Court Limits Power of Municipalities to Require the Installation of Public Improvements by Subdividers

April 1, 2007

In Town of Delton v. Liston, the Wisconsin Court of Appeals held that a municipality does not have the authority to regulate the size of lots within a development as being a function of the installation of public improvements (in this case, sanitary sewers) for developments occurring within a municipality’s extraterritorial plat review jurisdiction. This is an important ruling that serves to clarify the power of municipalities to regulate the subdivision of land within a municipality’s extraterritorial plat review jurisdiction. It is important to note, however, that public improvements may still be required by a town or municipality in which a subdivision is actually located.

The facts of this case begin with a plan by Thomas and Crystal Ritzenhaler to develop a forty-acre parcel located in the Town of Delton. The Town of Delton approved the preliminary plat; but because the parcel was located within three miles of the City of Baraboo, by statute the parcel was subject to the City’s extraterritorial plat review jurisdiction. This meant that the City’s ordinance requiring that residential lots or parcels smaller than twenty acres must be served by a public sanitary sewer system applied to the Ritzenhalers’ property. The lots in the Ritzenhalers’ planned subdivision were to average between one and two acres in size and would not be served by a public sanitary sewer system. Thus the Ritzenhalers’ initial plan did not comply with the City of Baraboo’s ordinance.

The Ritzenhalers applied to the City for a variance, which was initially granted by the Common Council, but then vetoed by the Mayor. The City Plan Commission then rejected the preliminary plat outright. The Ritzenhalers and the Town of Delton successfully challenged the ordinance in the circuit court, which declared the ordinance void and ordered that the City approve the preliminary plat. The City appealed.

In its decision, the court of appeals first noted that in some cases Wisconsin Stat. ch. 236 grants the power to regulate the subdivision of land to more than one governing body. However, the court held that § 236.13(2)(a) grants specific authority to the town or municipality within which a subdivision lies to choose whether or not the subdivider will be required to install public improvements.

For support the court of appeals turned first to Rice v. City of Oshkosh, where the Wisconsin Supreme Court had interpreted § 236.13(2)(a) to grant only the governing body within which the subdivision lies the power to condition plat approval on the installation of public improvements. In Rice the Supreme Court expressly rejected the contention that a city could require public improvements in its extraterritorial plat review jurisdiction. There the court went on to explain that the legislature chose this arrangement so that decisions regarding public improvements would be made by the governmental units most accountable for those decisions.

The court of appeals found further support in Rogers Dev. Inc. v. Rock County Planning & Dev. Comm., where the court of appeals had held that a municipality may not circumvent § 236.12(2)(a) by conditioning plat approval “on requirements that compel another municipality to implement and maintain public improvements.”

The City argued that a condition related to minimum lot size was different than a requirement that a subdivision actually install a public sanitary sewer system. The court of appeals rejected this argument based on the precedent discussed above. It held that the City’s ordinance had the effect of requiring a public sanitary sewer system where lots are smaller than twenty acres. The court also noted that the City was requiring public improvements for certain lots even though it was not financially responsible for those improvements.

The court went on to rule that the purpose of the ordinance, the regulation of lot size, was irrelevant because the City had exceeded its authority. Thus any requirement by a municipality that public improvements must be installed by subdividers within its extraterritorial plat review jurisdiction would run afoul of the court of appeals’ ruling no matter the policy justification. Developers seeking approval of plats within a municipality’s extraterritorial plat review jurisdiction should have the municipality’s subdivision ordinances carefully reviewed to determine if these ordinances exceed the authority granted by the statutes. Likewise, municipalities should review their ordinances related to the subdivision of land to make sure that they will be enforceable in the situations where they have extraterritorial plat review jurisdiction.

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