City of Brooklyn Center v. Metropolitan Council, s. 44888 and 45159

• Decision Date: 12 December 1975
• Docket Number: Nos. 44888 and 45159,s. 44888 and 45159
• Citation: 243 N.W.2d 102,306 Minn. 309
• Parties: CITY OF BROOKLYN CENTER, et al., Plaintiffs, Village of Burnsville, et al., intervenor, Plaintiffs, Appellants, v. METROPOLITAN COUNCIL, etc., et al., Respondents, Village of Arden Hills, et al., intervenors, Respondents, Village of New Germany, et al., intervenors, Respondents, Village of Hanover, involuntary defendant, Respondent, Village of Medicine Lake, involuntary defendant, Respondent, Town of Blakeley, et al., involuntary defendants, Respondents, City of Bloomington, involuntary defendant, Respondent, Village of Newport, involuntary defendant, Respondent, Village of Orono, et al., involuntary defendants, Respondents, Village of Rockford, involuntary defendant, Respondent, City of St. Paul, involuntary defendant, Respondent, City of Shakopee, involuntary defendant, Respondent, Village of Mayer, involuntary defendant, Respondent, City of Minnetonka, involuntary defendant, Respondent, Village of Maple Plain, involuntary defendant, Appellant.
• Court: Minnesota Supreme Court

Page 102

243 N.W.2d 102

306 Minn. 309

CITY OF BROOKLYN CENTER, et al., Plaintiffs Village of Burnsville, et al., intervenor, Plaintiffs, Appellants, v. METROPOLITAN COUNCIL, etc., et al., Respondents Village of Arden Hills, et al., intervenors, Respondents Village of New Germany, et al., intervenors, Respondents Village of Hanover, involuntary defendant, Respondent, Village of Medicine Lake, involuntary defendant, Respondent, Town of Blakeley, et al., involuntary defendants, Respondents, City of Bloomington, involuntary defendant, Respondent, Village of Newport, involuntary defendant, Respondent, Village of Orono, et al., involuntary defendants, Respondents, Village of Rockford, involuntary defendant, Respondent, City of St. Paul, involuntary defendant, Respondent, City of Shakopee, involuntary defendant, Respondent, Village of Mayer, involuntary defendant, Respondent, City of Minnetonka, involuntary defendant, Respondent, Village of Maple Plain, involuntary defendant, Appellant.

Nos. 44888 and 45159.

Supreme Court of Minnesota.

Dec. 12, 1975.

Rehearing Denied April 16, 1976.

As Amended May 6, 1976.

Syllabus by the Court

1. The method of unused capacity cost allocation and collection for treatment plants and interceptors in the metropolitan sewer service system adopted for use in 1973 and thereafter:

(a) Is authorized by and consistent with the principles enunciated in Minn.St.1971, § 473C.08, subd. 3;

(b) Is authorized by and consistent with the principles enunciated in Minn.St.1971, § 473C.08, subd. 4, so long as the December 5, 1973, motion passed by the Metropolitan Sewer Service Board limiting costs to be imposed on sewer service areas is adhered to and, if subjected to challenge on the basis of experience, can be shown to have properly limited the costs it is designed to limit;

(c) Is not, in this case, arbitrary, unreasonable, inequitable, or unfair.

2. Resolution of the question of statutory authority for the 1973 cost allocation formula in response to a motion for summary judgment was proper.

3. Appellants' claim that payment of charges pursuant to the 1973 cost allocation formula should have been deferred until final disposition of the declaratory judgment action need not be addressed.

4. No reservation of unused interceptor capacity was made for the village of Maple Plain during the period in question. Accordingly, the village is not liable for any

costs attributable to interceptor unused capacity, and is entitled to a return of monies so paid, if any, with interest. Minn.St.1971, § 473C.08, subd. 4.

Schieffer, Hadley, Bakke & Jensen and Richard J. Schieffer, Minneapolis, for appellants.

Dorsey, Marquart, Windhorst, West & Halladay and John D. Levine and Thomas S. Hay, Minneapolis, William F. Kelly, Excelsior, Walter S. Johnson, Buffalo, John M. Miller, Minneapolis, Robert O'Neill, New Prague, Gary Gandrud, City Atty., Bloomington, Fred N. Peterson, St. Paul, G. Marc Whitehead, Minneapolis, Philip Perkins, Maple Lake, R. Scott Davies, City Atty., St. Paul, Julius Coller, II, Shakopee, William F. Kelly, Excelsior, Carl Dever, Minnetonka, Schieffer, Hadley, Bakke & Jensen, Minneapolis, for respondents.

Considered and decided by the court en banc.

SHERAN, Chief Justice.

Appeals from a judgment and an intermediate order entered in a declaratory judgment proceeding brought to determine the statutory validity of a formula adopted by the Metropolitan Sewer Service Board (Board) ¹ and approved by the Metropolitan Council (Council) ² for the allocation and collection of debt service costs for the unused capacity of treatment works and interceptors in the metropolitan sewage disposal system. Affirmed in part; reversed in part. ³

Reacting to a recognized need for coordinating local governmental operations in the St. Paul-Minneapolis metropolitan area, the Minnesota Legislature established the Metropolitan Council in 1967 to deal with longrange planning problems common to the region. ⁴ In 1969, the legislature enacted the so-called Metropolitan Sewer Service Act (Act) ⁵ to deal with water pollution and sewage disposal in the metropolitan area, placing administrative responsibility in the Board.

Appellants are municipalities located within the metropolitan sewage disposal system who are seeking relief against the Board, Council, and other municipalities within the system. Appellants allege that they have been wrongly affected by actions of the Board and Council involving distribution of the cost incurred on account of metropolitan treatment works and interceptors ⁶ in existence, but not presently used. ⁷

Under the Act, the Council and the Board are given broad authority ⁸ to implement the legislative purpose and policy. ⁹ Also pertinent here is § 473C.08 of the Act, which relates to the allocation of costs among the local government units within the waste disposal system and grants to the Board authority to adopt whatever means of allocating costs as may be fair, reasonable, and equitable.

In the first years of the system's operation, budget years 1971 and 1972, the total amount of reserve capacity ¹⁰ set aside for all local units of government was determined, generally, by estimating the probable future sewage disposal requirements of the individual units through the year 2000, or whenever, before that time, attainment of a unit's full growth was predicted. To the extent that actual flow increased, and barring other alterations in assessment of reserve capacity, a unit's reserve capacity was reduced each year.

Experience under this formula proved unsatisfactory to the Board. In December 1972, the Board announced a new method for allocation and collection of costs attributable to reserve capacity. This new 'Service Availability Charge' method (SAC) involved the placing of all reserved capacity costs in one cost pool. Each system municipality would then collect a connection charge from the builder for each building permit issued on new construction and each sewer permit issued for connection of old construction. The change to the SAC method of allocating costs resulted in the present controversy. The order and judgment from which the appeals have been taken constitute a determination by the trial court that SAC is permitted by law.

The essential questions for decision on this appeal are:

(1) Whether SAC fulfills the statutory directive that local units of government pay the costs for unused system capacity 'in proportion to the amounts of such capacity reserved for each of them.' Minn.St.1971, § 473C.08, subd. 3;

(2) Whether SAC complies with Minn.St.1971, § 473C.08, subd. 4, which requires 'allocation of current costs * * * for estimated unused capacity in the service area interceptors among local government units in the service area for which unused capacity therein has been reserved, in the same manner as that provided in subdivision 3';

(3) Whether the Board and Council acted arbitrarily and unreasonably in adopting SAC, assuming statutory authority for SAC's adoption;

(4) Whether the rights of the local units of government were prejudiced by the trial court's reaching an affirmative answer to (1) and (2) and granting the Board's motion for summary judgment, or by the trial court's determining that the costs so allocated were required to be paid pending complete resolution of the issues raised.

1. The first issue raises a question as to the meaning of the words 'in proportion to the amounts of such capacity reserved for each of them' in the Act. ¹¹ We are persuaded of the merit in respondents' claim that these key words do not constitute a precise statutory formula for allocating debt service costs of unused capacity because:

(1) The amount of debt service costs to be assigned to treatment works requires an exercise of judgment, involving allocation of Federal grants and total debt service, on the part of the Board and Council;

(2) The Board and Council must exercise judgment in deciding whether unused treatment works capacity is to be reserved to municipalities on a facility-by-facility basis, or on a system basis;

(3) The Board and Council must exercise judgment in making long-range estimates of future demand for sewage outlets;

(4) The Board and Council must exercise judgment in identifying the stage of system development at which reserve treatment works capacity is to be attributed to a municipality within the system.

Our cases place upon appellants the burden of showing error. Similarly, unless the record shows affirmatively to the contrary on appeal a presumption of correctness attaches to the actions of the court below. See, 1B Dunnell, Dig. (3 ed.) §§ 368, 370, 374.

We cannot agree with appellants that the crucial language of § 473C.08, subd. 3, clearly requires, to the exclusion of any other method, the employment of the cost allocation method used by the Board in 1971 and 1972. In the absence of clearer legislative direction than we find in the statute, or in the history of the Act, ¹² we are not persuaded that the trial court erred in deciding that the costs allocation concept known as SAC is within the bounds of the law.

Given the numerous variables involved in planning and operating a metropolitan sewer system, ¹³ it seems reasonable to us to conclude that the legislature intended to vest considerable discretion as to the precise method of allocating reserve capacity costs in those persons charged with the system's well-being to determine the precise method of allocating reserve capacity costs. Certainly the Board's grant of authority was broad. Minn.St.1971, § 473C.15, subd. 1 bestows on the Board 'all powers which may be necessary or convenient' to the discharge of its duties. A further demonstration of the legislature's intent to give the Board fairly broad powers can be found in Minn.St.1971, § 473C.08, subd. 8, which, in some situations at least, authorizes the Board to adopt 'such other means and methods of allocating costs * * * as may be...