Opinion ID: 2141954
Heading Depth: 1
Heading Rank: 3

Heading: The RISE Issue.

Text: The RISE program, established in Iowa Code chapter 315 and administered by the Department of Transportation, was created to promote economic development in Iowa through the establishment, construction, improvement and maintenance of roads and streets. Iowa Code § 315.3(1). The program is funded by a portion of the motor fuel and special fuel excise taxes. Iowa Code § 315.2(1). Qualifying projects can be funded in whole or in part by RISE money. Iowa Code §§ 315.5, 315.6. In order to fully pay for any particular project, RISE funds can be combined with money from other sources such as a primary road fund, the sale of general obligation bonds, other city or county revenues, or money from participating private parties. Iowa Code § 315.6(1). The issue presented in this case is whether RISE funds granted for a particular project can be used solely to pay for the public's portion of the project costs or whether such funds must also be allocated to cover a portion of the costs incurred by private landowners by way of a special assessment. This is an issue of first impression. The general purpose of the RISE program is to fund construction and improvement of public roadways. Iowa Admin. Code r. 761-163.4( b ). Nothing in Iowa Code chapter 315 or our administrative code requires that RISE funds be applied to the entire costs of a project, including those costs allocated to private landowners as special assessments. In fact, the administrative code specifically prohibits use of RISE funds for private road projects or for any other private purpose. Iowa Admin. Code r. 761-163.4( b ). Applying RISE monies only to that portion of a project benefiting the public is consistent with the general purpose of the RISE program. Requiring that a portion of the costs allocated to private landowners as a result of the special benefit received by those landowners be paid by RISE funds is inconsistent with the purpose of the RISE program and administrative rule 761-163.4( b ). Moreover, applying RISE funds only to that portion of a project benefiting the public is consistent with the purpose of the special-assessment process at issue in this case. Special assessments are a tool given to cities to assist them in financing public improvements. City of Davenport v. Shewry Corp., 674 N.W.2d 79, 84 n. 1 (Iowa 2004). Special assessments require private landowners to reimburse the city for the cost of public improvements that specially benefit the landowners. Id.; Uhlenhake, 418 N.W.2d at 646. Requiring that RISE funds, created specifically to fund public improvements, be applied toward those costs specially assessed to private landowners would be inconsistent with the underlying goal behind special assessments  to ensure that private landowners pay their fair share of improvements specially benefiting their properties. The plaintiffs argue that applying RISE money only to the public's portion of improvement costs allows the City to profit by permitting the City to avoid paying its share of the costs. We do not agree. This is not a situation in which the City received RISE money in excess of the City's payment obligations under the project. See, e.g., Kragnes v. City of Des Moines, 714 N.W.2d 632, 640-41 (Iowa 2006) (discussing the difference between a permissible fee and an impermissible tax: `If [a fee] is calculated not just to recover a cost imposed on the municipality or its residents but to generate revenues that the municipality can use to offset unrelated costs or confer unrelated benefits, it is a tax, whatever its nominal designation.') (quoting City of Hawarden v. U.S. West Comm'ns, Inc., 590 N.W.2d 504, 509 (Iowa 1999)). There is no evidence in the record suggesting that the City retained a portion of the RISE funds granted for this particular project and applied those funds to other uses. All evidence in the record shows the RISE funds received by the City were properly used to pay the costs of this particular project. We affirm the district court's ruling on this issue.