City of Gary v. Stream Pollution Control Bd. of State of Ind.

• Decision Date: 17 June 1981
• Docket Number: No. 3-280A62,3-280A62
• Citation: 422 N.E.2d 312
• Parties: 12 Envtl. L. Rep. 20,034 CITY OF GARY, Appellant (Defendant Below), v. STREAM POLLUTION CONTROL BOARD OF the STATE OF INDIANA, Appellee (Plaintiff Below).
• Court: Indiana Appellate Court

Page 312

422 N.E.2d 312

12 Envtl. L. Rep. 20,034

CITY OF GARY, Appellant (Defendant Below), v. STREAM POLLUTION CONTROL BOARD OF the STATE OF INDIANA Appellee (Plaintiff Below).

No. 3-280A62.

Court of Appeals of Indiana, Fourth District.

June 17, 1981.

Charles A. Ruckman, Corporation Counsel, Gary, for appellant (defendant below).

Linley E. Pearson, Atty. Gen. of Indiana, Jeff G. Fihn, Deputy Atty. Gen., Indianapolis, for appellee (plaintiff below).

MILLER, Judge.

The City of Gary (City) appeals the trial court's issuance of a preliminary injunction mandating either its compliance with an agreed order entered into with the Stream Pollution Control Board (Board) governing the operation of a certain solid waste disposal site (otherwise referred to herein as "sanitary landfill") or their cessation of the operation of such site in a manner which does not comply with the agreed order pending final hearing. The City argues the State of Indiana, through the Board, is estopped from enforcing the order due to the State's refusal, through the State Board of Tax Commissioners, to approve "excessive" tax levies sufficient to fund proper operation of the landfill. The Board argues financial inability is not a defense to noncompliance and does not equitably estop enforcement of the agreement. We affirm.

FACTS

On June 21, 1977, the Board filed a verified complaint for preliminary and permanent injunctions against the City seeking the latter's compliance with an order, adopted by the Board and agreed to by the City in October of 1975, dictating standards for operation of a refuse disposal facility located in Gary, Indiana. The complaint alleged the City failed to comply with several items in the order, including the following provision:

"That the City of Gary may until June 1, 1976, continue the operation of the refuse disposal site ..., provided all of the following specific conditions are met from the date of the order to June 1, 1976:

1. All refuse will be compacted on a slope of between 3:1 and 5:1 and covered with six inches of impermeable soil on the day such refuse is deposited, except that refuse deposited after 5:00 p.m., will be compacted and covered on the following morning."

Other alleged violations of the order consisted of failure to 1) prevent blowing paper from leaving the work face; 2) submit specified plans, contracts and studies regarding various aspects of operation and management; 3) prepare and submit notification for inspection of a refuse trench; 4) apply six inches of clay soil to certain areas and to construct an all-weather road; and 5) submit monthly reports discussing a) analysis of samples, b) breakdown of landfill equipment and c) progress made toward obtaining additional funds for daily operations in 1976 and for the purchase of clay soil.

On July 11, 1977, the date initially scheduled for a hearing on the complaint for a preliminary injunction, the parties testified to a proposal governing operation of the site and agreed to a 120 day continuance during which time the City would attempt to bring the landfill into compliance. Further action was not taken in the cause until September 25, 1978 when the court, on its own motion, issued a rule to show cause why the action should not be dismissed pursuant to Ind. Rules of Procedure, Trial Rule 41(E). The Board responded by requesting the court to retain jurisdiction alleging the parties were then negotiating a final settlement. Apparently a final settlement was never reached. The cause was set for hearing on January 29, 1980, and on January 25, 1980 the City filed an answer denying its failure to comply with the 1975 order and affirmatively alleging the State's failure to provide funding through approval of excessive tax levies.

At the hearing for a preliminary injunction held on January 29, the City introduced evidence showing a continuing pattern of financial difficulty in operating the landfill since approximately 1974. At some unspecified time, permission was obtained from the Economic Development Administration in Chicago to transfer "several hundred thousand dollars," originally granted for downtown improvements, to the landfill operation for the purchase of cover materials. A similar amount was expended to construct a sewer for de-watering and a federal grant was obtained to construct a building to house equipment. Revenue sharing money and funds repeatedly transferred from the General Services Department were also used to finance operations at the landfill as various problems arose. Apparently, however, these financial maneuvers occurred prior to 1980 and in fact were sufficient to bring the landfill into compliance with most of the order's provisions.

The primary violation currently existing appears to be the failure to comply with item one of the agreed order, quoted above, requiring daily application of cover. The City admitted it is in violation of this provision but relied on the defense of financial impossibility by introducing evidence of the landfill's 1980 budget and expenses. Specifically, the evidence relevant to the current violation revealed an annual cost between $212,160 and $254,592 for clay or sand cover and approximately $497,000 to $515,000 then needed for the purchase of two dump trucks, a compactor, a bulldozer and a tractor-loader. ¹ Cover material had previously been provided free of charge by government employed contractors seeking a place to deposit excavated clay. According to the testimony, the landfill was not presently receiving free cover material apparently due to the current lack of any government construction producing such material, necessitating the purchase of sand for cover.

On the other hand, the Deputy Controller for the City of Gary testified the landfill budget for 1980 totaled $300,408 only $1,200 of which was "unencumbered" as of January 29, 1980, the date of the hearing. ² Apparently the landfill's budget was funded by revenue sharing money and local property taxes. Since revenue funds were not available the City was forced to rely principally on local funds derived from the property taxes for 1980. The Deputy Mayor testified the final tax rate for the City is set by the State Board of Tax Commissioners. Effective between 1973 and 1977, the legislature passed tax control laws which generally froze the tax rate but left each county with the option of adopting a local income tax. Ind. Code 6-3.5 et seq. Lake County chose not to exercise this option. Since 1977 there have been legislative controls on the tax levy rather than the rate, although under both schemes there were statutory exceptions allowable at the option of the Tax Control Board. Ind. Code 6-3.5-1-12. One such exception permits application to the Tax Control Board for an excessive levy when legislation requires a service which forces additional spending by governmental units. Another exception since 1977 provided for inflation or growth factors which are in part determined by the highest levy since 1973. The City's applications under these exceptions has been denied every year since 1976. In addition, there was testimony suggesting the levy allowed the City was approximately two million dollars below the maximum levy allowed under the controls and has never reached the amount allowed in 1973, the year of the City's highest levy. At the time of the hearing, the City had petitioned the Tax Commission to review their maximum levies and their denial of treatment under the exceptions.

Pursuant to Ind. Rules of Procedure, Trial Rule 52(A)(1), the trial court issued special findings of fact stating among other things that the City was in violation of the agreed order and had not objected or opposed the issuance of the agreed order after its adoption. The court's judgment gave the City one month to comply, ordered an inspection by the Board at the end of that time and required a report of the Board's findings to the court which would result in a preliminary injunction if the findings indicated continuing non-compliance. The City was further preliminarily enjoined from operating the site in violation of the order after the one month period had expired on February 29, 1980. On February 19, 1980 the City was granted a stay from the trial court's order and this appeal was perfected.

ISSUE

The sole issue raised on appeal is whether the Board, a state agency, is estopped from enforcing the agreed order due to the alleged failure of the State Board of Tax Commissioners to approve an excessive tax levy sufficient to finance proper operation of the landfill.

DISCUSSION

Generally, the purpose of a temporary injunction is to maintain the status quo or to prevent irreparable injury until such time as the matter in dispute can be fully adjudicated at a trial on the merits. Green v. Board of Commissioners of Scott County, (1969) 251 Ind. 535, 242 N.E.2d 844; Rees v. Panhandle Eastern Pipe Line Co., (1978) Ind.App., 377 N.E.2d 640. However, where the legislature has statutorily declared that the acts sought to be enjoined are unlawful or clearly against the public interest, the party seeking injunctive relief need show neither irreparable injury nor a balance of hardship in their favor. Union Ins. Co. v. State ex rel. Ind. Dept. of Ins., (1980) Ind.App., 401 N.E.2d 1372; Rees v. Panhandle Eastern Pipe Line Co., supra. The granting of a preliminary injunction rests within the sound discretion of a trial court and this Court will not disturb the exercise of that discretion unless it is shown the trial court's action was arbitrary or constituted a clear abuse. Ind. Rules of Procedure, Trial Rule 52(A); Negley v. Lebanon Community School Corp., (1977) 173 Ind.App. 17, 362 N.E.2d 178; Peters v. Davidson, Inc., (1977) 172 Ind.App. 39, 359 N.E.2d 556. We, therefore, review the trial court's decision for an abuse of discretion only and will not review the final merits of the cause. Peters v. Davidson, Inc., supra.

Here, the City does not...