Opinion ID: 1930678
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Heading: Availability of Other Financial Incentives

Text: The district court also held Dubuque did not have the authority under Chapter 368 of the Code of Iowa to offer the other financial benefits. . . . The court stated: Nowhere does the statute provide that the City of Dubuque may offer consenting landowners deferral of payment for expenses for city services such as sewer or water hookup fees, or exemption from the costs of installation of city sewer or water lines. Dubuque and the CDB argue this holding ignores Dubuque's home rule power. We agree. In 1968, Iowa amended its constitution to give municipalities home rule authority. See Iowa Const. art. III, § 38A. Under the home rule amendment, a city has the power and authority, not inconsistent with the laws of the General Assembly, to determine their local affairs and government, except that they shall not have power to levy and tax unless expressly authorized by the General Assembly. Id. Similarly, the Iowa Code provides: A city may, except as expressly limited by the Constitution of the State of Iowa, and if not inconsistent with the laws of the general assembly, exercise any power and perform any function it deems appropriate to protect and preserve the rights, privileges, and property of the city or of its residents, and to preserve and improve the peace, safety, health, welfare, comfort, and convenience of its residents. Iowa Code § 364.1 (2003). Home rule power was intended to renounce the common law Dillon rule. City of Des Moines v. Master Builders of Iowa, 498 N.W.2d 702, 703 (Iowa 1993) (referring to Merriam v. Moody's Ex'rs, 25 Iowa 163, 170 (1868), an opinion authored by Chief Justice John F. Dillon). Under the Dillon rule, cities were powerless to act in the absence of an express legislative grant of authority. Id. Home rule authority reversed this presumption by giving cities broad police powers, except they cannot impose taxes without the express authorization of the legislature. Home Builders Ass'n of Greater Des Moines v. City of West Des Moines, 644 N.W.2d 339, 345-46 (Iowa 2002). As we have discussed, section 368.7 gives cities the discretion to provide a partial exemption from city property taxes to property owners in an annexed territory. The statute does not contemplate the offering of any other benefits. The district court in turn reasoned the city property tax incentive was the only benefit a city may offer property owners. But in its analysis, the district court asked the wrong question. The question is not whether a statute gives a city authority. Instead, the question is whether a statute forbids it. Nothing in chapter 368 forbids a city such as Dubuque from offering additional benefits. Without such a limitation, a city has the authority to offer other benefits, unless they are related to taxation, which does require an express authorization from the legislature. See Iowa Code § 364.3(4) (2003) (A city may not levy a tax unless specifically authorized by a state law.). We have previously defined a tax as `a charge to pay the cost of government without regard to special benefits conferred,' meaning its primary purpose is to raise revenue. Kragnes v. City of Des Moines, 714 N.W.2d 632, 639 (Iowa 2006) (quoting Home Builders Ass'n of Greater Des Moines, 644 N.W.2d at 346). In exercising its police power, a city may charge a citizen when it provides a service to that citizen. Home Builders Ass'n of Greater Des Moines, 644 N.W.2d at 347. The fee associated with that service is not a tax so long as it is the fair and reasonable cost of providing that service. Newman v. City of Indianola, 232 N.W.2d 568, 573-74 (Iowa 1975). (holding a city may charge a property owner the reasonable cost of extending an electrical transmission line to owner's property). In the present case, Dubuque offered to reduce the costs associated with extending water and sewer lines to the properties in the proposed territory. These are costs related to the conferral of special benefits. Asbury never alleged these costs are more than the reasonable costs for such services. Consequently, these additional benefits are not tax-related. Thus, Dubuque does not need a special authorization by the legislature to offer these benefits. We therefore conclude all of Dubuque's proposed benefits were proper.