County officials clear up Lake Mitchell canal mystery, revealing land went 17 years off tax rolls
"It’s a non-meandered stream with plats along the edge of the canal, and the bottom of the canal remains with the original owner,” Jim Taylor said, noting Chuck Mauszycki owns the canal land.
MITCHELL — It’s no longer a mystery of who owns the land underneath the canal channel that flows into the west edge of Lake Mitchell.
During Tuesday’s Davison County Commission meeting, Jim Taylor, the deputy state’s attorney representing the county, discovered that Mitchell real estate developer Chuck Mauszycki owns the narrow strip of land on the bottom of the canal. However, Mauszycki, who joined the meeting by phone, explained it was his understanding that the canal was acquired by the city of Mitchell nearly two decades ago after Mauszycki had the canal built as part of his lake housing developments.
According to Taylor, the state of South Dakota owns the water flowing through the canal while Mauszycki owns the land it sits on.
“We dug into it and looked at the applicable laws. My opinion is pretty straight forward: It’s a non-meandered stream with plats along the edge of the canal, and the bottom of the canal remains with the original owner,” Taylor said.
County officials sought to determine who owns the canal for property tax purposes and clearing up the murkiness of how the waterway is controlled. Due to the misunderstanding of ownership of the canal, 17 years have gone by without anyone paying property taxes on the strip of land that serves as an access for boats to travel to and from Lake Mitchell.
Karla Love, director of Davison County Department of Equalization, said the 3.9 acres of the canal was brought on the county’s tax assessment rolls in 2005. But it was removed from the assessment rolls in 2006, Love said. As Love investigated why the canal was removed from the tax assessment rolls, she indicated that it was unclear how the decision was made to remove it, along with who made the decision.
“What I can say is the canal was never platted. It is labeled as a man-made canal,” Love said.
Randy Reider, chairman of the commission, said he hoped better records would have been kept on the canal to help explain why the land was taken off the tax rolls.
Mitchell City Attorney Justin Johnson highlighted the events that unfolded following the construction of the canal were well before his and current city leaders’ time.
Mauszycki’s attorney, Don Petersen, provided more background information into matters of the canal after it was constructed. Petersen said the Army Corp. of Engineers told Mauszycki that the canal land would become public, which is why Mauszycki believed he was no longer the owner over the past two decades.
“(Mauszycki) was unaware of any of it. When the canal was put in, he had conversations with the Army Corp. of Engineers. They explained to him that he was giving up that land, and it would be public. He understood he was losing that land and was fine with it,” Petersen said. “In 2006, somebody in the county took the acres of land out of the taxes. (Mauszycki) wasn’t aware of that and he continued to pay the property tax bills he got with the understanding that he thought from the beginning, ‘Hey I don’t own that anymore.”
Petersen said Mauszycki remains committed to having the city take ownership of the canal land, a move that would relieve him of paying future property taxes on it.
“We thought we relinquished — quite a while ago — the control and value of the canal,” Mauszycki said.
Taylor emphasized “nobody has a clue what the value is” on the narrow strip of 3.9 acres at the canal. He speculated the value of it would be very minimal.
Who controls the canal?
As the discussion over the canal progressed, Davison County Commissioner Denny Kiner sought to find out who controls the channel by asking what the process looks like for property owners with shoreline seeking to build boat docks and other features.
In response, Petersen said Mauszycki “feels he has no control over” the canal channel. However, some residents who live in Mauszycki’s development neighboring the canal had a different take.
Among the lake residents who spoke on Tuesday was Jeff Bathke, Davison County Emergency Management director, who said the covenants in place for Mauszycki’s Island development that abuts the canal outline rules specifically related to installing boat slips along the canal.
“It’s in the restrictions on that development of where you can put your boat slip,” Bathke said, noting one covenant restriction states that “boat slips cannot extend over 10 feet” into the canal.
Love confirmed the restrictions in the covenants are filed with the county’s Register of Deeds, which Kiner interpreted as conflicting the belief that Mauszycki has no control over the canal.
Love said she was informed by the Army Corp. of Engineers that a permanent retaining wall structure along the canal and a structure potentially disrupting a path on the channel could require a permit with the agency.
Taylor pitched a few suggestions on ways to move forward with sorting out who should pay property taxes on the canal and whether Mauszycki should maintain ownership of it. Adding language to the land plat survey that states the canal is dedicated to the public is one option, which he said would turn the land over to the city.
Mauszycki sided with Taylor’s suggestion to change the plat and include language stating the canal is dedicated to the public. Reider pressed city officials and looked to gauge the city’s stance on potentially taking ownership of the canal.
Although Johnson didn’t provide a direct answer as to whether the city is in favor of taking over the canal via plat tweaking, he said it appears the intention all along was for the canal to become a public channel.
“It’s difficult to say now. None of us have the institutional knowledge on how this happened. The records aren’t exactly clear as to what took place,” Johnson said. “I don’t imagine there would be a lot of opposition to it, but I can’t speak for the council.”
Johnson offered another option during the meeting for Mauszycki to consider — pursuing a quitclaim deed, which is a process a property owner can use to transfer all of the owner’s interest in the land.
As a lake resident with property abutting the canal, John Lord addressed his concerns of ownership changes at the canal resulting in back taxes being spilled over to him.
Reider explained there are no indications that adjacent lots along the canal would be responsible for any property taxes on the channel.
Dave Helleloid, a lake resident with shoreline property along the canal, asked who to seek permission from to build a retaining wall and perform shoreline improvements if the city moves forward to dredge the lake and canal. The city has yet to approve a dredging project, but design work to dredge the city-owned body of water is ongoing.
“When they do drain the lake, I want to put a retaining wall in, and I need to know who I need permission from to do that?” Helleloid asked.
No action was taken on Tuesday by the commissioners, as it was a discussion item only. It remains uncertain as to what options the county and city will take over the canal.