City of Dunedin v. Contractors and Builders Ass'n of Pinellas County

• Decision Date: 30 April 1975
• Docket Number: 74--1017,Nos. 74--401,s. 74--401
• Citation: 312 So.2d 763
• Parties: CITY OF DUNEDIN, Florida, Appellant, v. CONTRACTORS AND BUILDERS ASSOCIATION OF PINELLAS COUNTY, a Florida Corporation, et al., Appellees. CONTRACTORS & BUILDERS ASSOCIATION OF PINELLAS COUNTY, a Florida Corporation, et al., Appellants, v. CITY OF DUNEDIN, Florida, Appellee.
• Court: Florida District Court of Appeals

Page 763

312 So.2d 763

CITY OF DUNEDIN, Florida, Appellant, v. CONTRACTORS AND BUILDERS ASSOCIATION OF PINELLAS COUNTY, a Florida Corporation, et al., Appellees.

CONTRACTORS & BUILDERS ASSOCIATION OF PINELLAS COUNTY, a Florida Corporation, et al., Appellants, v. CITY OF DUNEDIN, Florida, Appellee.

Nos. 74--401, 74--1017.

District Court of Appeal of Florida, Second District.

April 30, 1975.

Rehearing Denied June 10, 1975. Judgment Vacated 330 So.2d 744.

C. Allen Watts of Fogle & Watts, DeLand, for appellant/appellee City of Dunedin.

John T. Allen, Jr., St. Petersburg, for appellees/appellants Contractors and Builders Assn., et al.

Ralph A. Marsicano, Tampa, and Burton M. Michaels, Tallahassee, for amicus curiae, Florida League of Cities, Inc.

GRIMES, Judge.

This case involves the authority of a municipality to charge a so-called 'impact fee' for the privilege of connecting to tis water and sewer systems.

The City of Dunedin (city) passed certain ordinances which imposed a fee of $325 for each water connection and $375 for each sewer connection 'to defray the cost of production, distribution, transmission and treatment facilities for water and sewer provided at the expense of the City of Dunedin.' These fees were in addition to charges imposed for the cost of physically connecting into the systems. Certain local contractors, together with the Contractors and Builders Association of Pinellas County, filed suit seeking declaratory and injunctive relief against the imposition of these fees. The final judgment stated in part:

'The City of Dunedin is enjoying, or suffering, depending upon one's viewpoint, growth problems. The demand for sewer and water connections has strained the capabilities of the sewer and water departments to near the breaking point. Attempting to cope with the demand for sewer and water connections, the City adopted Ordinance 72--26, which as amended assessed against new connections a total 'impact fee' of approximately $700.00 for dwelling or commercial units.

'. . . The salutory purpose of Ordinance 72--26 strikes a sympathetic chord with the Court. Implicit in the ordinance is the philosophy that those who are creating the inordinate demand for services ought to bear the prime cost of the same. . . .'

However, the court concluded that the city was without authority to impose the fees and entered a judgment enjoining their collection.

There are three reported Florida decisions dealing with a form of impact fee. The cases of Venditti-Siravo, Inc. v. City of Hollywood, 1973, 39 Fla.Supp. 121, and Janis Development Corp. v. City of Sunrise, 1973, 40 Fla.Supp. 41, dealt with ordinances which imposed a surcharge on building permits. The funds derived by the surcharge in Venditti were to be used for acquiring and developing parks, and the funds collected in Janis were to be used for roads. Hence, there was only a nebulous relationship between the subject upon which the charge was being imposed and the facilities for which the money was going to be spent. In each case the court properly characterized the fee as a tax which was beyond the city's authority to impose. In Pizza Palace of Miami, Inc. v. City of Hialeah, Fla.App.3d, 1970, 242 So.2d 203, our sister court held that a sewer connection fee could not be charged against a lessee because the ordinances of the city provided that the owner had the responsibility for connecting to the sewer lines. The court pointed out that it was unnecessary to its decision to pass upon the validity of the sewer connection charge itself. Thus, it is evident that the case Sub judice is a case of first impression in Florida.

The imposition of fees such as those in this case have been upheld in several other jurisdictions. ¹ In Brandel v. Civil City of Lawrenceburg, 1967, 249 Ind. 47, 230 N.E.2d 778, the court sustained an ordinance setting a $200 fee for those who connected to a new section of the sewage system and a $62.50 fee for those who connected to the old sewage system. The court noted that the fee was in the nature of a 'use tax' for the 'services' of disposing of sewage from particular property. The court rejected a charge of discrimination, pointing out that the original cost of the old system was less than that of the new system and, therefore, it was logical that the charges for its use would be less than those for the use of the new system.

In Hartman v. Aurora Sanitary District, 1961, 23 Ill.2d 109, 177 N.E.2d 214, the District established a capital improvement fund for the purpose of building new sewage facilities to be financed by a $160 connection fee charged for connections in recently annexed territories. The connection fee for the original territory of the District was $15. In upholding the $160 fee, the court said:

'. . . It is patent that the rapid expansion of our municipalities has rendered inadequate prior facilities developed for the health and welfare of the community. It is only proper that all citizens of the community should share equally in the cost of maintaining a sanitary plant which benefits the health and welfare of the entire community by the proper disposal of sewage. It would seem equally fair that those property owners who benefit especially, not from the maintenance of the system, but by the extension of the system into an entirely new area, should bear the cost of that extension. . . .'

A city ordinance raising the sewer connection charge for single family dwellings from $25 to $255 was attacked in Hayes v. City of Albany, 1971, 7 Or.App. 388, 490 P.2d 1018. The money was earmarked for the construction and expansion of the city's sanitary sewer system. The plaintiff contended the ordinance was invalid as being a tax and further argued that even though it be considered a 'user charge' it was void because it was not 'just and equitable.' In upholding the ordinance, the Oregon court distinguished several adverse decisions on the basis that in those cases the funds collected could be used for general public purposes, whereas the proceeds from the sewer connection charge were limited to the development and maintenance of the sewage disposal system. The court concluded that the city had the power to make a charge reasonably commensurate with the burden currently imposed or reasonably anticipated upon the system.

One of the most recent cases on the subject is Home Builders Association of Greater Salt Lake v. Provo City, 1972, 28 Utah 402, 503 P.2d 451, in which the City of Provo enacted an ordinance imposing a sewer connection fee for each living unit in newly constructed buildings. The purpose of the fee, which admittedly exceeded the cost of inspection and connection, was to provide the requisite funds to improve and enlarge the sewer system. In sustaining the ordinance, the court held that the fee was neither a tax nor an assessment but a payment for services furnished.

While many parts of this country are experiencing growth...