Title: Holding's Little America v. Board of County Com'rs of Laramie County

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Holding's Little America v. Board of County Com'rs of Laramie County1985 WY 207712 P.2d 331Case Number: 85-62Decided: 12/19/1985HOLDING'S LITTLE AMERICA, A WYOMING CORPORATION, APPELLANT (PETITIONER), 

v. 

BOARD OF COUNTY COMMISSIONERS OF LARAMIE COUNTY, APPELLEE (RESPONDENT).
Supreme Court of Wyoming
HOLDING'S LITTLE AMERICA, A WYOMING CORPORATION, APPELLANT 
(PETITIONER), 

v. 

BOARD OF COUNTYCOMMISSIONERS OF LARAMIECOUNTY, APPELLEE 
(RESPONDENT).

 
 
Appeal from the District 
Court, LaramieCounty, George P. Sawyer, 
J.

 
 
Alan B. Minier 
of Hirst & Applegate, Cheyenne, for appellant.

Bert T. 
Ahlstrom, Jr., Cheyenne, and Dean W. Borthwick of 
Borthwick & McCall, Cheyenne, for appellee; oral argument by Mr. 
Ahlstrom.

Before THOMAS, C.J., and 
ROSE,* ROONEY,** BROWN and CARDINE, JJ.

* Retired November 1, 
1985.

** Retired November 30, 
1985.

CARDINE, 
Justice.

[¶1.]     This case is before us 
a second time. The first time it was before us, Holding's Little America v. Board of County 
Commissioners of Laramie County, Wyo., 670 P.2d 699 (1983), we held that the 
challenged administrative action of authorizing industrial development revenue 
bonds could not be adequately reviewed because the grounds upon which the agency 
acted were not clearly disclosed by the record before us. Since then, the Board 
of County Commissioners of LaramieCounty has confirmed its previous action 
of authorizing the bonds. Holding's Little 
America has again petitioned for review claiming that certain 
findings of the Board were not supported by substantial evidence, and that the 
Board's decision was arbitrary, capricious and an abuse of discretion. We set 
aside the Board's actions.

FACTS

[¶2.]     The Board of County 
Commissioners of LaramieCounty (Board) authorized industrial development 
revenue (IDR) bonds for the construction by Roadside, Inc. of a hotel and 
restaurant complex near Cheyenne. The Board authorized the IDR bonds on 
October 19, 1982, after four different meetings at which they took various 
actions concerning the bonds. Specifically, the Board approved an inducement 
resolution on October 6, 1981; discussed amending the resolution on May 11, 
1982; amended the resolution on September 28, 1982; and finally authorized the 
issuance of the bonds on October 19, 1982.

[¶3.]     Holding's Little America, appellant, filed a petition seeking review 
of the Board's action authorizing these bonds. In Holding's Little America v. Board of County 
Commissioners, supra, we held that the Board was an agency as defined by § 
16-3-101(b)(i), W.S. 1977, of the Wyoming Administrative Procedure Act and that 
the issuance of IDR bonds was an action reviewable by this court. We concluded 
that the record in that case was "insufficient to permit adequate review of the 
action of the county commissioners in order to determine whether or not they 
acted arbitrarily, capriciously, or abused their discretion." Holding's Little 
America, supra, 670 P.2d  at 705. Therefore, we remanded the case 
for further proceedings by the Board.

[¶4.]     After the remand, the 
Board, in further proceedings on September 4, 1984, adopted a resolution 
"Confirming the Actions Taken, Determinations and Findings, Made by the Laramie 
County Commissioner[s] Prior to the County's Issuance of Its Industrial 
Development Bonds for the Roadside, Inc. Project."1 Holding's then again filed a 
petition for review with the district court, claiming that findings of the 
Board, which were required to be made by statute, were not supported by 
substantial evidence and that the Board's decision was arbitrary, capricious, 
and an abuse of discretion. The district court certified the case to this court 
pursuant to Rule 12.09, W.R.A.P.2 

[¶5.]     Holding's states the 
issue now for review as:

"Were the determinations 
and findings made by the Board of County Commissioners of LaramieCounty in confirming certain Industrial 
Development Revenue Bonds supported by the record?"

[¶6.]     The Board contends 
there is sufficient evidence in the record for this court to affirm its actions. 
To support this contention, the Board relies on the minutes of its meetings in 
1981, 1982 and 1984 at which the bonds were discussed; seven affidavits which 
assert that the Board was advised of the economic impact the project would have 
on the county; documents of the mechanics of the bond's issuance; and the fact 
that the final bond resolution authorized the issuance of only $1.2 million in 
bonds instead of $5 million as originally planned.

JUDICIAL 
REVIEW

[¶7.]     We have previously held 
that the Board's authorization of IDR bonds is an action which is subject to 
judicial review, "at least with respect to minimum compliance with requirements 
of statutes providing for the issuance of these bonds, within the Administrative 
Procedure Act's definition of `other agency action.'" Holding's Little 
America, supra, 670 P.2d  at 703. Section 15-1-705, W.S. 1977, 
1985 Cum.Supp., provides a number of requirements which must be met when issuing 
IDR bonds. It provides in part:

"(a) Before leasing any 
project the governing body shall determine the:

"(i) Project furthers the 
public purpose of providing health care facilities in the state or meets the 
following public purposes:

"(A) Creating new or 
additional employment opportunities;

"(B) Expanding the tax 
base and increasing sales, property or other tax revenues to the municipality or 
county;

"(C) Maintaining and 
promoting a stable, balanced and diversified economy among agriculture, natural 
resource development, business, commerce and trade;

"(D) Promoting or 
developing use of agricultural, manufactured, commercial or natural resource 
products within or without the state.

* * * * * 
*

"(b) No bonds shall be 
issued pursuant to the provisions of this article to acquire, construct or 
improve a project unless the governing body makes the determinations and 
findings required by W.S. 15-1-705(a)(i)."

[¶8.]     Appellant claims that 
the Board failed to fully consider the factors listed in § 15-1-705(a)(i) and 
that the evidence before the Board cannot support its determination that the 
project met the public purposes delineated in that section. "A statute may 
specifically require that the agency consider particular factors." Holding's Little 
America, supra, 670 P.2d  at 704.

[¶9.]     Section 
16-3-114(c)(ii)(A), W.S. 1977 (October 1982 Replacement), provides that, when 
reviewing agency action, the reviewing court shall:

"(ii) Hold unlawful and 
set aside agency action, findings and conclusions found to 
be:

"(A) Arbitrary, 
capricious, an abuse of discretion or otherwise not in accordance with 
law."

In determining 
whether the action of an agency is arbitrary, capricious, an abuse of 
discretion, or otherwise not in accordance with the law, we must ascertain 
whether the decision is supported by evidence contained in the record. Holding's Little 
America, supra, 670 P.2d  at 703. It is an abuse of discretion 
for an administrative agency to act without collecting the necessary facts. First National Bank of Thermopolis v. 
Bonham, Wyo., 559 P.2d 42 (1977). 

REVIEW OF THE 
RECORD

[¶10.]  When this case was first before us, we 
could not adequately review the action of the Board because the record was 
insufficient. We believed that there may have been meetings, presentations, and 
discussions with the applicants prior to the Board's original inducement 
resolution of October 6, 1981, although they did not appear in the record. Now 
the Board has attempted to supplement the record and confirm its prior 
action.

[¶11.]  The Board's latest action is based upon 
very little evidence which was not already before this court in the first 
appeal. Although the Board held a meeting after our remand, at which the bonds 
were discussed, the only testimony from this meeting which appears in the record 
is from persons representing the appellant. This testimony does not in any way 
support the Board's action. Also included in the record for the first time are 
all of the documents relating to the mechanics of the bond issuance. None of 
these documents, however, are relevant to the question of whether there was 
evidence to support the Board's determinations required by § 15-1-705, W.S. 
1977, 1985 Cum.Supp.

[¶12.]  The only evidence now in the record which 
was not previously before us is seven affidavits which attempt to establish what 
was presented to the Board when the bonds were authorized. In order to determine 
whether the Board abused its discretion in this case, we must examine these 
affidavits along with the evidence in the original appeal which supports the 
Board's action.

[¶13.]  The resolution confirming the Board's 
previous authorization of these bonds is based primarily upon affidavits of the 
commissioners who were in office in 1981 and 1982, representatives of Roadside, 
Inc., the LaramieCounty attorney, and the LaramieCounty clerk. The affidavits of the 
commissioners and the clerk explain that the meetings of the Board are tape 
recorded only, and that the recordings of the meetings at which the bonds were 
discussed are unavailable because the tapes have been 
reused.

[¶14.]  The affidavits of the commissioners and 
the representatives of Roadside attempt to "establish what factual 
representations were made and what information was considered" before the Board 
originally authorized the bonds.3 

[¶15.]  They respond to our statement made in the 
original appeal that perhaps "there were meetings, presentations, discussions 
with the applicants" that did not appear in the record. In the original appeal, 
we noted that only conclusory statements were before us, and therefore we could 
not provide adequate review. "To afford the court an opportunity to 
informatively and intelligently discharge that function [of review] it must 
first be known what underlying evidentiary facts the agency relied upon * * *." 
Pan American Petroleum Corp. v. 
Wyoming Oil and Gas Conservation 
Commission, Wyo., 446 P.2d 550, 555 (1968). "The court 
must know * * * why" the agency acted as it did. Geraud v. Schrader, Wyo., 
531 P.2d 872, 879 (1975).

[¶16.]  The affidavits explain why the Board 
issued the bonds. But, although they explain why the Board acted, they do not 
provide the evidence needed to sustain the Board's actions. In Holding's Little America, supra, 670 P.2d  at 706, we stated that "`the orderly functioning of the process of review 
requires that the grounds upon which the administrative agency acted be clearly 
disclosed and adequately sustained.'" (Emphasis added.) Quoting Securities and Exchange Com'n v. Chenery 
Corp., 318 U.S. 80, 63 S. Ct. 454, 462, 87 L. Ed. 626 (1943).

[¶17.]  First we consider the affidavits of 
Roadside's representatives, James Martin and Marvin Gertsch. These two 
affidavits are nearly identical. The affiants state that they appeared before 
the Board at the 1981 and 1982 meetings in order to present information relating 
to the Roadside project, and that they "discussed the economic benefits of the 
proposed Project with the Board of County Commissioners." More specifically, the 
affiants told the Board

"that the truck stop 
complex and restaurant complex would employ approximately 40 people, thereby 
creating permanent employment opportunities for residents of the County * * 
*";

"that the annual ad 
valorem taxes to be levied against the Project would be approximately 
$8,500.00"; and

"that based upon the 4% 
sales tax rate * * * the estimated annual sales tax collections from the Project 
would approximate $30,000."

[¶18.]  In addition, Martin and Gertsch advised 
the Board that as a truck stop/restaurant the project would promote "the use of 
natural resource products" and "the use of agricultural products." Finally, the 
representatives "advised" the Board "that both the labor and construction 
materials and supplies would be obtained locally, thereby promoting business, 
commerce and trade within the local community * * *."

[¶19.]  Affidavits of the commissioners serving 
at the time of the meetings in 1981 and 1982 also were used to support the 
confirmation resolution. These three affidavits are nearly identical. With 
regard to the consideration given the statutory factors, the affiants 
state:

"6. That the participants 
related to the Board of County Commissioners and the Commissioners found 
that:

"(a) the service station 
and restaurant complex would employ approximately 35-40 people and that a motel 
complex to be constructed with conventional financing would employ approximately 
100 people; and

"(b) the estimated costs 
of the project and that the ad valorem taxes to be levied would be approximately 
$8,500.00; and

"(c) that the motel and 
restaurant Project would generate approximately $800,000 in sales per annum, and 
would result in an estimated annual sales tax of approximately 
$30,000."

Like the 
affidavits of Gertsch and Martin, the commissioners' affidavits state that the 
project would promote agricultural, manufactured, commercial and natural 
resource products. In addition, the commissioners' affidavits state that Holding's requested that the bonds not 
be used "to finance a truck stop (an island with gas pumps), and said request 
was adopted by the Board * * *."

[¶20.]  The remaining affidavits were from the 
LaramieCounty clerk and from the 
county attorney. The clerk stated nothing in her affidavit which related to the 
Board's consideration of the statutory factors. The county attorney states that 
he advised the Board that: "`This is a legitimate purpose for which industrial 
revenue bonds are allowed under the statute and under the law.'" He also states 
in his affidavit that "the underlying facts supporting the statutory conclusions 
made by [the Board] were fully discussed in the meetings which considered the 
request of Roadside, Inc."

[¶21.]  The only remaining evidence upon which 
the Board relies to support its position is the minutes from the meetings at 
which the bonds were discussed, and the fact that the final bond authorization 
was only for $1.2 million, as opposed to the $5 million originally planned. 
Although authorizing a lesser amount of bonds indicates that the Board did not 
act without considering Holding's opposition, we fail to see how it provides 
evidence that the Board considered the statutory factors discussed later. Nor do 
we believe that the minutes support the Board's actions.

[¶22.]  The minutes of the Board meetings were 
before this court in the first appeal. We still maintain that the minutes fail 
to show that all of the statutory factors were considered. The minutes are brief 
summaries of the meetings and include statements such as: "Mr. Gertsch stated 
the issuance of such bonds would increase the financial activity of the county." 
"The Board stated * * * [t]he project was advantageous to the county as local 
jobs would be created." In other words, the minutes fail to disclose the evidence which was presented to support 
these statements and the Board's actions.

[¶23.]  We note that a number of the statements 
in the affidavits and the minutes are no more than conclusory claims that the 
statutory requirements were met. We stated in Holding's Little America v. Board of County 
Commissioners, supra, 670 P.2d  at 705, that the Board "must do more than 
recite, in conclusory fashion, the requirements of the statute." This court has 
"expressed strong disapproval of so-called findings which [are] merely 
statements of the ultimate facts or conclusions of the administrative agency." 
Shenefield v. Sheridan County School District No. 1, Wyo., 544 P.2d 870, 872 
(1976). If the record does not disclose a factual basis for the Board's findings 
that the project met the public purposes delineated in § 15-1-705, W.S. 1977, 
1985 Cum.Supp., the action taken cannot stand.

REQUIREMENTS OF THE 
STATUTE

[¶24.]  Section 15-1-705, W.S. 1977, 1985 
Cum.Supp., requires the Board must have determined that the project met four 
general public purposes before it could authorize the bonds. Appellant contends 
that the record fails to support the Board's determinations that the project met 
the public purposes of:

"(C) Maintaining and 
promoting a stable, balanced and diversified economy among agriculture, natural 
resource development, business, commerce and trade."

We agree that 
there was not sufficient evidence presented to the Board so that it could have 
made the determination required by § 15-1-705(a)(i)(C).

[¶25.]  The Board had before it evidence that the 
project would be built with local labor and local materials. It also was advised 
that the project would promote the use of various natural resource products. 
Such evidence is relevant to whether the public purposes stated in subsection 
(a)(i)(D) were met by the project. A project built with local materials 
certainly would promote the use of various products within the state. Promoting 
the use of various products, however, is quite different from "[m]aintaining and 
promoting a stable, balanced and diversified economy among agriculture, natural 
resource development, business, commerce and trade." The legislature obviously 
recognized such difference when it enacted § 15-1-705 with subparagraphs (C) and 
(D), so that both of these public purposes must be met before IDR bonds can 
issue.

[¶26.]  In order to determine that the project 
helps to maintain and promote "a stable, balanced and diversified economy" there 
must be evidence concerning the area's current economic base. Without such 
evidence, it is impossible to conclude that a project promotes diversity or 
stability. The record does not disclose that any evidence was presented to the 
Board relating to the area's economic sectors of agriculture or natural resource 
development. The record also reveals very little evidence relating to the 
remaining economic sectors.

[¶27.]  The evidence that was presented relating 
to current business and trade does not support the determination that this 
project promoted or maintained diversity, stability or balance. The only 
evidence concerning the number of area restaurants was presented by the general 
manager of Holding's at the 1984 meeting. He informed the Board that numerous 
restaurants in the area had been forced to close because of lack of business in 
recent years. Likewise, his testimony indicated that there were enough motels in 
the area so that his motel's occupancy rate was below 
capacity.

[¶28.]  In Pan American Petroleum Corp. v. Wyoming Oil 
& Gas Conservation Commission, supra, 446 P.2d 550, this court noted the 
necessity of taking expert testimony, in a highly technical field, even though 
such evidence might be somewhat speculative. In the present case, there was no 
testimony, expert or otherwise, which indicated that the project would promote 
economic balance and stability of the area. Although this testimony might be 
somewhat speculative, we believe that it, or some other evidence, was needed 
before the Board could properly make the determinations required by the statute. 
There was no expert or other testimony concerning the area's agricultural or 
natural resource development industries so that the Board could determine that 
the project would promote "balance" among different types of business. There was 
no evidence concerning the number, location, or kinds of restaurants or motels 
from which the Board could conclude that the project would promote or maintain 
diversification.

[¶29.]  Section 15-1-705(b) states in 
part:

"No bonds shall be issued 
pursuant to the provisions of this article to acquire, construct or improve a 
project unless the governing body makes the determinations and findings required 
by W.S. 15-1-705(a)(i)."

There is no 
evidence in the record from which the Board could have made the determinations 
and findings required by § 15-1-705(a)(i). Section 16-3-114(c)(ii)(A), W.S. 
1977, requires that we must hold unlawful and set aside agency actions which are 
an abuse of discretion. When the Board authorized the bonds, it did so without a 
scintilla of evidence supporting the finding required by § 15-1-705(a)(i)(C) and 
such action is an abuse of discretion. Burlington Northern Railroad Co. v. Public Service 
Commission of Wyoming, Wyo., 698 P.2d 1135 
(1985).

[¶30.]  We do not hold that this project could 
never qualify for IDR bonds under §§ 15-1-701 through 15-1-710, W.S. 1977. We 
only hold that there was no evidence before the Board which was contained in 
this record on appeal from which it could make the determinations and findings 
required by § 15-1-705.

[¶31.]  When this case was first before us, we 
stated that the grounds for the Board's actions must be clearly disclosed and 
adequately sustained. Although the Board has attempted to disclose the grounds 
upon which it acted, it has completely failed to "adequately sustain" the 
reasons for its actions.

[¶32.]  We must set aside the Board's actions as 
an abuse of discretion.

1 The resolution 
provided:

"WHEREAS, the Board of 
County Commissioners of Laramie County, State of Wyoming held regularly 
scheduled public meetings on October 6, 1981, May 11, 1982 and September 28, 
1982 in the Commissioners' Chambers; and

"WHEREAS, on the agenda 
at these three meetings was the item `Laramie County, Wyoming Industrial 
Development Revenue Bonds - Roadside, Inc. Project which was considered in full 
by the Board, and the action[s] of the Board with respect are thereto recorded 
in the Board Minutes.'

"NOW, THEREFORE, BE IT 
RESOLVED BY THE GOVERNING BODY OF LARAMIE COUNTY, WYOMING.

"1. Findings. Based upon information 
furnished and representations made available to the CountyCommissioners at the public meetings held on October 
6, 1981, May 11, 1982 and September 28, 1982, the CountyCommissioners made certain determinations and findings 
concerning the economic benefits to LaramieCounty which would result from financing a 
portion of the Roadside, Inc. Project with Industrial Development Bonds. Said 
determinations, findings, the procedures followed and the underlying facts for 
the Commissioners' actions as reflected in the Bond Resolution for the Series of 
Bonds described herein, and other matters involved in the meetings held on 
October 6, 1981, May 11, 1982 and September 28, 1982 are set forth in detail in 
the attached affidavits of Janet C. Whitehead, Dean Fogg, Jack Humphrey, Shirley 
Frances, William D. Bagley, Marvin Gertsch and James 
Martin.

"2. Confirmation. That the determinations 
and findings made by the Laramie County Commissioners at the October 6, 1981, 
May 11, 1982 and September 28, 1982 meetings, as set forth in said Bond 
Resolution, which were based on the facts presented at said meetings, taken as a 
whole and as set forth in the affidavits attached hereto, concerning the 
Roadside, Inc. Project and the economic benefits to Laramie County as a result 
of financing a portion of Roadside, Inc. Project with Industrial Development 
Bonds and the security for the payment thereof, are hereby ratified and 
confirmed.

"3. Prior Action. That all action heretofore 
taken by the CountyCommissioners of LaramieCounty directed toward the issuance of 
Industrial Development Bonds for the Roadside, Inc. Project is hereby ratified 
and confirmed."

2 Rule 12.09, W.R.A.P., 
provides in part:

"The review shall be 
conducted by the court without a jury and shall be confined to the record as 
supplemented pursuant to Rule 12.08, W.R.A.P., and to the issues raised before 
the agency. The court's review shall be limited to a determination of the 
matters specified in § 16-3-114(c).

"If after such review, 
the district court concludes the matter to be appropriate for determination by 
the Supreme Court, the district court may certify the case to the Supreme 
Court."

3 The affidavits in this 
case were the basis for the Board's action confirming its prior authorization of 
the bonds. These affidavits were incorporated by reference in the confirmation 
resolution and are properly before us under Rule 12.07, W.R.A.P., which, in 
relevant part, provides:

"The record in a 
contested case shall consist of the matter required by section 16-3-107(o), W.S. 
1977, of the Wyoming Administrative Procedure Act. To the extent that any matter 
so required was not preserved by the agency, and there is no record thereof, the 
court may take evidence of the matter. The record in all other cases shall 
consist of the appropriate agency documents reflecting the agency action and the 
basis thereof."

We stated 
previously that the action in question here was not part of a contested case. 
Therefore, the affidavits are properly a part of the record as documents 
reflecting the agency action and the basis thereof.

These affidavits 
are not "litigation affidavits" which are subject to criticism as "post hoc" 
rationalizations, and traditionally found to be an inadequate basis for review. 
See, e.g., Citizens to Preserve Overton 
Park, Inc. v. Volpe, 401 U.S. 402, 91 S. Ct. 814, 28 L. Ed. 2d 136 (1971). They could, however, be subject to the criticism that they are also 
no more than "post hoc" rationalizations and should therefore be viewed 
critically. There is no doubt that it would have been more prudent not to have 
destroyed the recordings of the meetings, even though we recognize that 
rerecording on the tapes is an attempt by the Board to save money. In any event, 
whether these affidavits are viewed critically makes no difference, in this 
case, because they in no manner provide the necessary support for all of the 
required determinations.

We make the 
above statements knowing that we have held that a hearing was not required in 
this case, but also that appellant is entitled to judicial review of the Board's 
actions under § 16-3-114, W.S. 1977 (October 1982 Replacement). In order to 
provide effective review in determining whether there was minimal compliance 
with § 15-1-705, W.S. 1977, 1985 Cum. Supp., there must be some evidence that 
the Board considered all of the statutory factors. Holding's Little 
America, supra, 670 P.2d  at 705.

We also note 
that Rules 12.07 and 12.08, W.R.A.P., allow courts reviewing agency actions to 
take evidence, or additional evidence, in specific situations stated in those 
rules. This court has questioned the wisdom of a district judge assuming the 
responsibility of developing a record when reviewing contested cases. See Board of CountyCommissioners of TetonCounty 
v. Teton County Youth Services, Inc., Wyo., 652 P.2d 400 
(1982).