More on Public-Private Partnerships

 Can PPPs Save Detroit?” asks a great piece at Next American City comparing the fates of Indianapolis and Detroit since the late 70’s.  The theory goes that because Indiana law favored public-private partnerships (like the broadband projects discussed this week), Indianapolis was able to bounce back from de-industrialization where Michigan’s barriers to such partnerings prevented Detroit from doing the same.

The article raises a point that bears to be discussed further.  Anti-privatization stands, like Michigan’s, possibly grew out of “lingering mistrust of the private sector stemming from the Depression era.”  Can we say now that the private sector is in good stead with the public, or is it just that cities are finding no alternative?

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Today’s Supreme Court Opinions 2.26.09

The Supreme Court released one opinion on land use decisons this morning, The Big Lake Association v. Saint Louis County Planning Commission.  The zoning decision under contest is a PUD approval for a resort property near the BWCA.  Saint Louis County has two categories of PUD for “resorts” which could have applied here – a commercial (the one used) which in theory applies to transient-stay and service-intensive properties; and a residential PUD which applies to properties with longer-stay housing such as cabins or timeshares, and fewer services.  The legal issue at stake before the Court was whether opponents of the plan, who now argue that the proposal should have been reviewed as a residential PUD (where it would fail as presented), sufficiently raised the issue when the County Planning Commission considered the PUD approval.  The Court of Appeals decided that they did not, and held that the issue was waived.  The Supreme Court agreed, finding that separation-of-powers principles prevent the Court from interfering in a quasi-judicial zoning decision if the matters were not raised to the deciding body.  In the recounting of the record within the opinion, it appears that no opponent took the commercial v. residential issue head-on, or even directly referenced the density standards that form the main difference between the two standards.  The Court also went on, in dicta, to decide the underlying reasonableness of the approval, though that issue was not before the court in the first place, and certainly not  after finding the issue waived.

The takeaway from this decision is that there are few “jurisdictional” mistakes a city or zoning board can make.  Opponents of a plan, if they believe the wrong standard is being applied, should be specific at every level about the “right” standard or zoning process a plan should be taking.

Today’s Court of Appeals Opinions

Two opinions of note released today:

– A published decision involving Wacouta Township’s effort to retain or create (depending on your perspective) a public beach on Lake Pepin.  The Township answered a lakeshore owner’s petition to Torrens-register their land, claiming that the beach area between the platted lot boundary and the water was public either through common-law dedication or prescriptive easement.  The District Court granted summary judgment against the Township’s claims on two grounds: (a) that the Township’s previous inaction when three other lake owners registered their property (over the past 15 years) barred them from claiming an interest in this owner’s petition; and (b) the Town had not shown sufficient facts to support their claimed interests.  Reversing, the Court of Appeals held that collateral estoppel did not bar the Township’s claim, relying more upon the doctrine that each piece of real property is unique than upon any doctrine relating to the government as a party.  As for the facts on record, the Township had entered affidavits supporting their positions, making the Court of Appeals’ decision to reverse on the merits of the claim relatively easy.  The case is remanded back to District Court where the Township still bears the burden of proving its claim.  The opinion has an excellent summary of eighty years of caselaw on both collateral estoppel and public-dedication issues, and is a good one to file away/bookmark for later reference.

– The Court also handed down a decision (unpublished) in a CUP-denial case involving a dog kennel.  Lake County’s Planning Commission denied the owner’s request for a CUP allowing a kennel for her 12 sled dogs.  The owner has a 15-acre property, but as part of a 19-lot subdivision (of 10-30 acre lots).  As is often the case with dog kennels, the record developed at public hearing focused heavily on noise, and the PC made 5 findings which all related to noise in some way, including:

Planning Commissioner Linscheld stated personal experience living in close proximity to a kennel and having been awakened in the middle of the night; other normal uses that create noise normally do not wake you up in the middle of the night.

The District Court, hearing the appeal, reversed the Planning Commission, finding that the denial was not supported by a rational basis.  The Court of Appeals reviewed the record and concluded that “at the close of the hearing, the Commission was left with evidence of two facts: (1) Lawrence’s 12 dogs would likely make some noise, and (2) some neighbors did not want a kennel in the subdivision.”  After rolling out the usual citations about lack of specific evidence and relying on neighborhood opposition, the Court of Appeals affirmed the District Court.  Just to highlight how touch-and-go these cases can be, though, the decision is not unanimous: a dissent argues that concerns about the potential for noise are sufficiently rational to deny a CUP.

PolarNet election

Since I wrote about it, let’s note that the North Saint Paul bond proposal was defeated in today’s special election.  The initiative needed 65% “yes” to pass, and voters lined up 2-to-1 against allowing the bond sale.  The point about cities needing the ability to consider projects like these is still valid, aside from the proposal itself.

The Public is Private is Public

Events in the next two weeks may determine the future of “municipal broadband” in Minnesota.  Tomorrow, residents of North St. Paul go to the polls to vote on an $18.5 million bond proposal to build a fiber-optic network for residents.  Next Wednesday, Monticello goes before the Court of Appeals to argue that its own fiber-optic revenue-bond issue is authorized by law, fighting a challenge by a private company also laying fiber in the area (Bridgewater Telephone v. Monticello, A08-1928).  Setting aside the economic merits and demerits of the proposals, what should draw interest for legal policy are the charges that the cities are intruding into private-sector businesses, and that this itself is improper.

As for the first part of the charge, the cities are clearly edging onto private-sector turf.  Monticello has pleaded for expedited handling of its case ever since Bridgewater sued; the suit required escrow of the bond proceeds, sidelining Monticello’s project – and Bridgewater is (allegedly) using the borrowed time to squeeze the City out of the market.  Telecoms arguably brought this upon themselves by dithering about building fiber-optic networks out to residences, but on the other hand, how “public” is it that North St. Paul and Monticello are both relying on the same private company to run their systems under the city’s brand?  This strategy, if spread, might lead to better and more efficient service than the sanctioned monopolies that ushered in cable TV service – at significantly more financial risk to the taxpayers – but that will be because of the competition from private companies, not because government is solving the early-adoption problem for Internet service.

But is that wrong?  Bridgewater’s argument heavily relies on the idea that it is, arguing that Internet, cable and phone services are not “utilities or other public conveniences” under Minn. Stat. 475.52 (authorizing the issue of bonds).  There is no constitutional or anti-trust angle here, the legal case is a grammar fight, and no more: the private company argues a “traditional” reading of “utility” that confines city bonds to streets, sewers and water pipes; the City fires back with a reading of “public convenience” broad enough to justify issuing bonds for municipal Caribou franchises (Bridgewater envisions city hair salons in their brief).

While it’s a lot easier to make hypothetical hay with the City’s position, it’s the one that should prevail (it did in District Court).  This is not because cities need to be more involved in private industry, but that private industry has already knocked down the wall, if it ever existed.  The recent wave of privatization in government services is making the idea of “traditional” government services laughable:  States have leased out their highways; cities float proposals to lease their sewer systems (several Minnesota cities strongly considered it five years ago); Chicago has leased its parking meters.  Privatized water is more common than you might think.  Monticello issues its bonds for a fiber-optic network on the basis of future revenue just as governments across the county are leveraging every non-tax revenue stream they have to raise money from private industry.  What is the difference, really?  Sure, there is no private competition for parking-meter services, but that low business risk is reflected in the lease price and/or the number of bidders willing to pay to run the service.  This is a trend that can only get stronger as many cities struggle to maintain infrastructure and close budget holes.  Unless the public has a sea-change in their feelings about taxes, revenue-sharing and privatization seem inevitable.  If the citizens of North St. Paul vote to fund their fiber project (and if Monticello ever gets to carry theirs out), at least they’ve had a say in the revenue split up front as a partner, rather than when they’re searching for cash and looking to sell out.

Today’s Senate Introductions

In today’s round of new bills:

– Two bills aimed at eliminating sales tax on local government purchases, one broadly exempting tax for all political subdivisions, the other exempting only public-safety purchases (SF 911, no less).

Two more bills aimed at nonconforming billboard regulation, one a complete ban on new billboards.

– A rewrite of Data Practices provisions relating to HIPAA-protected information.

Punctuation is Important

From last Thursday’s Senate introductions, a bill aimed at protecting feedlot projects from local moratorium ordinances (underlining indicates proposed new language):

In all other cases, no interim ordinance may halt, delay, or impede a subdivision that has been given preliminary approval or any development, including, but not limited to, feedlot construction or expansion that has been approved by a county board with planning and zoning responsibilities under chapter 394, nor may any interim ordinance extend the time deadline for agency action set forth in section 15.99 with respect to any application filed prior to the effective date of the interim ordinance.

The specific example makes it pretty clear what this amendment is aiming at.  But here’s the problem: is the example narrow – only “feedlot construction or expansion,” to put County Board approval on par with subdivision plat approvals – or is the whole segment the example, so that “any development” is now exempt from moratoria?  The latter seems unlikely, and one additional comma could fix the problem before it becomes a lawsuit, somewhere.