A New Twist in the Road for Road Disclosures

While intended to make real estate transfers more opaque, 33 MRSA section 193 likely will result in more demands upon municipal public work’s directors, CEOs, assessors, and planners.

On August 1, 2018, 33 MRSA § 193 went into effect, requiring sellers of nonresidential property to disclose “information identifying any abandoned or discontinued town ways, any public easements and any private roads located on or abutting the property, if known by the seller” along with “information identifying the party or parties responsible for maintenance of any abandoned or discontinued town way, public easement or private road on or abutting the property identified pursuant to subsection 1, including any responsible road association, if known by the seller” (Me. Stat. tit. 33, §193). It was subsequently repealed by Legislative Document 1151 on March 7, 2019. 

On September 19, 2019, a new statute, 33 MRSA §193, sub–§3, will take effect, requiring sellers of nonresidential property to disclose information “describing the means of accessing the property by a public way” and “any means other than a public way, in which case the seller shall disclose information about who is responsible for maintenance of the means of access, including any responsible road association, if known by the seller” (H.P. 622, 129th Leg., 1st Reg. Sess. [Me. 2019]).

While the prior act required disclosures of known information about abandoned or discontinued town ways, public easements, private roads, and their maintenance, the new rule requires sellers to disclose information about all means of accessing the property, but only requires disclosure of who is responsible for maintenance for means other than a public way. Thus, the disclosure requirements are no longer limited to abandoned or discontinued ways, public easements, and private roads. Rather, sellers must disclose “any means” of accessing the property.

Since the answers to these questions are often unclear, it is likely that municipalities will field more phone calls and inquiries about the status of roads.

Are Notices of “No Violation” Appealable in Maine?

If a code enforcement officer (CEO) issues a written decision finding “no violation” of a land use ordinance, is that decision appealable? Recently, Maine’s Law Court tackled this very question and answered “yes”—but only so long as the ordinance does not say otherwise.

In Raposa v. Town of York, an abutter became concerned about how a neighbor was using property. The abutter contacted the CEO, who responded to the abutter with an email explaining that no violations were warranted based on the neighbor’s use of the property. The CEO’s email included a notice advising the abutter that the Board of Appeals could hear an appeal from “any order, requirement, decision, or determination” made by the CEO or any other person charged with administering the ordinance. Heeding that advice, the abutter appealed the CEO’s “no violation” determination to the Board of Appeals and then to the Superior Court, where the Town of York moved to dismiss the appeal for lack of jurisdiction. The Superior Court granted the Town’s motion, finding that the Board’s review of the CEO’s decision was advisory and therefore unreviewable.

Reversing the Superior Court, the Law Court explained that Notices of Violation (NOVs) have been generally appealable since 2013—when the Legislature amended the statute governing appeals from municipal boards—except where an ordinance expressly provides that certain decisions are only advisory and may not be appealed. Although the Law Court noted that the plain language of the amended statute does not explicitly address “no violation” notices, the Court also noted that its previous decisions have “expressed the understanding that such ‘no violation’ actions are similarly appealable” because of their potential impact on property uses. In Raposa, the Law Court took the opportunity to make its previous expressions more concrete, holding conclusively that “a CEO’s written decision interpreting a land use ordinance is appealable to the Board and in turn to the Superior Court—whether the CEO finds that there is or is not a violation—so long as the ordinance does not expressly preclude appeal.” Because the Town of York’s ordinance did not have a provision that expressly precluded appeal, the Law Court found that the abutter’s appeal was not subject to dismissal by the Superior Court. 

In light of Raposa, municipalities should review the appeal provisions in their land use ordinances and update them accordingly.

Why Municipalities Should Convey Real Property by Quitclaim Deed

Municipalities own real estate that they convey to third parties in a variety of situations. Most often this occurs in the context of conveying property the town acquired because of unpaid property taxes back to the taxpayer once the past due amounts have been paid in full, but also in the context of municipal-owned property in industrial parks and other property suitable for development. Almost always a municipal quitclaim deed is the appropriate instrument for conveying tax acquired property. A municipal quitclaim deed releases any right, title, or interest the municipality may have in the described property to the identified grantee, without any covenants or guarantees of title. Put another way, such deeds do not contain any representation or warranty by the municipality as to whether or not it actually has title to the described property or whether or not the property is subject to any lien or encumbrance. Muni-quitclaim deeds are truly the “buyer beware” of deed forms.

Nonetheless buyers of property and other parties acquiring title to real property from a municipality often ask for a warranty deed or a quitclaim with covenant deed. The rationale these buyers offer is that they, unlike taxpayers paying back taxes, are paying real money for the property and they are entitled to know that the municipality has title and that it is free and clear of liens and encumbrances. These buyers are in effect asking the municipality to perform the buyer’s due diligence and search title to the property. For a number of reasons, this burden switching is inappropriate and improperly places the burden of insuring title on the municipalities’ residents.

While municipal quitclaim deeds offer nothing in the way of promises to the buyer, other forms of deeds—for illustration purposes, warranty deeds and quitclaim deeds with covenant—provide a number of such promises. A warranty deed is the seller’s promise that it has the interest in the property it is purporting to convey to the buyer; that there are no encumbrances on the property, such as mortgages, liens, or easements, other than those referenced in the deed; and that the buyer’s possession of the property will not be interrupted by someone with a superior interest in the property. Most importantly, the seller promises that its title to the property is free of defects, and that it will defend the buyer’s possession of the property against the claims of “all persons,” even with respect to defects or claims that may have arisen years before the seller acquired the property. By giving a warranty deed, then, a seller takes on potential liability not just for what the seller has done during his or her period of ownership, but also for claims arising well before he or she acquired the property, of which it likely has no knowledge. Quitclaim deeds with covenant offer similar promises, with the exception that the guarantee of no defects or claims covers only that period of the seller’s ownership.

A municipality often acquires property without having performed a complete title examination and is thus unable to know whether it has title to the property, whether such title is subject to any liens or encumbrances, and whether others have claims to the property. Only by a thorough title examination is the municipality able to answer these questions and to meaningfully evaluate what such promises might entail for potential future liability. Even though a tax foreclosure provides that a municipality owns a property free and clear of any encumbrances, the title standards require either a five- or fifteen-year waiting period for clean title, depending on when the period of redemption expired.

Even though the possibility of selling a property for more money exists when a deed other than a quitclaim is given, absent an action to quiet title, the risks outweigh the benefits.

Town Helps Residents End Water Rationing

In follow-up to our post last week, a real world example of when it is necessary for a municipality to intervene in a landlord tenant situation arose in Brunswick.

Because the wells were failing to keep up with demand of the 1,200 residents of the Bay Bridge Estates Mobile Home Park, its owners began rationing water by restricting supply during what they considered off-peak times during the day. This caused numerous complaints to the Town office from residents who were unable to adequately bathe, wash dishes, and do laundry. As Town Attorney for Brunswick, we sent a letter to the owners of the park pursuant to 14 M.R.S. § 6026-A, demanding that they provide both a short-term and long-term plan to address the water shortage within twenty-four hours. What followed was an exchange of correspondence, emails, and conference calls, which resulted in the owners agreeing to immediately begin drilling a new well and to pay, in the meantime, for water to be provided by the Brunswick Topsham Water District to fill their twelve 5,000-gallon storage tanks as necessary. The trucking of water allows residents to have full access to water without rationing or other restrictions. 

The new well is expected to be online by January 19, and will meet all anticipated water needs for the park going forward. In this case, on behalf of the Town, we were able to assist the residents through the crisis. The Town did not have to expend the costs of trucking the water, but was willing and prepared to do so and recover its costs under the statute if the owners had not agreed. This is clearly a case where it was necessary and helpful for a municipality to intervene in a dispute between tenants and their landlord.

Maine Court Reiterates That Private Persons Do Not Have Standing to Enforce Land Use Ordinances

The Maine Superior Court recently issued a decision reiterating that only municipalities have the authority to enforce land use regulations. The decision is a reminder that private persons are not entitled to sue for enforcement of a land use ordinance and that, if they do, any such action may be dismissed.

At issue in Emanuel v. Town of Bristol was the use of a refrigerated trailer at a lobster wharf, which several nearby residents objected to because the trailer was loud and ran at unpredictable intervals. After the wharf owner did not respond to the residents’ concerns, the residents contacted the town with their objections, claiming that the trailer was being used without prior review or approval by the Town’s planning board or code enforcement officer (CEO). The residents requested that the Town require the wharf to obtain a planning board permit. In response, the Town’s CEO explained the trailer was not a “structure” requiring a permit and that, because there was no consequent violation of the shoreland zoning ordinance (SZO), the Town would not issue a notice of violation. The residents appealed the Town’s decision to the Superior Court.

On appeal, the Superior Court pointed to two previous decisions from Maine’s Law Court, both of which found that private persons did not have standing to initiate enforcement proceedings against their neighbors. Based on these decisions, as well as the language of the SZO, the Superior Court found that it is the duty of the CEO, not private persons, to enforce the SZO and to investigate complaints of alleged violations. And, if the CEO’s actions do not result in an abatement of the violation, then it is the municipal officers of the Town who have the authority to initiate legal action – not private persons.

New Deadline for Calling Secret Ballot Elections in Maine

One of those deadlines municipal officials tend to know off the top of their heads is that referendum elections must be ordered at least 45 days in advance. This has now changed! The Maine Legislature in its last session changed the filing deadline for nomination papers from 45 days to 60 days prior to the election. Because the deadline for calling a referendum election is, under 30-A M.R.S.A. § 2528(5), the same as the deadline for filing nomination papers, both now fall on the 60th day prior to the election. This new deadline applies both to referendum questions ordered by the municipal officers and those requested by citizens’ petition. If your town has a different deadline under a local charter, that deadline will still apply regardless of this law change.

Maine Legislature Votes on Marijuana Bill Veto

Updating our previous post on the fate of LD 1650, Governor LePage last week vetoed the bill and set the stage for action at the State House on Monday, where the Legislature was deciding whether to override the Governor’s veto. A two-thirds vote in both the House and Senate was required to overcome a veto.

We now know the result: the veto has been sustained, with the House voting 74-62 to uphold the Governor’s action.

A vote to override the Governor’s veto would have meant that the bill, which provided a framework for implementing the legalization of recreational marijuana approved by voters last November, would have become law and provided some flexibility for municipalities to regulate recreational marijuana. Today’s vote at the Legislature, however, means that the legalization of recreational marijuana will continue to be in legal limbo for the foreseeable future.

Marijuana Bill Awaits Veto Decision

LD 1650, An Act to Amend the Marijuana Legalization Act, was passed in both the House and the Senate on October 23, 2017. Governor LePage has until November 2, 2017, to sign the bill, veto the bill or allow it to become law without his signature. The 77-page bill comprehensively rewrites the legalization bill enacted by Citizens’ Referendum now one full year ago. Legalization of marijuana has continued to be in a legal limbo. It is legal to grow and possess certain amounts of marijuana, but it is not legal to buy or sell it, even privately.

As a municipality there are reasons to be in favor of this amended law. It now contains an opt-in provision for municipalities rather than an opt-out provision. Because of this, some of the organizations backing legalization have actually opposed the bill because they argue that it is more difficult for a municipality vote to opt-in to a law than it is to opt-out. The bill also provides economic incentives to those municipalities who participate in the program and do not opt-out. The law provides for a number of different types of licensing, including retail sales, grow only and testing facilities. A licensee may hold the first two licenses, but the testing facility must be independent. If the governor does not sign the law, there will be a number of challenging legal issues arising.

The bill also sets more appropriate tax rates, limits properties to 18 plants growing, closes “gift” and “delivery” scams and allows employers to hire and fire based on adult use of legal marijuana.

Update on Marijuana Progress at the Maine Legislature

As of early June 2017, Maine’s implementation of the legalization of marijuana for adult use continues to chug along. The Maine Legislature’s Joint-Select Marijuana Legalization Implementation Committee has been meeting several times per week now for months, poring over the initiated Marijuana Legalization Act and each potential facet of the forthcoming structure it has called for.

After the MLA’s passage last November, the incoming 128th Maine Legislature submitted more than 70 marijuana-related bills pertinent to all areas of legalization and the state’s existing medical marijuana program. More than 30 of these bills have been carried over for the MLI Committee’s work later this summer, fall, and next session. However, the Committee also has the power to report out its own legislation, which it has already done, passing LD 243 (assigning licensing authority to DAFS) and a recently passed bill to mandate laboratory testing of marijuana and marijuana products and set up a licensure program for these laboratories. Both of these bills have yet to be signed by the governor and enacted into law.

In the meantime, the Committee has been engaged in in-depth discussion around everything from what cultivation, retail, enforcement, and implementation timing will look like. Amid these proceedings, the Legislature will be eager to make use of any potential revenue collected from the taxation of marijuana. Following adjournment of the First Regular Session, the Committee’s plan is to meet in July and August and report out an omnibus bill, establishing an adult use program, to a Special Session of the Legislature in the fall.

While the Legislature has been working on implementation of the Adult Use Program, the Department of Health and Human Services has been undergoing a rewrite of rules for the Maine Medical Use of Marijuana Program (MMUMP). Through this rewrite, DHHS is seeking to provide patients, caregivers, dispensaries, municipalities, and Maine citizens more clarity and guidance in the MMUMP. Participants in the MMUMP and municipalities, especially, have been seeking this guidance for quite some time, as the rules have not been amended since 2013, despite numerous statutory changes.

On June 14, DHHS held a public hearing at the Augusta Civic Center to take public comment on these rules. Fewer than 50 folks, mostly caregivers, testified at the public hearing. Most of their comments were in support of the program and in opposition to DHHS’s efforts to bring greater clarity and effective enforcement to the program. The deadline to provide written comments to DHHS is June 26.

Here is a link to further information on the rules and the rulemaking process:

http://www.maine.gov/dhhs/mecdc/rules/maine-cdc-rules.shtml

Accessory Uses and Their Pitfalls

Municipalities put a lot of thought into comprehensive plans and zoning ordinances to make sure that no uses are allowed which will cause negative impacts on a given neighborhood. However, we often see ordinances that inexplicably allow any type of use in a district as long as it is an accessory use. “Accessory uses” are usually defined as being incidental and subordinate to the principal use of the property.

A municipality will often have a table of uses in its ordinances that allows only specific types of use in a particular zone, but allows accessory uses in all zones. Let’s think for a second about what this might mean. Consider a residential zone in which a nursing home is an allowed use, but a restaurant is not an allowed use. The nursing home has a cafeteria that is open to the general public. If “accessory uses” are allowed in all zones, the nursing home now has a back-door (yet perfectly legal) way to run a restaurant without violating the ordinance. Neighbors who thought they were living in a restaurant-free zone might complain, as might would-be restaurateurs who do not have the same opportunity.

Home occupations are also frequently given broader latitude than the same type of use conducted outside the home, even though the impacts on the neighborhood might be the same. Is that auto repair shop in someone’s home garage any less noisy than a principal use of the same type that might not be allowed in the same zone?  This matters because zoning restrictions are a limitation on property rights, and there has to be a rational basis supporting all such restrictions.

What can be done? Planning boards and staff should consider carefully their definitions and ordinance provisions pertaining to accessory uses. One simple solution is to include a provision that accessory uses are only permitted to the extent they would be permitted as a principal use in the given zone. Consider also the types of uses such as hospitals, civic centers, schools, churches and other campus-type facilities that may encompass several accessory uses. It often makes sense to include the more common elements of these facilities in the definition of the primary use, rather than trying to figure out which uses are subordinate and accessory. Generally speaking, planning officials should put the same degree of thought into the impacts of these accessory activities as they do into the impacts of their principal use counterparts.

Can the Deliberative Session of Town Meeting in a Senate Bill 2 Town Change the Intent or Purpose of a Petitioned Warrant Article?

Cady v. Town of Deerfield

In Cady v. Town of Deerfield, decided January 18, 2017, the New Hampshire Supreme Court dealt with the question of the extent to which the deliberative session of the Town Meeting in a Senate Bill 2 municipality may amend a warrant article.  A Senate Bill 2 town is one which has adopted the provisions of RSA 40:13 and which accordingly conducts its town meetings in two sessions:  the first session is deliberative in nature and consists of “explanation, discussion, and debate” on each proposed warrant article; and the second session involves voting by official ballot on each of the warrant articles, as amended at the first session.

In Cady, the Town of Deerfield’s deliberative session considered two petitioned warrant articles, the first of which was to make the Welfare Director an elected position at a salary no greater than $5,000 per year; and the second of which was to make the Police Chief an elected position to be paid $65,000 per year, subject to cost of living increases.  The deliberative session of the Town Meeting changed the petitioned warrant articles to “express an advisory view that the position of Welfare Director [Police Chief] be an appointed position as it is at the present time.”

RSA 40:13, IV(c) provides that warrant articles may be amended at the deliberative session, provided that “no warrant article shall be amended to eliminate the subject matter of the article.”  Cady argued that changing the petitioned articles, from making the Welfare Director and the Police Chief elected positions to having them remain as appointed positions, improperly changed or eliminated the intent or subject matter of the petitioned articles.  The Court rejected this argument, finding that the plain meaning of RSA 40:13, IV(c) prohibited only amendments that “eliminate” the subject matter of a warrant article, not amendments that change the “intent”  of a warrant article.  In addition to the plain meaning of the statute, the Court was also persuaded by a 2016 bill that was rejected by the Legislature.  That bill would have modified the language of RSA 40:13, IV(c) to provide that: “No petitioned warrant article shall be amended to [eliminate] change the subject matter or the intent of the article.”  (Words that were proposed to be added to RSA 40:13, IV(c) are in bold and words to be removed appear in brackets and are struck through.)

Thus, unless and until the Legislature amends RSA 40:13, IV(c), the deliberative session of a Senate Bill 2 “or official ballot” municipality may change warrant articles so long as the basic subject matter is not eliminated, even if the intent or purpose of the article is changed. This applies both to the deliberative session of a Senate Bill 2 town and to the traditional town meeting in a municipality that has not adopted the “official ballot” form of town meeting. 

THE ABOVE IS APPLICABLE ONLY TO NEW HAMPSHIRE MUNICIPALITIES.  MAINE HAS A SUBSTANTIALLY DIFFERENT BIFURCATED WARRANT ARTICLE PROCEDURE.

Social Media Policies and the First Amendment

Over the last several years, the National Labor Relations Act has driven much of the discussion around the legalities of social networking policies. Since 2011, for example, the NLRB’s Office of General Counsel has issued three reports concerning employer social media policies, all of which emphasize the importance of drafting social media policies narrowly so as not to infringe on activities protected under the NLRA.  For municipalities and other public employers, however, an equally important consideration when preparing and enforcing social media policies is the First Amendment.

Social Media Policy in the City of Petersburg

As a case in point, the Fourth Circuit Court of Appeals recently held in Liverman v. City of Petersburg that a city’s social media policy was overbroad under the First Amendment where it prohibited in “sweeping terms” the dissemination of any information that had a tendency to discredit or reflect unfavorably on the city or its employees.  The policy applied to the city’s police department and prohibited officers from making “negative comments” on the operations of the department, which the policy explained did not constitute protected speech. Another provision prohibited officers from making comments online that “disrupted the workforce” and further discouraged officers from posting any information about their off-duty activities. The policy explained that violations of the policy would be judged on a case-by-case basis. 

At issue in the case was a Facebook exchange between two officers while off-duty, which criticized the way rookie cops were being promoted to instructors based on special interests rather than experience. After the learning of the exchange, the department disciplined the officers for violating the social media policy. The discipline ultimately made the officers ineligible for promotion to open sergeant positions.  The officers subsequently sued and claimed that the city’s social media policy infringed on their free speech rights. 

The Fourth Circuit found that although social media presents novel issues, it is the scope and restriction on speech that matters under the First Amendment – not the medium of the speech. Here, the court found that there was no doubt that the social media policy regulated the officers’ rights to speak on matters of public concern, as it was effectively a “blanket prohibition on all speech critical of the government employer.” Because the policy imposed a significant burden on expressive activity, the court looked to whether it was justified by real, not merely conjectural harms to the department’s operations.  The court acknowledged that divisive social media use had the potential to undermine the department’s interest in maintaining camaraderie among officers and trust within the community, but it nonetheless found that these concerns were too speculative to justify the policy’s sweeping restrictions and chilling effect on protected speech.   Having found the policy itself unconstitutionally overbroad, the court turned to the officers’ discipline and found that it, too, was unconstitutional.   The court found the officers’ posts dealt with issues of public import and were not merely personal grievances.  According to the court, whether the officers were correct in their views was not the issue, because the issue they addressed in their posts – i.e. the risks posed by inexperienced supervisors – was a matter of public concern.

For municipalities, this decision highlights the need to consider the restrictions contained in social media policies and the potential chilling effect of those restrictions on protected speech (and, similarly, the exercise of rights under the NLRA).  Wherever possible, municipalities should avoid restrictions that are ambiguous, vague, or susceptible to interpretation, as they are more likely to be viewed as unlawfully overbroad.  Municipalities can further reduce that risk by providing examples of the specific conduct prohibited under the policy.  Although doing so provides no guarantee, it is more likely to result in a narrowly tailored policy that avoids running afoul of the law.

Maine Municipal Law Update: Biennial Budget, Marijuana Legalization & Opportunity Agenda

Maine's Biennial Budget

Legislative work continues to steadily flow in Augusta, Maine as more bills are taken up by policy committees and many of them are meeting passage or being killed. In addition, the state’s biennial budget is slowly inching forward as the Appropriations & Financial Committee has accepted non-controversial initiatives, and will soon tackle the more contentious ones.

The Marijuana Legalization Implementation Committee

In the meantime, the implementation of adult-use marijuana legalization continues to pose interesting and as-yet undecided policy questions to the Marijuana Legalization Implementation Committee (MLI) and the State House’s respective party caucuses.

The MLI has thus far held a series of public hearings allowing any and all members of the public to voice a range of opinions around marijuana policy, including the state’s preexisting medical program. However, only LD 243 has been taken up in MLI. This bill, after being extensively worked by the committee received a 16-1 “ought to pass as amended” vote.  It is now poised to establish a “hub and spokes” model of licensing that would be centered on the Department of Administrative and Financial Services (DAFS) with major “spokes” extending to the Bureau of Alcoholic Beverages and Lottery Operations (BABLO) and the Department of Agriculture, Conservation, and Forestry (DACF). BABLO, an organization that exists within DAFS, would regulate packaging and retail, while DACF would regulate cultivation. 

The Committee will continue to meet regularly through the end of session and continue through the interim period between sessions.  The Committee is likely to hold several more large public hearings throughout the spring that will cluster individual bills based on their proposals and the different aspects of legalization implementation.

Opportunity Agenda

In other news, Legislative Democrats unveiled the “Opportunity Agenda” last week, a counter-proposal to the most recent LePage biennial budget. The program is touted by Democrats as providing the largest property tax cut in history, funded partially through new revenues created by adult-use marijuana legalization.

Lis Pendens Only Available when Title to Real Estate is Involved

In the pending case of Brunswick Citizens for Collaborative Government, et al. v. Town of Brunswick, (Cumberland County Superior Court) the Petitioners claim that the Town of Brunswick failed to follow its Charter procedure to hold a public hearing and potential referendum election after receiving signed petitions.  

The case involves a piece of property that the Town Council had voted to sell. The point of the petitions was to hold a referendum election so the Town would retain the property. The case was brought as a Rule 80B Appeal and a Declaratory Judgment action. It explicitly does not involve title to real estate. It was not so noted on the Complaint nor was that checked in the civil cover sheet.  Nonetheless, the plaintiffs obtained a notice of lis pendens from the Clerk and recorded it in the Registry of Deeds, describing the property at issue in the lawsuit. The Town of Brunswick filed a Motion to Cancel the Lis Pendens arguing that a lis pendens under the law, 14 M.R.S. § 4455, only applied where title to real estate was specifically involved. The Court agreed and ruled that it was appropriate to cancel the notice of lis pendens. The Court noted that a lis pendens is a specific statutory procedure used to put title examiners on notice of issues involving the title to real estate.  It is not a general tool for advising the world of the pendency of lawsuit, in an improper effort to discourage the sale of real estate.

Preti Flaherty represents the Town of Brunswick in this case.

Let's Talk Municipal Finance - Issuing Bonds

In my previous installment, I discussed several financing alternatives available to municipalities and certain other governmental entities to supplement revenues from their tax base or user fees. One common option is the issuance of bonds, either independently, or through a pooled issuance. 

The Issuance of Bonds

The first step to issuing a bond is the approval process at the local level.  The process varies depending on the municipality or governmental entity’s charter, enabling statutes, and other protocols that may be applicable to the issuer. It may require a formal recommendation from the governing officers followed by a vote of approval at a meeting of the residents of a municipality, or an approval only from the governing  body of a governmental entity.  Municipalities should note that their ability to incur debt is not unlimited.  For example, municipal debt it is capped by statute at an aggregate of 7.5% of the municipality’s last full state valuation, subject to certain exceptions for, by way of example, debt incurred for school purposes, storm or sanitary sewer purposes or for energy facility purposes.  Certain bonds, such as those for school purposes, may be funded primarily through payments from the state rather than from tax revenues at the local level.

Independent vs. Pooled Issuance

A municipality or governmental entity may choose to issue bonds completely on its own or through a pooled issuance, such as those with the Maine Municipal Bond Bank or New Hampshire Municipal Bond Bank. Bonds issued independently are done so via either a “directed sale” using a financial adviser or a “negotiated sale” using an underwriter.  The use of a pooled issuance, however, can help decrease costs and achieve a higher credit rating, which translates to lower interest rates.  According to the Maine Municipal Bond Bank, while the average cost of an individual municipality’s issuing a bond on its own would be approximately $15,000-18,000, a pooled issuance costs a municipality only about $2500 to $5000 (the cost of local bond counsel).  

Following a pooled issuance, however, the municipality is subject to on-going administrative fees while the bond is outstanding, which are not incurred by the municipality if it chooses to issue the bonds independently. If the municipality or governmental entity chooses to issue bonds using a pooled issuance, it must go through an application and approval process with the entity facilitating the pooled issuance and, if approved, follow the issuance schedule of the facilitating body, which often limits the number of issuances each year.

Regardless of whether a municipality or governmental entity decides to issue bonds independently or as part of a pooled issuance, it is subject to certain obligations following the issuance of the bonds until their maturity date. These obligations include, in the case of tax-exempt bonds, adopting a post-issuance compliance policy intended to maintain the tax-exempt nature of the interest on the bonds.  The municipality or governmental entity may also be required to enter into a continuing disclosure agreement or continuing disclosure certificate, which require the issuer to comply with certain Securities and Exchange Commission reporting requirements.

In my next installment in this series, I will discuss anticipation notes, which are commonly issued directly through a bank.  Anticipation notes are a short-term financing alternative used in anticipation of upcoming bond proceeds or tax revenues.

Superior Court Rejects Disappointed Bidder’s Claim

Whether required by state law or by local ordinance or practice, municipalities often use the competitive bidding process to purchase property, equipment and most types of services. 

In the recent case of Design Dwellings, Inc., d/b/a DDI Construction v. Town of Windham, (Sup. Ct. Cumberland County, March 13, 2017) the plaintiff challenged an award of a road construction contract by the Town of Windham to a contractor who was not the low bidder.  In denying DDI’s request for preliminary injunction, the Court reiterated that Carroll F. Look Construction Company v. Town of Beals, 2002 Me. 128, ¶9, 802 A.2d. 994, holds that when a municipality sends out a request for bids it is making a request for an offer, not an offer which may be accepted to form a contract. By soliciting responses to the bid, the municipality then has the right to make a choice of whether or not to enter into a contract by accepting one of those bids as an offer.  This is particularly so when a municipality makes it clear that it is free to accept or reject any and all bids.

After the preliminary injunction was denied, the Town of Windham filed a Motion for Judgment on the Pleadings on an amended complaint.  The plaintiff argued that even if the request for bids was just a request for offers, a disappointed bidder may still recover its bid preparation costs and possibly lost profits if they rely on statements made in the bidding documents. Justice Lance Walker ruled that for the same reasons that a request for bids is not an offer, it is not reasonable to rely on any statements made in those requests for bids, and granted the Motion for Judgment on the Pleadings.

The point of all this is that municipalities simply need to be careful about how they use language in requests for bids, to ensure that the process being followed is simply a request for offers.  After the offer is received, the municipality can then make a decision as to whether or not to enter into a contract, and with which bidder.

Preti Flaherty represented the Town of Windham in this case.

What can your Animal Control Officer do for you?

I remember the days (and I don’t mean they were necessarily the good old days) when Animal Control Officers were called “dog catchers”.  They had a truck, picked up stray dogs, and did not try to help the dogs or reunite them with their families.  They instead took the animals to the “pound”, the owners may or may not have been informed, and if the dog was not timely picked up by the family, the dog was euthanized.   

An Evolving Role

Animal Control Officers’ roles have evolved quite a bit since that time and, in my opinion, for the better.  A “good” Animal Control Officer (ACO) will do much more for a municipality than just keep stray animals off the streets.  An ACO can be a community relations officer for the municipality, maybe even an educator, helping the community he or she serves understand their obligations as pet owners – vaccination requirements, pet and kennel licensing requirements, leash laws and the like.  ACOs can help identify community cat colonies, hoarding situations, and people in need of assistance for the spaying and neutering of their pets. 

Of course, ACOs are also enforcement officers, and their positions are often within the applicable police department. ACOs are not armed with guns, but they do have the ability to request subpoenas and warrants working the District Attorney’s office in their jurisdiction.   ACOs can accompany police officers on calls when animals are involved because ACOs are trained to deal with animals in stressful situations.  

Training in Maine and Beyond

In Maine, ACOs must go through a four-day training program (about 4 to 5 hours of training per day) and then are required to satisfy on-going continuing legal education requirements. With the support of their municipality, some ACOs will further their education by taking additional classes to enhance their value to the community. Although this observation is mostly anecdotal, it seems that there is a shortage of trained ACOs to fulfill the needs of Maine’s municipalities.  Positions are often part-time, with some ACOs being spread thin because of having to serve multiple municipalities.

In The Neighborhood

Given the current popularity of pets, my bet is that members in a community welcome a well-informed, friendly ACO, ready to assist with helping them understand their obligations as pet-guardians, but also looking to the ACO to be their eyes and ears for cases of neglect, cruelty, and when other enforcement actions are required.

Next up – a discussion of the help available to municipalities to address community cat colonies.

Land Use Boards/Subsequent Application Doctrine

Land use boards, especially planning and zoning boards, are often faced with applications to develop property that are similar to prior applications to develop the same property. Since the New Hampshire Supreme Court’s decision in Fisher v. City of Dover, 120 N.H. 187 (1980), the law in New Hampshire has been that a zoning board of adjustment (“ZBA”) should not consider a subsequent application unless a material change of circumstances affecting the merits of the application has occurred or the application is for a use that materially differs in nature and degree from the prior application. The Supreme Court refers to this doctrine as the “subsequent application doctrine” (sometimes referred to as the “finality doctrine”).

Until April 2016, the Supreme Court had not applied the subsequent application doctrine to applications before a planning board. In CBDA Development, LLC v. Town of Thornton, 168 N.H. 715 (2016), the Court held that the Town’s Planning Board had properly decided that it could not consider the plaintiff’s second application because it did not materially differ in nature and degree from its initial application, which had been denied. The Court rejected plaintiff’s argument that the subsequent application doctrine applied only to applications before a ZBA.

The Court in CBDA Development, LLC v. Town of Thornton established or reiterated a number of principles that should be of interest to members of all land use boards, including:

1. That the subsequent application doctrine is alive and well and applies to decisions of all land use boards. In addition to applications before ZBA’s and planning boards, the doctrine would also apply, for example, to applications before a building code board of appeals.
2. The burden of proof is on the applicant to show that the subsequent application involves a material change of circumstances affecting the merits of the application or is for a use that materially differs in nature and degree from the original application.
3. The land use board itself should determine, as a threshold question, whether the subsequent application doctrine applies to preclude consideration of the second application. If it applies, then the board should not proceed to a consideration of the merits of the application. If it does not apply, then the board may proceed to consider the application’s merits. It is within the sound discretion of the land use board to determine whether the second application has been changed sufficiently, or whether the circumstances have changed sufficiently, to warrant hearing the merits of the second application.

Land use boards should be cautious about applying the subsequent application doctrine too zealously. For example, where a subsequent application is changed to address specific concerns that the land use board raised when considering the merits of the first application, the board should hear the merits of the second application. In Brandt Dev. Co. of N.H. v. City of Somersworth, 162 N.H. 553 (2011), the Court held that there had been substantial changes in the law applicable to variances so that the ZBA should have heard the subsequent application.

Note that while this entry addresses New Hampshire law, the Maine Supreme Judicial Court issued a similar ruling in the 1994 case of Silsby v. Allen’s Blueberry Freezer, Inc., 501 A.2d 1290, 1295 (Me. 1985). The guidelines discussed above are generally applicable in both states.

Municipal Land Use Appeals – Ripe for Confusion?

For the past decade, Maine's Supreme Judicial Court has been struggling to find a way to reduce – and expedite – the number of land use appeals going through the courts. It took the opportunity to make a sweeping new rule in the case of Bryant v. Town of Camden, decided last year. In Bryant, an abutter appealed the decision of the Town of Camden's Zoning Board of Appeals to issue a special exception permit to a local inn that wished to expand. The Town's Zoning Ordinance gave jurisdiction to the Board of Appeals to decide such applications by reviewing certain criteria aimed at evaluating whether the development plan would cause undue burdens on the neighborhood. Since the ZBA issued the decision, it was appealed directly to Superior Court. The Superior Court upheld the ZBA's decision and the abutter appealed to the Law Court.

To the surprise of the parties, the Law Court ended up dismissing the appeal based upon issues that had not been raised by either party. The decision begins:

In an effort to reduce confusion, costs, and delay in municipal appeals, we today announce more clearly the need for finality in municipal decisions before a municipal entity’s action may be appealed to the courts. Specifically, we consider when a municipal agency’s decision constitutes a final action subject to immediate judicial review and when, instead, additional municipal decision making is necessary before an appeal is ripe for consideration by the courts.

The Court went on to find that because the inn would still need site plan approval from the Planning Board and Code Enforcement Officer before it could go through with the planned expansion, the appeal was not ripe for consideration by any court. The inn's owner would essentially have to get all of its permits and approvals before the abutter could appeal the issues from the first decision.

Municipal and land use attorneys across the state have been trying to determine the best way to respond to the Bryant decision. All are concerned about the amount of time and expense that might be spent on proceeding through a review process when the first step has already been challenged. I represented the Town of Camden in Bryant, and have been participating in a working group aimed at finding a legislative or procedural compromise to the concerns raised by the Court. The group has presented a proposed change to Rule 80B (which governs appeals of municipal decisions) to allow the Superior Court to decide whether it is appropriate to proceed with review despite any requirement for additional permits. The group is also working on proposed legislation to at least provide that a decision is final for appeal purposes once it has been before any board with jurisdiction over the development (as opposed to final building and occupancy permits issued by the Code Enforcement Officer or other officials).

Until there is some clarification regarding the reach of the Bryant decision, we are helping our clients implement ways to streamline or consolidate their review process on multi-stage approvals. There are a few simple strategies to do so that will reduce the burden on applicants, abutters and municipal officials alike. Please contact us if you would like more information.

*Please note that this post addresses Maine law only. To the best of our knowledge, no courts in New Hampshire or Massachusetts have applied the ripeness rule in this way.

Service Animals and the Maine Human Rights Act

Do you have to let that animal in here? The law might just say that you do.

The Maine Human Rights Act (“HRA”) is broad in its reach and is intended to cover municipalities and their properties. In a law that became effective this year, the Legislature created a new definition of “service animal”, thereby distinguishing between the rights of a person with a service animal and those with an assistance animal.

A service animal “is a dog that is individually trained to do work or perform a task” for a person with a disability, which tasks are directly related to the disability. By way of example, a dog that provides navigation assistance to the visually impaired or assists by pulling a wheelchair qualifies as a service animal. Services to a human such as providing emotional support, well-being, comfort or companionship do not qualify as “work or tasks” for purposes of a service animal. The exclusion of these types of support services, however, can apply to animals that may qualify as assistance animals under Maine law. Assistance animals are those animals that either are (a) determined to be necessary to mitigate the effects of a physical or mental disability by certain health professionals or a licensed social worker or (b) individually trained to perform work or tasks for the benefit of an individual with a physical or mental disability. Only dogs can qualify as service animals, a limitation that does not apply to assistance animals, which means that cats, ferrets and other animals may qualify as assistance animals.

Municipal buildings are “places of public accommodation” under the HRA and, therefore, municipalities cannot discriminate against people because of a disability, including that person’s use of a service animal. In addition, the HRA requires that landlords allow tenants with disabilities to have the use of a service animal or an assistance animal.

The right to the benefit of service animals and assistance animals are limited if it can be shown that such an animal poses a direct threat to the health and safety of others. It is interesting to note that the potential adverse effects to a person with an allergy to the animal is not a sufficient reason for excluding such an animal. Rather, accommodations need to be made to allow for both the presence of the service or assistance animal and the person with the allergy.

It is a civil violation to mispresent an animal as a service or assistance animal, with the fine being not more than $1,000 for each occurrence.

So, the next time someone comes into town hall with an ostrich claiming it is a service animal, you really don’t have to let that ostrich in.