Brittany Park Apartments v. Harrison Charter Tp.

• Decision Date: 24 July 1989
• Docket Number: 82163,Nos. 82162,s. 82162
• Citation: 443 N.W.2d 161,432 Mich. 798
• Parties: BRITTANY PARK APARTMENTS, a Michigan copartnership and Brittany Park Apartments II, a Michigan co-partnership, individually and Parkway South Apartments, Parkway South Apartments II, San Remo Villa Apartments, Clinton Manor Apartments, and Metro Tower Associates, a Michigan co-partnership, Plaintiffs-Appellees, v. HARRISON CHARTER TOWNSHIP, Defendant-Appellant. 432 Mich. 798, 443 N.W.2d 161
• Court: Michigan Supreme Court

Page 161

443 N.W.2d 161

BRITTANY PARK APARTMENTS, a Michigan copartnership and Brittany Park Apartments II, a Michigan co-partnership individually and Parkway South Apartments, Parkway South Apartments II, San Remo Villa Apartments, Clinton Manor Apartments, and Metro Tower Associates, a Michigan co-partnership, Plaintiffs-Appellees, v. HARRISON CHARTER TOWNSHIP, Defendant-Appellant.

Nos. 82162, 82163.

432 Mich. 798, 443 N.W.2d 161

Supreme Court of Michigan.

Argued Dec. 7, 1988.

Decided July 24, 1989.

[432 MICH 800] Evans & Luptak by D. Michael Kratchman, John A. Kullen, Detroit, for plaintiffs-appellees, Brittany Park Apartments, Brittany Park Apartments II, Parkway South Apartments, Parkway South Apartments II, San Remo Villa Apartments and Clinton Manor Apartments.

Peterson, Hay & Comsa, P.C. by Mark L. Pope, Mt. Clemens, for defendant-appellant.

Bauckham, Reed, Sparks, Rolfe & Thomsen, P.C. by Patricia Mason, Kenneth C. Sparks, Kalamazoo, for amicus curiae, Mich. Townships Ass'n.

OPINION

BRICKLEY, Justice.

The dispute in this case requires us to examine the constitutionality of Harrison Township Ordinance No. 100 which establishes inter alia the rate structure for the municipality's water and sewage system. Leave to appeal was granted limited to:

(1) whether defendant's rate structure charging a base rate per residential unit denies plaintiff apartment complexes equal protection of law; and

(2) whether defendant's rate ordinance which limits no charges for periods of vacancy to units served by separate meters denies plaintiffs equal protection of law. ¹ [430 Mich. 891, 425 N.W.2d 77 (1988).]

We hold that the ordinance is reasonable and rationally related to the objectives of the township. Accordingly, the ordinance is constitutional and plaintiffs were not denied equal protection of the law.

In 1968, the Charter Township of Harrison assumed the ownership and operation of the township's water and sewage system originally operated by the City of Mt. Clemens. At the same time, it adopted the rate structure followed under the city ownership enacting Township Ordinance No. 100. The categories of billable users under the ordinance include: (1) residential users, (2) commercial users, (3) industrial users, and (4) public authority. The ordinance defines a single-family dwelling unit for billing practices as

any structure or part thereof containing within its separate confines all necessary facilities for the use thereof as a dwelling place for human habitation, and including, but not necessarily limited to, a single family home, a dwelling unit within a multiple unit housing structure, and a mobile home (trailer coach). [Harrison Township Ordinance No. 100, Sec. 2.6(5)(A).]

Plaintiffs are owners and operators of multiunit housing structures located in Harrison Township. According to the definitions plaintiffs are included within the residential customer billing category.

Pursuant to the ordinance, all single-family dwelling units are charged a quarterly minimum rate for water and sewage consumption. Water consumed in excess of this minimum usage is billed at a declining block rate. ² When an apartment owner chooses not to individually meter each apartment unit, making it impossible to separately bill each unit, it is charged the minimum fee, multiplied by the number of units, but is allowed to combine all of the water usage in excess of the aggregate minimum fee as though the apartment building was one unit.

Plaintiffs challenge the constitutionality of defendant's practice of charging a multiminimum rate because, it is claimed, it results in a differential in the billing rates of residential customers. Brittany Park argues that the disparate treatment among the class of residential users is the result of the establishment of two subclasses within the residential category. The first class is that of multiunit housing structures that have only one meter, but are charged an aggregate minimum rate. The second subclass is that of a detached single-family dwelling which is charged only one minimum rate. Plaintiffs assert that the removal of the multiple-minimum charge for each unit would eliminate the disparity in the billing between multiple- and single-unit dwellings.

Further, Metro Towers argued that the rate structure violates its equal protection rights because there was no provision within the ordinance to account for the vacancy of a unit within an apartment complex. The differential treatment results from the fact that a detached single-family dwelling can terminate its service by having its meter shut off, while multihousing structures not individually metered are not afforded such an alternative.

The Court of Appeals accepted the arguments submitted by plaintiffs and reversed the trial court's order granting summary disposition in favor of defendant. The Court of Appeals found that although the ordinance has a legitimate purpose, in practice the rate structure is not fair or uniform when an examination of the rates showed that apartment owners were paying more for the same service than other members within the class of residential customers. The Court concluded that the disparity in the costs of services between apartment owners and single-dwelling units coupled with the fact that the township incurred no additional expenses in providing water and sewage service to such customers, did not support the legitimate goal of the ordinance. The Court of Appeals stated that "[i]f plaintiffs are in the same classification as single family homes, the rates should be equal." ³ We find that the Court of Appeals based its rationale and conclusion on erroneous assumptions about both the classification and the treatment of those within it.

The township is the sole source of water within the community and it is undisputed that the municipality has a right to charge for the services it provides to the community. Further it has the right to rationally impose classifications upon its users so long as all persons within the class are treated alike. Rouge Parkway Associates v. City of Wayne, 423 Mich. 411, 377 N.W.2d 748 (1985). The standard of review of the classification under an equal protection challenge is that the ordinance is presumed constitutional. The burden is upon the party challenging the legislation to show that the classification established is not rationally related to a legitimate state interest. See, generally, Cook Coffee Co. v. Village of Flushing, 267 Mich. 131, 255 N.W. 177 (1934), and Detroit v. Highland Park, 326 Mich. 78, 39 N.W.2d 325 (1949). Under the rational basis test there must be a showing that the ordinance is discriminatory and arbitrary, and that its classifications are without reasonable justification.

There is no dispute over the applicable test to be applied in this case. It is derived from this Court's decision in Alexander v. Detroit, 392 Mich. 30, 219 N.W.2d 41 (1974), wherein we enumerated a two-part test to be applied in an equal protection challenge to a legislative enactment. The questions to be considered are:

(1) Are the enactment's classifications based on natural distinguishing characteristics and do they bear a reasonable relationship to the object of the legislation?

(2) Are all persons of the same class included and affected alike or are immunities or privileges extended to an arbitrary or unreasonable class while denied to others of like kind? [Id. at 35-36, 219 N.W.2d 41 (citations omitted).]

Reaffirmed in Rouge Parkway Associates v. City of Wayne, supra.

Uniformity among users is the ultimate goal strived for by the ordinance. ⁴ The plaintiffs do not complain about the distinction between the separate classifications, but rather that the users classified as "residential" are not treated uniformly within their classification. The standard of rationality requires that persons within a class be treated objectively and reasonably. Reasonable, however, does not mean exact. "Perfect equality among users is not the standard of municipal duty in fixing sewer rates." 61 A.L.R.3d, Municipalities--Sewer Use Rates, Sec. 3[d], p. 1259.

The word reasonable is " 'not subject to mathematical computation with scientific exactitude but depends upon a comprehensive examination of all factors involved, having in mind the objective sought to be attained in its use.' " Land v. City of Grandville, 2 Mich.App. 681, 689, 141 N.W.2d 370 (1966), ⁵ quoting Meridian Twp. v. East Lansing, 342 Mich. 734, 71 N.W.2d 234 (1955).

Classifications utilized by this ordinance, residential, commercial, etc., are based not on the structure to which water is pumped, but on the type of occupant and the purpose and nature of its use. Having built the residential rate structure on the classification of a single-family dwelling and "any structure or part thereof containing within its separate confines all necessary facilities for the use thereof as a dwelling place for human habitation," the billing of individual apartment units on the same basis and at the same rate as that of a single-family dwelling cannot be questioned. As a matter of fact, the city ordinance rate system is structured to provide the same billing and rate to each single-family unit within a multiple structure on the basis of the water usage metered to that unit as would apply to a single-family structure. This then is not the source of the dispute.

Rather it is occasioned by the fact that plaintiff apartment owners have chosen not to individually meter their apartment units, claiming it would be an "architectural nightmare" to do so. The defendant has accommodated this reality by a variation which allows the apartment building owners to be billed by the use of a single meter, thus saving them the costs of the individual metering. Therefore, consistent with its single-family residential-family classification, as previously described, it charges the apartment owner an aggregate minimum fee based on the number of...