City of Indianapolis v. Armour
| Decision Date | 18 December 2009 |
| Docket Number | No. 49A02-0901-CV-84.,49A02-0901-CV-84. |
| Citation | 918 N.E.2d 401 |
| Parties | The CITY OF INDIANAPOLIS, et al., Appellants-Defendants, v. Christine ARMOUR, et al., Appellees-Plaintiffs. |
| Court | Indiana Appellate Court |
Jonathan L. Mayes, Justin F. Roebel, Office of Corporation Counsel, Indianapolis, IN, Attorneys for Appellants.
Ronald J. Waicukauski, R. Davy Eaglesfield, III, Jana K. Strain, Indianapolis, IN, Attorneys for Appellees.
In this appeal, we are asked to determine whether a resolution ("the Resolution") passed by the Indianapolis Board of Public Works ("the Board") violates the Equal Protection Clause of the United States Constitution, as applied to forty-five property owners in Northern Estates, an Indianapolis neighborhood ("the Homeowners"). The Resolution was designed to move the City of Indianapolis (the "City") from the Barrett Law method of financing sewer projects to a different method under the Septic Tank Elimination Program ("STEP"). The Resolution forgave all Barrett Law assessments due and owing as of November 1, 2005. The Homeowners had already paid their assessments in full prior to that date, and they sought a refund equivalent to the amount the Resolution had forgiven their neighbors, who were making installment payments. The City and the Board refused, and the Homeowners filed a complaint seeking a refund, declaratory relief, or a writ of mandamus.
The City, the Board, and other defendants (hereinafter collectively referred to as "the City," unless otherwise specified) appeal from the trial court's summary judgment for the Homeowners. The City presents two issues for our review, which we restate as the following dispositive issue: whether the Resolution, which forgave all Barrett Law assessments due and owing as of November 1, 2005, as applied to the Homeowners violated the Homeowners' right to equal protection of the laws and entitled them to a partial refund of their assessments. We hold that the City's refusal to issue a refund to the Homeowners in an amount that would place them in rough equality with their similarly situated, and identically taxed, neighbors violated the Homeowners' right to equal protection of the laws.
We affirm and remand with instructions.2
The Homeowners own residential real estate in the Northern Estates neighborhood. In April of 2001, the City notified the Homeowners and other property owners in the neighborhood by letter that each of their properties would be part of a sanitary sewer project ("the project") to be funded under the Barrett Law, Indiana Code Chapter 36-9-39. "The `Barrett Law' ... provides the statutory process by which a municipality may provide or require public improvements." Town Council of New Harmony v. Parker, 726 N.E.2d 1217, 1227 n. 13 (Ind.2000). As applied here, the Barrett Law required the costs of the project to be "apportioned equally among all abutting lands or lots." Ind. Code § 36-9-39-15(b)(3).
In May of 2001, the City held a public meeting to explain the Barrett Law process, costs, proposed funding, and the design for the project. The City held another public meeting in June of 2002, and, in 2003, the Homeowners were given two opportunities to meet with members of the inspection and construction firms to discuss the project. In June of 2004, the City held a final public hearing on the project.
In July of 2004, the City assessed each property owner in Northern Estates $9,2783 per parcel for the project. The City gave each owner the option to pay the assessment either in a lump sum or in installments over a term of ten, twenty, or thirty years. Each of the Homeowners paid the assessment in a single, lump sum payment. The other Northern Estates property owners chose an installment payment option.
The next year, on October 31, 2005, the City of Indianapolis and Marion County City-County Council ("the City-County Council") passed Ordinance No. 107, 2005, Proposal 535 ("the Ordinance"). Under the Ordinance, which had an effective date of January 1, 2006, the City abandoned its use of the Barrett Law as a means of funding new sewer improvements and created a different financing method under STEP. According to an affidavit executed more than two years later from James A. Garrard, the Chairperson of the Board ("the Garrard Affidavit"), "[t]he STEP program [sic] simplified utility planning, financing and operations by assessing a flat rate per sewer connection, whereas the Barrett Law program required assessment of fees based on each individual's use." Appellants' App. at 352. Under STEP, property owners adjacent to new sewer construction projects would be charged a flat $2,500 sewer-connection fee along with a monthly sewer bill. That connection fee would be paid in a single, lump sum payment by all affected property owners, although in "special cases" a property owner might qualify for a five-year installment plan. Id. at 4.
Following adoption of the Ordinance, on December 7, 2005, the Board passed the Resolution, which was titled, "A Resolution Forgiving Barrett Law Assessments." Id. at 350 (emphases removed). The Resolution stated:
WHEREAS, The Board of Public Works (Board) is authorized by Indiana Code (IC) 36-9-39 to administer `Barrett Law Funding for Municipal Sewer' program under which the Board approves all Barrett Law projects within the City of Indianapolis-Marion County, including [an] individual assessment amount per parcel, and
WHEREAS, The Barrett Law Funding for Municipal Sewer program may present financial hardships on many middle to lower income participants who most need sanitary sewer service in lieu of failing septic systems, and
WHEREAS, The Department of Public Works (DPW) has a proposed rate and fee increase package to the City-County Council for approval to continue to address the re-capitalization, expansion, operation and maintenance, and regulatory requirements of the City's sanitary sewer system which was approved by the City-County Council on October 31, 2005 (Proposal No. 535 as amended) effective on January 1, 2006, and
WHEREAS, The financial model upon which Proposal No. 535 was based, considered the current assessments being made by participants in active Barrett Law projects as well as the future needs to eliminate leaking septic systems in all of the City of Indianapolis-Marion County in order to discontinue the use of Barrett Law Funding for Municipal Sewer program for the finance of sanitary sewers.
NOW, THEREFORE, BE IT RESOLVED that [the Board] hereby forgive[s] all assessment amounts it established pursuant to the Barrett Law Funding for Municipal Sewer program due and owing from the date of November 1, 2005[,] forward to the Department of Public Works via the Barrett Law Assessment Bureau.
Id. (emphases added). On May 29, 2008, the City designated the Garrard Affidavit with its cross-motion for summary judgment. In the Affidavit, Garrard offered four reasons for passing the Resolution:
a. The Board determined that the continued use of the Barrett Law funding system may present financial hardships on many middle[-]to lower-income participants who most needed sanitary sewer service in lieu of failing septic systems;
b. The Board enacted [STEP] based on several interrelated financial, engineering, public health and geographical factors so that all future installation projects would cost one flat rate per connection;
c. The City would no longer use [the] Barrett Law statute ... for funding of the installation project, consequently the provisions of that statute were inapplicable, and it was essential for the City to establish a clear date for the change and move forward with the new funding approach; and
d. The administrative costs to service and process remaining balances on Barrett Law accounts long past the transition to the STEP program [sic] would not benefit the taxpayers and [would] defeat the purpose of the flat[]rate per connection — namely, simplifying things.
The Homeowners had each paid their Barrett Law assessments in full before November 1, 2005. In its operation and effect, the Resolution released 142 other Northern Estates owners who had elected to pay in installments from making any more payments as of that date. Sixty-eight of those owners had paid $309.27 toward satisfaction of the assessment; twenty-seven had paid $463.90; and forty-seven had paid $927.80.
On February 4, 2006, the Homeowners asked the Board to issue a refund of their lump sum payments in an amount equivalent to the assessments forgiven for those property owners who had paid the most under an installment plan. On March 8, 2006, Garrard sent the Homeowners a letter denying their request for refunds. The letter stated, in part, that:
The particular project area in which you reside is one of over 40 Barrett Law projects the City has constructed in the past. The circumstances of this project being constructed closer to the date in which the City chose to eliminate using Barrett Law ... as a method of providing sewers to unsewered areas is one of prioritization. We recognize that the time frame would suggest to you that refunds are warranted, but the fact that this was a recent use of Barrett Law does not distinguish it from previous projects constructed using the same funding mechanism. Refunding payments made in your project area, or any portion of the payments, would establish a precedent of unfair and inequitable treatment to all other property owners who have also paid Barrett Law assessments. [The Board] made a decision to forgive Barrett Law assessments made after November 1, 2005[,] ... and while this date might seem arbitrary to you, it is essential for the City to establish this date and move forward with the new funding approach.
Id. at 318 (emphasis added). Thereafter, on April 27, 2007, the Homeowners each filed a claim with the Marion County Auditor for a refund of an erroneous or excessive tax payment, pursuant...
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