Dep't of WATERWORKS FOR The Consol. City of Ind.POLIS v. Cmty. Sch. Corp. of SOUTHERN HANCOCK County, 93A02-1002-EX-218.
| Decision Date | 27 December 2010 |
| Docket Number | No. 93A02-1002-EX-218.,93A02-1002-EX-218. |
| Citation | 933 N.E.2d 880 |
| Parties | DEPARTMENT OF WATERWORKS FOR the CONSOLIDATED CITY OF INDIANAPOLIS, Indiana, Appellant-Respondent, v. COMMUNITY SCHOOL CORPORATION OF SOUTHERN HANCOCK COUNTY, Appellee-Complainant. |
| Court | Indiana Appellate Court |
OPINION TEXT STARTS HERE
David T. McGimpsey, Phillip J. Fowler, Casey M. Holsapple, Bingham McHale LLP, Indianapolis, IN, Attorneys for Appellant.
Bryan H. Babb, Stephen C. Unger, Bose McKinney & Evans LLP, Indianapolis, IN, Attorneys for Appellee.
Southern Hancock School Systems (School) is scheduled to open a new intermediate school in August 2011. Pursuant to its plan, the School wants to connect a 2300-foot service pipe from an existing water main to its new facility. The Indianapolis Department of Waterworks (Water Company) denied the School's request to install a service pipe in lieu of a water main extension because the School's idea was contrary to the Water Company's rules and “good engineering practice.” Appellant's Br. p. 5. This case comes before us following the Indiana Utility Regulatory Commission's (IURC) determination that the rules do not preclude the School from connecting a service pipe to its new facility from an existing main.
Appellant-respondent Water Company appeals the IURC's decision in favor of appellee-complainant School, claiming that the IURC's decision allowing the School to construct its own water service line rather than paying for a water main extension is contrary to law because the new building does not abut an existing main as required by the Water Company's departmental rules. The Water Company also asserts that the IURC's factual determinations regarding the economics of the School's decision to connect to the existing main are not supported by the evidence and that the School failed to refute the Water Company's engineering plans and water quality analysis. Concluding that the IURC properly determined that the Water Company's rules do not preclude the School from connecting its new building to an existing water main and finding no other error, we affirm.
The School is a duly organized corporation in accordance with Indiana Code section 20-26-2-4. It provides public education in and around New Palestine to nearly 3,500 students and abides by State and local directives limiting the capital costs associated with new school construction. The attached diagram depicts the property that the School owns near the intersection of County Road 600 West (CR 600) and County Road 200 South (CR 200) in Hancock County. 2
As the diagram also illustrates, two schools in the system presently receive water through a single service pipe that is connected to a water main that runs along CR 600. The School previously paid the Water Company to extend that main along CR 600 to provide it with water service.
As noted above, the School is constructing a new intermediate school on the campus that is scheduled to open in August 2011. 3 In December 2008, the School requested permission from the Water Company and the sewer provider to connect the new intermediate school to separate water and sewer lines along CR 600. The sewer provider, GEM Utilities, granted the School's request, but the Water Company denied it. The Water Company indicated that if the School desired service to the new school, it would have to pay for a second main extension along CR 200 that would run perpendicular to the existing main that extended along CR 600. 4
To extend the main along CR 200, Waterworks requested a $372,485 deposit from the School. If a new main was constructed along CR 200, the School would need to add an 800-foot service pipe to reach the main. It was estimated that the addition would cost approximately $40,000, for a total cost of about $412,000. In contrast, the School could install a service pipe and connect to the existing water main on CR 600 for approximately $168,000.
On March 24, 2009, the School filed an informal complaint with the Consumer Affairs Division (CAD) of the IURC, challenging the application of the rules 5 regarding its request to install the service pipe. More specifically, the School requested that it be permitted to build the 2,300-foot service connection from CR 600 rather than pay for a main extension to its new school building along CR 200.
In response, the Water Company's general counsel sent a letter to the CAD on April 13, 2009, asserting, among other things, that
The main extension would provide better overall service to the School and to the System as a whole for reasons that include, but are not limited to, service reliability, water quality, fire protection, and good public policy. The main extension provides better system reliability because it adds redundancy to the system.
...
Another factor in favor of the main extension is the increased fire protection that it would provide not only to the School, but also to the existing residents along the main extension route as well.
...
Further, water mains located in rights-of-way or easements and adjacent to public streets and roadways allow for ease of identification of and access to leaks. Utility personnel such as meter readers and field service representatives pass by such assets frequently, and are trained to identify and report these problems.
Appellant's App. p. 34-36. The Water Company also asserted that its proposal was not discriminatory and it was not denying water service to the school. It also added that the proposed main extension is “consistent with its Rules, good engineering practice, and public policy....” Id. at 32-33. While the Water Company also claimed in its letter that it was lowering its cost estimate for the new main to $289,000, that price did not include the $40,000 cost of the service pipe that the School would still have to pay.
On July 6, 2009, the CAD issued an informal disposition in the matter, concluding that the Water Company “provided sufficient reasoning in this case to request the installation of a water main in lieu of [the School's desire for] a service connection.” Id. at 54-55. The School then appealed that decision to the IURC on July 23, 2009. Following a hearing, the IURC reversed the CAD's decision and issued an order on January 27, 2010, in favor of the School, holding in relevant part that
[T]his case is seemingly nothing more than a straightforward request for the connection of a service pipe to an existing main by the School Corporation. This request was rejected by [the Water Department] in a manner not contemplated by its rules, the [IURC's] Administrative rules, or any other evidence in the Record.
Id. at 7. As a result, the IURC ordered that “[the School] shall be permitted to connect its new school to the existing main on CR 600 without delay.” Id. at 9. The Water Company now appeals.
At the outset, we note that the parties dispute the standard of review that should be applied in this instance. The School points out that our Supreme Court observed in NIPSCO v. U.S. Steel Corp., 907 N.E.2d 1012, 1018 (Ind.2009), that “questions falling within the IURC's expertise are reviewed with a high level of deference even if they involve questions of law.” In contrast, the Water Company contends that because there are no issues of disputed facts and an interpretation of the Water Company's rules is involved, a de novo standard of review must apply.
In other words, the Water Company asserts that we should afford no deference to the IURC's decision in this case.
In resolving this issue, we consider the circumstances in U.S. Steel, which discussed the standard of review that should be applied in instances where the IURC approved a settlement agreement between NIPSCO and U.S. Steel in an order. U.S. Steel, 907 N.E.2d at 1015. After a price adjustment provision set forth in the settlement agreement became effective, the parties later disagreed as to how the adjustment should be applied. As a result, U.S. Steel filed a complaint seeking to enforce its interpretation of the contract. U.S. Steel then filed a motion for summary judgment, which the IURC subsequently granted. NIPSCO appealed and we reversed. NIPSCO v. U.S. Steel Corp., 881 N.E.2d 1065 (Ind.Ct.App.2008). Our Supreme Court granted transfer and initially discussed the proper standard of review that should be applied. More specifically, it was observed that the IURC was created by the General Assembly “primarily as a fact-finding body with the technical expertise to administer the regulatory scheme devised by the legislature.” U.S. Steel, 907 N.E.2d at 1015. Moreover, the U.S. Steel Court commented that “the Commission's assignment is to insure that public utilities provide constant, reliable, and efficient service to the citizens of Indiana.” Id. Thus, it was determined that judicial review of an IURC order
amounts to a multiple tiered review. On the first level, it requires a review of whether there is substantial evidence in light of the whole record to support the Commission's findings of basic fact. Citizens Action Coalition of Ind., Inc. v. N. Ind. Pub. Serv. Co., 485 N.E.2d 610, 612 (Ind.1985). Such determinations of basic fact are reviewed under a substantial evidence standard, meaning the order will stand unless no substantial evidence supports it. McClain [ v. Review Bd. Of Ind. Dept. of Workforce Dev., 693 N.E.2d 1314, 1317-18 (Ind.1998) ]. In substantial evidence review, “the appellate court neither reweighs the evidence nor assesses the credibility of witnesses and considers only the evidence most favorable to the Board's findings.” Id. The Commission's order is conclusive and binding unless (1) the evidence on which the Commission based its findings was devoid of probative value; (2) the quantum of legitimate evidence was so proportionately meager as to lead to the conviction that the finding does not rest upon a rational basis; (3) the result of...
To continue reading
Request your trial
-
Kelly v. State
... ... 30, 2012 ... Appeal from the Hancock Circuit Court; The Honorable Richard D. Culver, ... ...