City of Baxter v. City of Brainerd, A19-0097
| Decision Date | 15 July 2019 |
| Docket Number | A19-0097 |
| Citation | 932 N.W.2d 477 |
| Parties | CITY OF BAXTER, Respondent, v. CITY OF BRAINERD, et al., Appellants. |
| Court | Minnesota Court of Appeals |
George C. Hoff, Jared D. Shepherd, Hoff Barry, P.A., Eden Prairie, Minnesota (for respondent)
John M. Baker, Holley C. Horrell, Greene Espel PLLP, Minneapolis, Minnesota (for appellants)
Considered and decided by Larkin, Presiding Judge; Bratvold, Judge; and Slieter, Judge.
The City of Brainerd and Brainerd Public Utilities Commission (BPUC) challenge the district court’s determination that the City of Baxter may impose a revenue-raising franchise fee on a municipally-owned utility. Because Baxter does not have statutory authority to impose its franchise fee on BPUC, we reverse and remand.
Baxter, a statutory city,1 adopted an ordinance (ordinance 2016-0232 ) that imposed a revenue-raising franchise fee solely on BPUC to fund Baxter’s pavement management and street- and traffic-lighting activities.3 Baxter sought to enforce ordinance 2016-023 on Brainerd and BPUC by an action for: (1) a declaratory judgment pursuant to Minn. Stat. § 550.02 (2018), (2) an accounting, and (3) unjust enrichment. On cross-motions for summary judgment, the district court ruled that Baxter permissibly applied ordinance 2016-023 against BPUC in accordance with Baxter’s statutory authority. The parties stipulated to entry of final judgment, and Brainerd and BPUC appealed. The issues before this court are purely legal questions, and the facts are undisputed.
In 1892, Brainerd established a utility to provide light and power. Via Brainerd’s 1908 city charter, it operated the utility as the Brainerd Water and Light Department (BWLD) with a three-member board. In 1935, the BWLD extended its utility service into an area that incorporated as Baxter four years later.
On May 17, 1975, the Minnesota Public Service Commission, now known as the Minnesota Public Utilities Commission (MPUC), assigned BWLD to be one of the exclusive providers of retail electric services to customers in Crow Wing County.4 This assignment order established an ongoing obligation that BWLD, and its successor BPUC, provide electricity in the northeastern portion of Baxter adjacent to Brainerd, both of which are in Crow Wing County.5
In 1985, Brainerd amended its city charter to establish BPUC and provided BPUC the responsibilities of the BWLD. Brainerd authorized BPUC to control, operate and manage its electrical service within the city. BPUC has the power to institute, prosecute and defend, in the name of Brainerd as it deems appropriate.
In 2013, Baxter commissioned a Pavement Management Plan study (PMP) about maintenance and funding of its city streets. The PMP determined Baxter needed to increase its maintenance budget for road infrastructure, and it identified utility-franchise fees as a possible funding source. Baxter requested that BPUC enter into a franchise agreement for BPUC’s occupation and use of Baxter’s right-of-way and BPUC’s utility service to Baxter residents. BPUC never consented to a franchise agreement.
Baxter notified BPUC of its intention to adopt a franchise-fee ordinance pursuant to Minn. Stat. §§ 216B.02, and .36 (2018). Baxter identified its intent to use the franchise-fee funds for pavement management and street- and traffic-lighting activities.
After multiple city council meetings, Baxter adopted ordinance 2016-023, imposing its franchise fee on BPUC. The purpose section of ordinance 2016-023 provides:
The Baxter City Council has determined that it is in the best interest of the City to impose a franchise fee on those public utility companies that provide electric energy services within the City of Baxter to fund pavement management related and street and traffic lighting related activities.
Baxter’s ordinance 2016-023 identified Minn. Stat. § 301B.01 (2018), as its statutory authority to impose the franchise fee on BPUC. The franchise fee imposed on BPUC was determined by applying the following schedule per customer premise/per month for metered service within Baxter:
Class: Monthly Fee
Residential $3.00
Commercial $13.00
Demand $52.00
Large Power $138.00
Ordinance 2016-023 does not identify that Baxter is requiring a franchise from appellants. In a letter dated June 9, 2016, Baxter provided ordinance 2016-023 to BPUC noting the ordinance became effective 60 days after receipt. On August 8, 2016, ordinance 2016-023 became effective.
BPUC began to collect the franchise fee from their customers in accordance with ordinance 2016-023. BPUC made payment to Baxter, but Baxter determined the payments did not satisfy the amount owed.
On December 14, 2017, Baxter filed a complaint in Crow Wing County District Court against Brainerd and BPUC seeking enforcement of the franchise fee. Brainerd and BPUC argued Baxter lacks statutory authority to enforce ordinance 2016-023. Baxter cited Minn. Stat. §§ 216B.36, 222.37, subd. 1, 301B.01, and the district court denied Brainerd and BPUC’s motion for summary judgment, and it granted Baxter’s motion for partial summary judgment, declaring that Baxter may impose a franchise fee pursuant to Minn. Stat. §§ 216B.36, 301B.01, or 412.321, subd. 3.6 The parties stipulated to entry of final judgment. This appeal follows.
Did the district court err by concluding that the franchise fee is authorized?
"We review the grant of summary judgment de novo to determine whether there are genuine issues of material fact and whether the district court erred in its application of the law." Montemayor v. Sebright Prods., Inc. , 898 N.W.2d 623, 628 (Minn. 2017) (quotation omitted); see also Hanbury v. Am. Family Mut. Ins. Co. , 865 N.W.2d 83, 85-86 (Minn. App. 2015) (), review denied (Minn. Aug. 25, 2015). "[W]e may affirm a grant of summary judgment if it can be sustained on any grounds." John Doe 76C v. Archdiocese of St. Paul , 817 N.W.2d 150, 163 (Minn. 2012). Matters of statutory interpretation are also reviewed de novo. Cocchiarella v. Driggs , 884 N.W.2d 621, 624 (Minn. 2016).
A statutory city "has no inherent powers beyond those expressly conferred by statute or implied as necessary in aid of those powers which have been expressly conferred." Harstad v. City of Woodbury , 916 N.W.2d 540, 545 (Minn. 2018) (quotation omitted). If no statutes provide authority for a statutory city to act in a particular way, the city’s actions are improper. See Mathews v. City of Village of Minnetonka Beach , 899 N.W.2d 881, 883 (Minn. App. 2017) ().
Baxter relies on four statutes as authority to impose its revenue-raising franchise fee on BPUC. When addressing statutory authority, Minn. Stat. § 645.16 (2018). "If the meaning of a statute is unambiguous, we interpret the statute’s text according to its plain language." Brua v. Minn. Joint Underwriting Ass'n , 778 N.W.2d 294, 300 (Minn. 2010). We use Minn. Stat. § 645.08 (2018) to determine a statute’s plain meaning. Laase v. 2007 Chevrolet Tahoe , 776 N.W.2d 431, 435 (Minn. 2009). We address each statute in turn.
Baxter argues it has authority to enforce its franchise fee by ordinance pursuant to chapter 216B because: (1) a franchise fee may be imposed on a municipal utility providing service outside its border, and (2) BPUC is a separate entity from Brainerd and is therefore a "public utility." Baxter’s theories are unavailing because they are inconsistent with the statute’s plain language.
Pursuant to Minn. Stat. § 216B.36, a public utility that furnishes utility services to a municipality "may be required to obtain a license, permit, right, or franchise in accordance with the terms, conditions, and limitations of regulatory acts of the municipality, including the placing of distribution lines and facilities underground." This requirement may include that the public utility "pay to the municipality fees to raise revenue or defray increased municipal costs accruing as a result of utility operations, or both." Minn. Stat. § 216B.36.
The legislature included a specific definition for "public utility" in chapter 216B applicable to section 216B.36, and that definition excludes municipalities. See Minn. Stat. § 216B.02, subds. 1, 4 (). We have concluded that the statute’s language, on its face, "mandates that municipal utilities are excepted from regulation under chapter 216B, ‘except as specifically provided herein.’ " In re Comm'n’s Jurisdiction Over Hutchinson’s Intrastate Nat. Gas Pipeline , 707 N.W.2d 223, 227 (Minn. App. 2005) (Hutchinson ) (quoting Minn. Stat. § 216B.01 ), review denied (Minn. Mar. 14, 2006); cf. N. Nat. Gas Co. v. Minn. Pub. Serv. Comm'n , 292 N.W.2d 759, 763-64 (Minn. 1980) ().
Baxter acknowledges that the legislature excluded municipal utilities from regulation under chapter 216B but asserts two grounds for this court to extend the scope of the statute to permit the revenue-raising fee pursuant to chapter 216B: (1) BPUC is operating its utility outside its municipality’s border, and (2) BPUC should not be recognized as a municipal utility.
Baxter’s first theory—which challenges the legislature’s policy decision—does not have support in the statute’s language. "[T]his court cannot add to a statute what the legislature has either purposefully omitted or inadvertently overlooked." Christiansen...
To continue reading
Request your trial
-
In re Enbridge Energy, Ltd. P'ship
...are not free to add language that the commission has not included in the applicable rules. Cf., e.g., City of Baxter v. City of Brainerd, 932 N.W.2d 477, 483 (Minn. App. 2019) ("This court cannot add to a statute what the legislature has either purposefully omitted or inadvertently overlook......
- In re Disciplinary Action Against Izek, A18-1782