401, subdivision 2, prohibits "a public or private drainage system that drains property not assessed for benefits" from using an established drainage system as an outlet without obtaining approval from the authority for the downstream system. The Ditch 10 authority counterclaimed, seeking an injunction to restrict flows from Ditch 7 until a permit was applied for. The Court of Appeals read the language of § 103E.401 to require approval only when new land was to drain to the outlet, and not simply when the flow from existing lands was to increase. On the basis of the trial court's finding that no additional lands would be drained by the improvement, the Court of Appeals reversed the district court ruling that approval was required.