A years-long dispute between Waterford Township and the city of Northfield was settled this week when a judge dismissed Waterford’s lawsuit against the city.
In her ruling, Dakota County Judge Arlene Asencio Perkkio voided a 38-year-old annexation agreement between the city of Northfield and Waterford Township. The agreement, which called for the city of Northfield to make tax reimbursement payments to Waterford indefinitely, was found by the judge to be unenforceable, due to its lack of expiration.
The Northfield City Attorney’s Office declined to comment ahead of the publishing of this story, saying the case has not yet been closed; court administration is expected to file the final paperwork this week.
City Administrator Ben Martig and Mayor Rhonda Pownell provided statements on the case to Northfield News in an email from the city attorney’s office.
“Whatever the ultimate outcome in this case may be, the city of Northfield remains committed to working cooperatively and in good faith with Waterford Township on all matters of mutual interest and concern that may arise in the future,” Martig said. “We hope to move forward from this point with Waterford Township for the betterment of our collective community.”
Pownell added, “There are no winners or losers in this case. Our community includes neighbors that reside both in the city and outside the city. Friendships and relationships with one another do not start and stop at the city’s boundaries. Unfortunately, sometimes we have differences of opinions with one another that may not be able to get resolved through conversation. Despite occasional differences of opinion, in the end, our commonalities are stronger than our differences.”
Waterford’s attorney Mike Couri said the township respects, but does not agree with, the court’s decision.
“We still believe the intent of the parties (Northfield and Waterford in 1980) was for the agreement to be an ongoing contract,” he said. “The town board will be meeting in the future to determine whether to appeal, but at this point, no decision has been made.”
Couri noted that a party typically has 60 days after issuance of the court’s decision to file an appeal.
On April 26, Northfield staff received a summons and complaint from Waterford Township, represented by attorney Couri, stating Waterford was owed $35,600 and that the agreement, which Northfield declared void in 2010, should still be in effect. The city, in response, denied allegations of wrongdoing.
That meant a long-standing debate between the two entities would finally see its day in court.
In 1980, the two sides agreed Northfield could annex a southern portion of Waterford Township where Multek Flexible Circuits is now located. That agreement stipulated that the city pay the township a certain amount each year to compensate Waterford for lost property taxes. From 1980-2010, Northfield paid Waterford near $74,000 under the agreement.
In 2010, City Attorney Chris Hood advised Northfield to stop making the reimbursements. He said the agreement doesn’t align with state statute, concluding the agreement had expired.
“We’re saying ‘There isn’t legal authority,’” Hood said in early May, after the city received a summons from Waterford.
The city stopped making payments in 2011, but Waterford supervisors has said the agreement is valid and have continued to bill the city. The two parties have held multiple discussions on the issue, including in spring 2017, when the Waterford Township Board (Liz Messner, Frank Wergin and Larry Odegard) met with Northfield Mayor Rhonda Pownell and City Administrator Ben Martig.
Waterford sent a letter to the city, dated Aug. 9, calling for immediate payment of the “amounts owed by the city to Waterford,” totaling $32,721. The letter, signed by Board Chair Wergin, also calls for the annexation agreement to continue indefinitely, as it did from 1980-2010.
“The township, in essence, paid at the door in exchange for the city making tax reimbursement payments every year after. [The city] did it for 29 years, and suddenly decided they didn’t like that contract, didn’t want to follow that contract,” Waterford attorney Couri said in May. “[Northfield] basically said the contract was void. We don’t believe that. We’ve given our end. We want the city to honor their end.”
But the court sided with Northfield, which argued the contract cannot exist under Minnesota statute, because it does include an end date. In fact, the judge not only dismissed Waterford’s claims in the case, she granted Northfield’s request to officially declare the contract void.
The judge’s ruling noted that “… when the language of a contract is ambiguous as to durational terms, or where a contract is silent as to duration or termination, the court must construe it against perpetual duration.” She referenced prior cases to explain that when a contract has no clear expiration, the court must rule that it cannot go on forever.
“The joint resolution, being indefinite in duration, is terminable by either party upon reasonable notice after passage of a reasonable amount of time,” the judge’s memorandum stated. “… That being the case, Northfield cannot be held in breach of the joint resolution and is entitled to summary judgement dismissing Waterford’s complaint.”