May a watershed district be expanded to include territory within an existing joint powers watershed management organization?

In the Matter of the Enlargement and Increasing the Number of Managers of the Brown's Creek Watershed District in Washington County, 633 N.W.2d 76 (Minn. Ct. App. 2001).

This case arose pursuant to a Washington County review of its water governance framework and a determination to reorganize the watershed districts and joint-powers watershed management organizations (JPWMO's) within the County. The Minnesota Board of Water and Soil Resources (BWSR), under Minnesota Statutes § 103D.261, subd. 2, granted the County's petition to enlarge the existing Brown's Creek Watershed District by including within the District territory already within the Middle St. Croix Valley Watershed Management Association (MSCVWMO), a JPWMO established under Chapter 103B. The MSCVWMO appealed by certiorari to the Minnesota Court of Appeals, claiming that BWSR is not authorized to assign to a watershed district land within an existing JPWMO. The Court of Appeals agreed.

BWSR pointed out, correctly, that the principle asserted by the MSCVWMO is not found among the criteria of § 103D.261. The Court of Appeals, however, looked to the similar powers of watershed districts and JPWMOs under Minnesota Statutes Chapters 103B and 103D, including the authority to adopt and implement water management plans. It concluded the legislature did not intend the "absurd result" of two watershed management organizations exercising concurrent water management authority within the same territory.

Are Watershed Districts required to serve affected property owners with notice of an assessment for a ditch or drainage system under Minnesota Statutes - 103E.091 following final approval?

In the Matter of the Construction of a Drainage System in Burnham Creek, 1996 WL 458149 (C6-96-2611)(Minn.App.)

On May 10, 1996, affected property owners appealed an assessment for the construction of a drainage system by the Red Lake Watershed District (RLWD). The RLWD moved to dismiss the case, arguing that under Minnesota Statutes § 103E.091 any appeals to assessments must be filed within 30 days of the assessment, which was ratified on December 28, 1995. The property owners argued that the thirty days for appeal did not run until the RLWD gave the affected property owners notice of the assessment, and that failure to provide such notice violated their due process rights.

The court rejected these arguments. Pointing to the language of Minnesota Statutes § 103E.091, the court held that where the legislature failed to expressly require notice of an assessment, the courts would not imply one. The court also pointed out that the affected property owners were put on constructive notice (through the RLWD's recorded approval of the assessment) and actual notice (through the notices mailed pursuant under Minnesota Statues §§ 103E.261 and 103E.325, subd. 1, which require notice to all affected property owners prior to the first and last meetings to discuss proposed assessments). No further notice after final approval of the assessment is required.

May watershed districts fund capital improvements projects through district-wide ad valorem taxes without reference to the benefits conferred on specific properties or counties contained within the district?

In the Matter of Proposed Locke Lake Project, Fridley, Minnesota, 528 N.W.2d 875 (Minn.App. 1995)

In order to remove accumulated sediment from Locke Lake, the Rice Creek Watershed District board of managers adopted a project for the creation of a man-made lake. Ramsey county, one of four counties in the district, was assessed 66 percent of the cost of the project, even though only 27 percent of the watershed districts land is within its borders. Unhappy with the manner in which it was assessed for the project, Ramsey County brought suit, challenging the method of assessment.

Citing the language of Minn.Stat § 103B.251, which required that "[c]osts must be apportioned by the benefits received by property in the county," Ramsey County argued that cost of the capitol improvement project "should be apportioned between the four counties according to the benefit each county receives." Locke Lake at 879.

The court described Minn.Stat. §103G.251 as not applicable and the county's argument as impractical. The court held that analysis of the direct benefit to a particular parcel of property is generally applicable only for special assessments, not for ad valorem taxation. Edward Kramer and Sons, Inc. v. Village of Burnsville, 245 N.W.2d 445, 448 (Minn. 1976). It rejected Ramsey County's assertion that the legislature intended to require watershed districts to assess the value of a capital improvements to every piece of property before certifying costs to the counties as too burdensome. Finally, the court examined the specific statutory language requiring the "cost to be apportioned according to benefits received by property within the county" (Minn.Stat. § 103B.251, subd. 3(b)) and held that it was intended to be applied only to subwatershed taxing districts.

It is interesting to note that the legislature quickly acted to confirm the court of appeal's interpretation of this section of the law. In the 1995 session, the legislature deleted the exact provision under § 103G.251, subd. 3(b), which Ramsey County had argued provided for the apportionment of costs of improvements according to benefits conferred on properties within the county.

May courts change the terms and conditions of permits issued by watershed districts?

Greenwood v. Minnehaha Creek Watershed District, 1995 WL 91838 (Minn.App.)

Kee Construction, Inc (Kee) applied to the Minnehaha Watershed District (MCWD) for a dredging permit in connection with the excavation of a navigational channel in the inlet of St. Alban's Bay on Lake Minnetonka in the City of Greenwood. Following hearings on the permit application, MCWD determining that the project did not have the potential for significant environmental impact and issued the permit. The City of Greenwood brought suit contesting the issuance of the permit, asking the court for a declaratory judgment.

The district court found the permit valid and granted summary judgment for the defendant MCWD, but imposed conditions on the permit and the activities it authorized. The court set specific dates when dredging activities must be done, required specific descriptions of work authorized, and also stated that any violation by Kee of the MCWD rules or its permit would result in MCWD being held to have violated of the district court's order.

MCWD appealed, arguing that the district court exceeded its scope of review by imposing conditions on the permit and by ordering that the MCWD would be held in violation of the court's order if Kee failed to comply with MCWD rules or the permit itself. The Minnesota Court of Appeals agreed, removing the conditions imposed by the court.

Addressing the specific conditions on the permit, the court held that decisions by administrative agencies are subject only to limited review. Specifically, courts may only decide whether the agency had authority with respect to a specific matter, whether it acted under the correct theory of applicable law, and whether the facts found by the agency are supported by the evidence. In short, the court could declare the existing permit valid or invalid as issued.

The court agreed with MCWD that decisions about the particulars regarding how to reduce the impact of dredging on the environment are non-judicial functions. The court ruled that when courts impose such conditions, they improperly substitute their judgment for the responsible administrative agency. Id. at *2.

The court also agreed with MCWD that the district court exceeded its authority when it ordered that the district would be held in contempt if Kee violated the terms of its permit. Since Kee had not begun work, much less violated the terms of the permit, such a question was purely speculative. Minnesota courts are prohibited from delivering opinions advising what the law would be upon a hypothetical events or states of facts. Id. at *2, citing Seiz v. Citizens Pure Ice Co., 290 N.W. 802, 804 (1940).

Are watershed districts subject to the Minnesota Equal Access to Justice Act?

In the Matter of the Application of the Lac Qui Parle-Yellow Bank Watershed District to Excavate Four Floodways in the Lac Qui Parle River, Lac Qui Parle County, 1995 WL 6419 (Minn.App.)

The court also considered a request by Clean Up Our River Environment (CURE) for costs and attorney fees under the Minnesota Equal Access to Justice Act (MEAJA). MEAJA allows prevailing parties to claim fees and expenses in a contested case proceeding if the action is "brought by or against the state, [and if the party] shows that the position of the state was not substantially justified." Id. at *2, citing Minn.Stat. § 3.762(a) (1992). CURE had acted as in intervenor against the watershed district in the contested hearing before the ALJ, and it claimed that the watershed district met the definition of "state" under MEAJA.

The court rejected this argument and held that watershed districts are not liable for costs and attorney fees under MEAJA. The court found that "[a]lthough the general purpose for establishing a watershed district is 'to conserve the natural resources of the state' (Minn.Stat. § 103D.2001, subd. 1), it is neither the state, an agency of the state, nor a 'political subdivision' of the state." See Minn.Stat. § 103D.011, subd. 20.

Do watershed districts possess the power to license?

In re 1994 and 1995 Shoreline Improvement Contractor Licenses of Landview Landscaping, Inc., 546 N.W.2d 747 (Minn.App. 1996).

The Minnehaha Creek Watershed District (MCWD) was established under state law "to regulate improvements by the riparian property owners of the beds, banks, and shores of lakes, streams, and wetlands for preservation and beneficial public use." Minn. Stat. § 103D.201 subd. 2(11) (1994). The largest lake within the MCWD's watershed, Lake Minnetonka, is a highly urbanized lake with a steep shoreline. Lakeshore property owners frequently spend anywhere from $5,000 to $50,000 on riprap shoreline improvements to combat erosion, but these projects often failed to comply with the MCWD's shoreline protection standards. The MCWD adopted a licensing rule as a way to ensure that shoreline improvement contractors complied with these standards, in order to provide adequate shoreline protection and prevent erosion.

In May of 1993, the MCWD received evidence of multiple violations of its standards by Landview Landscaping. Following a public hearing concerning Landview's fitness for a shoreline contractor's license, the Board of Managers agreed to issue a license to Landview, subject to several conditions in light of these violations. The MCWD placed the same conditions on Landview's license for the following two years as well.

Landview appealed these license conditions to the Minnesota Board of Soil and Water Resources (BWSR), arguing that the District failed to provide due process and challenging the District's authority to license contractors. BWSR affirmed the MCWD's decisions in all respects, specifically finding that:

MCWD has authority to adopt rules to require permits for shoreline improvements; licensing of shoreline improvement contractors is a reasonable means for MCWD to implement its regulatory program; the conditions imposed on Landview's 1994 and 1995 Licenses are reasonable; Landview had adequate notice and an opportunity to be heard. In an attached memorandum, BWSR affirmed the MCWD's rationale for its licensing rule:

The need for the licensing of shoreline improvement contractors will vary from watershed district to watershed district. In the case of Lake Minnetonka, there is a great deal of shoreline improvement activity by means of placement of rip rap. The MCWD has determined that, in light of the amount of this activity and its potential for significant impact upon the watershed, it is necessary to ensure that rip rap and other shoreline improvements are properly constructed in accordance with MCWD rules and permit requirements.

Landview appealed BWSR's decision to the Minnesota Court of Appeals. The Court of Appeals held that the MCWD lacked statutory authority to license shoreline contractors.

Does a watershed district have the authority to acquire state lands through eminent domain?

In the Matter of the Commissioner's Order Denying Permit Application 93-1024; Project No. 19 of the Red Lake Watershed District, 527 N.W.2d 173 (Minn.App. 1995).

Red Lake Watershed District (RLWD) devised the "Maple Lake Project" to augment lake levels in Maple Lake and to bolster flood-control measures in the area near the lake. The project involved construction of a dike on state-owned property and would result in occasional flooding of substantial portions of the Polk Wildlife Management Area. The RLWD conducted procedures and hearings as required by state law, evaluated the project's costs and benefits, and approved the project.

RLWD made no effort, however, to condemn or otherwise acquire the specific state land targeted by the project. Instead, the RLWD applied to the DNR for a permit to begin construction of the project. The DNR denied the permit request. The RLWD requested a contested hearing before the DNR Commissioner, where an administrative law judge recommended summary dismissal. The Commissioner agreed, citing the RLWD's inability to acquire property rights necessary for construction of the pond.

On appeal, the RLWD argued that Minn. Stat. §§ 103D.715 and 103E.025 gave watershed districts the power to take or damage state land for the project. The court disagreed, however, holding that that Chapter 103E applies only to drainage projects, and that the specific language of 103D.715 only modified the language in 103E. Since the purpose of the Maple Lake Project was not drainage, the watershed district did not have the power to take or damage state land for the project under Chapter 103E.

The court noted that the district has eminent domain powers under Chapter 103D as well, but that Chapter 103D lacked the expedited procedures and enhanced powers of Chapter 103E. The court also found that the district had not demonstrated that it had complied with the procedural steps required under Chapter 103D. (Citing Robertson v. Belle Creek Watershed District, 255 N.W.2d 236, 240 (Minn. 1977).

As a result, the court upheld the commissioner's ruling holding that the watershed district could not use its Chapter 103E powers to gain the rights to property except in drainage projects.