City of Key W. v. Key W. Golf Club Homeowners' Ass'n, Inc.
| Decision Date | 26 January 2017 |
| Docket Number | No. 3D13-57,3D13-57 |
| Parties | City of Key West, Appellant/Cross-Appellee, v. Key West Golf Club Homeowners' Association, Inc., et al., Appellees/Cross-Appellants. |
| Court | Florida District Court of Appeals |
Not final until disposition of timely filed motion for rehearing.
An Appeal from the Circuit Court for Monroe County, David J. Audlin, Jr., Judge.
Johnson, Anselmo, Murdoch, Burke, Piper & Hochman, P.A., and Michael T. Burke and Hudson C. Gill (Fort Lauderdale), for appellant/cross-appellee.
Smith Oropeza Hawks, P.L., and Barton W. Smith and Patrick M. Flanigan, for appellees/cross-appellants.
Before LAGOA and LOGUE, JJ., and SHEPHERD, Senior Judge.
Appellant, the City of Key West (the "City") appeals from the trial court's entry of final judgment in favor of the Appellees, Key West Golf Club Homeowners' Association, Inc., Key West Golf Club, LLC, and Key West HMA, LLC, (hereinafter collectively the "landholders").
The landholders brought this action challenging the legality of the City's stormwater utility fees and seeking a refund for fees paid. After a bench trial, the court below entered final judgment in favor of the landholders, finding that the utility fee was arbitrary and discriminatory as applied because the landholders were non-users or minimal users of the City's stormwater services. The City appealed and the landholders cross-appealed the trial court's determination that the pre-litigation payments were voluntary and therefore not refundable.
Because competent, substantial evidence supports the trial court's conclusion that the City's stormwater utility fees were not reasonably based on the landholders' contribution to the City's stormwater system, we affirm. On the issue of voluntariness, we reverse as we find that the stormwater ordinance's onerous penalties for nonpayment were sufficient to make payment involuntary.
The landholders—a homeowners' association, a golf course, and a hospital—own or lease properties on North Stock Island, which is the portion of Stock Island that is north of US 1 and part of the incorporated City of Key West. On the island of Key West itself, the City's stormwater system is comprised of extensive infrastructure designed for both quantity (flooding) and quality (pollution) control, and it is much more developed in comparison with the minimal stormwater infrastructure on North Stock Island. No stormwater from North Stock Island flows into the island of Key West's stormwater collection and treatment facilities.
As can be seen from the attached map1 of North Stock Island, the landholders' properties are enclosed within an irregular horseshoe-shaped loop created by College Road. Both ends of the horseshoe intersect with US 1. To the east of College Road is a waterway that is part of the Gulf of Mexico (the "Gulf"). In the late 1960s, the Florida Department of Transportation ("FDOT") constructed College Road. FDOT's general contractor, Charlie Toppino & Sons ("Toppino"), built the road at a higher elevation than the surrounding land and designed it to slope toward the Gulf so that stormwater runoff from the road would flow to theouter lane into several inlets (storm drains) and discharge through outfalls2 (pipes) into the Gulf. There is no record evidence that the City contributed in any way to the construction of College Road, the inlets, or the outfalls.
When it was built, College Road landlocked a salt marsh, which is located adjacent to the properties involved in this appeal. In the 1980s, FDOT contracted with Toppino to construct seven culverts3 beneath College Road to allow water to flow freely between the salt marsh and the Gulf and thereby to re-establish the tidal flow between the salt marsh and the Gulf. There is no record evidence that the City contributed in any way to the construction of the culverts.
College Road continues to be owned by FDOT; however, in 1971, the State entered into a written agreement with Monroe County requiring the County to maintain the road. Although no written agreement between the County and City exists, the City states that it orally agreed to maintain the already existing stormwater infrastructure on College Road after 1995 in exchange for a share of the State gas tax. By the City's own admission, the College Road infrastructure is therefore funded by its own separate revenue stream.
The trial court found that the maintenance of the stormwater infrastructure on College Road has been "sporadic, at best." Indeed, the record shows that very little, if any, maintenance was done until the landholders brought this action in 2009. In August 2010, a CH2M HILL engineer and an OMI representative4 conducted a field review of the College Road infrastructure. During their inspection, they found that outfalls 60 and 61 (see map) were both blocked by extensive mangrove growth on both ends. According to their report, "[m]ost of the remaining outfalls were not found as their ends were deep within the mangroves growing in the swales and along the coastline." Only the seven culverts, which are large 36-inch by 48-inch elliptical corrugated pipes and naturally scoured by tidal currents, were observed to be flowing freely during the field review.
Apart from the stormwater infrastructure on College Road, it is undisputed that the landholders maintain their own private stormwater management systems—comprised of ponds, pumps, swales, and other infrastructure—that eventually discharge into the adjacent salt marsh where water flows freely between the marsh and the Gulf via the seven culverts discussed above. In order to operate a private stormwater system and discharge stormwater, the landholders are required to have certain permits, which are issued under the authority of the Florida Department of Environmental Protection. The landholders also have permits that allow them totrim and remove mangroves in order to maintain their private systems free from blockage.5
Chapter 403, Florida Statutes, is titled the "Florida Air and Water Pollution Control Act." Section 403.0891 requires local governments to develop stormwater management programs. To fund their stormwater systems, municipalities are authorized to create stormwater utilities. § 403.0893, Fla. Stat. (2001). A "'[s]tormwater utility' means the funding of a stormwater management program by assessing the cost of the program to the beneficiaries based on their relative contribution to its need." § 403.031(17), Fla. Stat. (2001).
In 2001, the City established a stormwater utility. Key West, Fla., Code of Ordinances § 74-363. Due to the difficulty of measuring the precise contribution of every property to the City's stormwater system, the City calculates its stormwater fee based on a property's impervious surface area—i.e. artificial surfaces, such as pavements, that prevent or slow water from percolating into the ground.6 Id. at §74-365. This method is based on the assumption that the greater a property's impervious surface area, the more stormwater runoff that property will contribute to the City's system. Although this approach is not perfect, it is a legally permissible and widely used method for calculating stormwater utility fees. See City of Gainesville v. State, 863 So. 2d 138, 147 (Fla. 2003).
Since this method is based on statistical estimates, there may be situations in which the fee is not reasonably related to the amount of stormwater that makes its way into the City's system, as required by Chapter 403. Recognizing this, the City's Ordinance carves out an exemption for undisturbed property (property with no actual impervious surface area) and any property that retains "100 percent of the total volume of runoff within the property (measured on the basis of a 72-hour, 100 year storm event)."7 Key West, Fla., Code of Ordinances § 74-361 (2001).8 The Ordinance also establishes standards for reducing the stormwater utility fee:
Id. at § 74-365(f)(1). All agree that the landholders did not qualify for any exemptions or reductions.
In 1994, as required by the City's Comprehensive Plan, Kisinger, Campos and Associates performed a stormwater study that identified and mapped flood problems on the island of Key West. In 2001, the City created a Long Range Stormwater Utility Plan that identified flood zones and capital stormwater projects on the island of Key West. Although this 2001 plan was used to determine the City's stormwater utility fee, neither it nor the 1994 study identified flood zones or capital projects on North Stock Island. Despite North Stock Island's complete absence from these stormwater planning documents, the City, in 2003, began charging North Stock Island property owners a monthly stormwater utility fee under the identical fee structure charged to property owners on the island of KeyWest. In 2006, Perez Engineering & Development, Inc. prepared a Draft Design Memorandum that updated the mapping and computer simulation model of the City's drainage system. As with the City's prior studies and plans, the 2006 report omitted any discussion of North Stock Island.
Only after the landholders brought this action did the City evaluate the stormwater runoff on North Stock Island in its 2011 North Stock Island Stormwater Drainage Assessment. At trial, the City's witness, a CH2M HILL representative,...
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