Board of Water Com'rs, Laconia Water Works v. Mooney
Decision Date | 14 June 1995 |
Docket Number | No. 93-624,93-624 |
Citation | 139 N.H. 621,660 A.2d 1121 |
Parties | BOARD OF WATER COMMISSIONERS, LACONIA WATER WORKS v. Mark A. MOONEY. |
Court | New Hampshire Supreme Court |
Fitzgerald & Sessler, Laconia, and Loughlin & Wade, Portsmouth (James N. Sessler & a., on the brief, and Peter J. Loughlin, orally), for plaintiff.
Wescott, Millham & Dyer, Laconia (Edward M. Gordon, on the brief and orally), for defendant.
McLane, Graf, Raulerson & Middleton, P.A., Manchester (Richard A. Samuels and Deborah F. Morazzi, on the brief), for Manchester Water Works, as amicus curiae.
The plaintiff Board of Water Commissioners, Laconia Water Works (board) appeals the equitable decree of the Superior Court (McHugh, J.) which ruled that a certain charge levied on new users of water provided by the board was an illegally imposed growth impact fee. We affirm in part, vacate in part, and remand.
In 1987, the defendant, Mark A. Mooney, contracted with the board to obtain water service for an anticipated housing development. In the initial and subsequent contracts between Mooney and the board, Mooney agreed to pay a "system development charge" (SDC) imposed by the board.
Prior to 1987, the board had been informed by the United States Environmental Protection Agency and the New Hampshire Water Supply and Pollution Control Commission that it would be required to improve its facilities in order to comply with federal and State requirements for safe drinking water. According to the board, it chose to build a treatment facility twice as large as was then necessary to serve its existing customers and comply with the safe drinking water standards in order to accommodate "new growth" in the number of system users. The superintendent of the water works, Rodger L. Matthewman, testified that the SDC was formulated because the board "had to come up with a way to finance that difference in the plan."
The board characterizes the SDC as "a one-time initial charge assessed when a new connection is made to the water system or when an existing connection is provided with a larger meter because an existing customer has substantially increased water usage." According to the board, "the objective of the [SDC] is to have only those persons demanding additional water pay the incremental cost to have that water supplied to them," and to "have amortized funds to pay for [those] capital improvements attributable to current and contemplated growth[ ]." In his answer to the board's petition for declaratory judgment, the defendant indicated that he had not refused to bear that portion of the SDC which applies to the water treatment plant "under the 'rational nexus rule.' " See, e.g., Lampert v. Town of Hudson, 136 N.H. 196, 197, 612 A.2d 920, 920 (1992).
After paying the charge for several years as additional units were connected to the system, Mooney formally objected to the charge. The board petitioned for declaratory judgment in the superior court after concluding that Mooney's concerns raised issues of law beyond the scope of the board's authority. The court held that the SDC was an illegally enacted growth impact fee and ordered the board to refund all past monies paid by the defendant under the SDC. The court also awarded attorney's fees to the defendant.
On appeal, the board contends that the fee imposed on new users of its water service was a legally imposed system development charge that it had statutory authority to levy; that, even if the charges are deemed to be illegal growth impact fees, the defendant is not entitled to recover any of the charges collected thus far; and that the trial court's award of attorney's fees to the defendant was improper.
RSA chapter 38 authorizes municipalities to obtain and control water works systems for the benefit of their citizens. RSA 38:3 (1988). Municipalities may then vest in a board of commissioners the "construction, management, control and direction" of the system, RSA 38:16 (1988), and the ability to "establish ... regulations and ... reasonable tolls" for the water they supply, RSA 38:15 (1988). In 1955, the City of Laconia (city) purchased the water works from two private companies. By enacting Laconia Ordinances, chapter 46, the city established the board pursuant to RSA 38:16.
"For the more convenient management" of such water systems, id., a municipality may empower the board to "do all ... things necessary for carrying into effect the purposes of [RSA chapter 38]." RSA 38:3; see RSA 38:16. The city vested the board with the authority to "establish a scale of prices, terms, or rates, upon which ... water will be furnished to consumers, ... [and to] charge such additional rates as in their judgment seems for the best interest of the department and the city." Laconia Ordinances ch. 46, § 8. The city chose not to empower the board to purchase real estate, borrow money, or issue bonds for "any debt created in the construction and management of the water works." See id. §§ 6, 9.
In support of its contention that the SDC is a valid toll, the board asserts that it is essentially a "private business," and that municipal water commissions have "extraordinary powers." We disagree. Although the board may operate in a semi-independent manner, it remains nothing more than an arm of the municipality. RSA chapter 38, the enabling legislation, is titled, "Municipal Lighting and Water Systems." (Emphasis added.) The board has never applied for or received status as a separate corporation and does not issue stock. The board is overseen by the Laconia City Council and must, by statute, file financial reports with the city at the time "other city ... officers report." RSA 38:20 (1988) (emphasis added). These financial reports must be published in the annual report of the municipality. Id. Three of the five board members are appointed by the Laconia City Council; the remaining two members are the city manager and the director of public works of the city, who sit as ex officio members. Laconia Ordinances ch. 46, § 1; see RSA 672:5 (1986). Vacancies on the board are filled by the city council. Laconia Ordinances ch. 46, § 3. "So far as the transactions here involved are concerned, the board is the city." Lucier v. Manchester, 80 N.H. 361, 362, 117 A. 286, 287 (1922) (quotation omitted).
Municipalities have only "powers [that] are expressly granted to them by the legislature and such as are necessarily implied or incidental thereto." Girard v. Town of Allenstown, 121 N.H. 268, 271, 428 A.2d 488, 489 (1981) (quotation omitted); see also Dugas v. Town of Conway, 125 N.H. 175, 181, 480 A.2d 71, 75 (1984). In turn, a municipality may not delegate to a municipal board more power than the municipality has. See City of Concord v. Tompkins, 124 N.H. 463, 469, 471 A.2d 1152, 1155 (1984). Accordingly, even though the city has empowered the board to charge reasonable rates for the services it provides and to charge "such additional rates as in their judgment seems for the best interest of the department and the city," Laconia Ordinances ch. 46, § 8, we view the imposition of the SDC as though it were enacted by the city itself.
After reviewing our decision in N.E. Brickmaster v. Town of Salem, 133 N.H. 655, 582 A.2d 601 (1990), the superior court found the SDC to be an illegally assessed growth impact fee. In Brickmaster, we construed the provisions of RSA chapter 674 governing the local land use planning and regulatory powers of municipalities and their local land use boards. See id. at 658-60, 582 A.2d at 602-04. We considered whether the express statutory authority granted to local land use boards to condition development approval on the provision of on- and off-site improvements included authority to condition development approval upon payment for off-site improvements. We did find such authority, so long as the condition bore a rational nexus to the development. Id. at 663-64, 582 A.2d at 606; see also Blevens v. Manchester, 103 N.H. 284, 286, 170 A.2d 121, 122-23 (1961) ().
RSA chapter 38 contains no comprehensive authorization analogous to that found in RSA chapter 674. At least until 1991, the board was empowered by statute only to charge "reasonable tolls" for supplying its customers with water service. RSA 38:15 (1988). "Tolls" are not defined in the chapter. We give a statutory term that is not defined its plain and ordinary meaning. Barksdale v. Town of Epsom, 136 N.H. 511, 514, 618 A.2d 814, 816 (1992). The plain and ordinary meaning of "toll" when used regarding the provision of water service is "a compensation taken for services rendered." Webster's Third New International Dictionary 2405 (unabridged ed. 1961). A fee imposed to offset the cost of improvements designed to meet the needs occasioned by present and future growth does not fit within this definition. 83 Am.Jur.2d Zoning and Planning § 562, at 450 (1992) (footnotes omitted). We hold that the board lacked authority to impose the SDC upon new users of the water system.
In 1991, the legislature amended RSA chapter 674 to authorize localities to impose impact fees. Laws 1991, 283:1-3; RSA 674:21, I(m) (Supp.1994). This authorization includes fees that would finance "construction or improvement of capital facilities owned or operated by the municipality, including ... water treatment and distribution facilities." RSA 674:21, V (Supp.1994). This section would authorize the imposition of a new SDC, as long as the...
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