Flores v. City of Miami
| Decision Date | 09 October 1996 |
| Docket Number | No. 95-2021,95-2021 |
| Citation | 681 So.2d 803 |
| Parties | 21 Fla. L. Weekly D2187 Elsa Marina Zelaya FLORES, et al., Appellants, v. CITY OF MIAMI, Appellee. |
| Court | Florida District Court of Appeals |
Sugarman & Susskind, P.A., and Howard S. Susskind and Robert Sugarman, Coral Gables, for appellants.
A. Quinn Jones, III, City Attorney; Joel E. Maxwell, Deputy City Attorney; and Kathryn S. Pecko, Assistant City Attorney, for appellee.
Before JORGENSON, GODERICH and GREEN, JJ.
We review the circuit court's order upholding the constitutionality of a City of Miami ordinance regulating vending on public streets and sidewalks and denying permanent injunctive relief. For the following reasons, we affirm.
In January 1995, the City of Miami, by ordinance, established the Downtown Miami Special Vending District, which limits street vending to those vendors awarded franchises by lottery. Vendors must obtain $1 million in liability insurance before they can participate in the lottery. For the lottery winners, the ordinance requires franchise fees, hold harmless agreements, insurance, tax certificates, and compliance with applicable local and state regulations. Further, the ordinance sets forth specifications for vending pushcarts, and contemplates the city purchasing conforming carts with franchise revenues and then leasing them to the vendors.
Plaintiff Elsa Marina Zelaya Flores vends hot dogs from a push cart on the streets of downtown Miami. Plaintiff United Vendors of South Florida is an unincorporated association that is affiliated with the Amalgamated Clothing and Textile Workers Union, which purports to represent the interests of Miami street vendors. In June 1995, these plaintiff vendors filed a complaint seeking temporary and permanent injunctive relief against the city regarding enforcement and implementation of the ordinance. On the vendors' motion for injunctive relief, the trial court upheld the constitutionality of portions of the ordinance providing for franchise fees and requiring liability and property insurance coverage, but temporarily precluded the city from implementing and enforcing these provisions until the trial court could conduct an evidentiary hearing to determine the reasonableness of the fees and coverage limits. The vendors appealed.
The vendors argue that the ordinance is an ultra-vires attempt by the City of Miami to impose an unconstitutional tax upon street vending, couched within a purported regulatory scheme. They point, for example, to the provision of the ordinance dividing downtown Miami into three separate vending areas with a graduated fee schedule that corresponds to the respective profitability of each of the areas; 1 and the alleged general economic benefits the city will obtain through leasing pushcarts that conform to the specifications of the ordinance. We disagree.
The ordinance provides that
[f]ees collected under this subsection are for franchises granted for the exclusive right to use a portion of the public right-of-way, and are in addition to other permit fees and occupational license taxes imposed by law.
All franchise fees collected pursuant to this section shall be placed in a special account established for the "Downtown Miami Special Vending District" by the City of Miami's Director of Finance, and shall be utilized exclusively by the Executive Director, upon approval of the [Downtown Development Authority] Board of Directors, for the administration of this district, its management services and purchase or replacement of pushcarts and/or related equipment.
The Florida Constitution circumscribes a municipality's ability to generate revenue through taxes, and Florida law does not provide for taxation of street vendors. See Art. VII, § 1(a), Fla. Const. Nonetheless, a municipality has the power to safeguard and maintain the character of its streets, sidewalks, and all other common grounds for the benefit of the general public through regulation. State ex rel. Nicholas v. Headley, 48 So.2d 80, 81 (Fla.1950); Lloyd Enters., Inc. v. Department of Revenue, 651 So.2d 735, 741 (Fla. 5th DCA 1995) (Sharp, J., concurring); City of Key West v. Marrone, 555 So.2d 439 (Fla. 3d DCA 1990). The number of vending carts permitted to consume public space in congested areas may be validly limited. City of Key West v. Marrone, 555 So.2d 439 (Fla. 3d DCA 1990); see also City of New Orleans v. Dukes, 427 U.S. 297, 96 S.Ct. 2513, 49 L.Ed.2d 511 (1976); State ex rel. Pennington v. Quigg, 94 Fla. 1056, 114 So. 859 (1927). Such limitations on competition will likely augment the economic value of a permitted vendor's franchise--more so in areas of higher profitability. The city is entitled to exact a higher fee for granting use of this more valuable public property. See City of Plant City v. Mayo, 337 So.2d 966 (Fla.1976); Santa Rosa County v. Gulf Power Co., 635 So.2d 96 (Fla. 1st DCA), cause dismissed sub nom. Escambia River Elec. Co-op., Inc. v. Santa Rosa County, 641 So.2d 1345 (Fla.1994), and rev. denied, 645 So.2d 452 (Fla.1994); Jacksonville Port Auth. v. Alamo Rent-A-Car, Inc., 600 So.2d 1159 (Fla. 1st DCA), rev. denied, 613 So.2d 1 (Fla.1992).
This graduated scheme of franchise fees is not a tax:
The United States Supreme Court distinguished between a tax and a user fee, defining a tax as providing revenue for the general support of the government, while defining a user fee as imposing a specific charge for the use of publicly-owned or publicly-provided facilities or services. Commonwealth Edison Co. v. Montana, 453 U.S. 609, 621-622, 101 S.Ct. 2946, 2955, 69 L.Ed.2d 884, 896-897 (1981). The Florida Supreme Court has defined it thusly:
In common parlance, a tax is a forced charge or imposition, it operates whether we like it or not and in no sense depends on the will or contract of the one on whom it is imposed.
State ex rel. Gulfstream Park Racing Ass'n v. Florida State Racing Comm'n, 70 So.2d 375, 379 (Fla.1953) [citations omitted].
Jacksonville Port Auth., 600 So.2d at 1162. Two 1976 Florida Supreme Court decisions addressed whether fees imposed by municipalities were invalid taxes or valid regulatory fees. In Contractors & Builders Ass'n v. City of Dunedin, 329 So.2d 314 (Fla.1976), building contractors and landowners challenged a municipal ordinance that charged an impact fee for the privilege of connecting to the city's water and sewer system.
Plaintiffs contended that the portion of the monies collected that was earmarked for capital improvements to the water and sewer system as a whole 2 constituted taxes which the municipality is forbidden to impose in the absence of enabling legislation. The Court noted that in general, connection fees are not taxes but are analogous to fees collected by private utilities for services rendered. Nonetheless, the connection fees at issue were invalid because the ordinance provided insufficient restrictions on their use:
The failure to include necessary restrictions on the use of the fund is bound to result in confusion, at best. City personnel may come and go before the fund is exhausted, yet there is nothing in writing to guide their use of these moneys, although certain uses, even within the water and sewer systems, would undercut the legal basis for the fund's existence. There is no justification for such casual handling of public moneys and we therefore hold that the ordinance is defective for failure to spell out necessary restrictions on the use of the fees it authorizes to be collected.
Id. at 321 (emphasis added).
Subsequently that same year, the Florida Supreme Court reviewed a decision of the Public Service Commission that municipal franchise fees paid by electric utility companies in Florida should no longer be considered as a general operating expense payable by all of the utilities' customers, but rather should be separately billed by the utility to the customers of the municipalities which impose the fees. City of Plant City v. Mayo, 337 So.2d 966 (Fla.1976). The Court rejected the Commission's arguments which analyzed the cities' franchise fees as taxes:
we have absolutely no difficulty in holding that the franchise fees payable by Tampa Electric are not 'taxes'. The cities would lack lawful authority to impose taxes of this type and, unlike other governmental levies, the charges here are bargained for in exchange for specific property rights relinquished by the cities.
Id. at 973 (emphasis added). Unlike Dunedin, Plant City does not address the specific use of the funds collected, but, rather, focuses on the public's entitlement to some compensation for relinquishing property rights to private entities. Such a compensation scheme is not a tax.
The rationale of Plant City has been applied to distinguish fees from taxes in the contexts of public rights-of-way used by utilities and public airports serviced by rental car agencies. In City of Hialeah Gardens v. Dade County, 348 So.2d 1174 (Fla. 3d DCA 1977), cert. den. and appeal dismissed, 359 So.2d 1212 (Fla.1978), Hialeah Gardens challenged Dade County's use of Florida Power & Light franchise revenues to pay special obligation improvement bonds which were issued to finance the construction or acquisition of capital improvements, including county parks, as violating the taxation restrictions of Article VIII, Section 1(h) of the Florida Constitution. Citing Plant City, we responded that "franchise fees are not taxes, but rather consideration paid by the utility for the grant of the franchise." Id. at 1180.
In Jacksonville Port Authority v. Alamo Rent-A-Car, 600 So.2d 1159 (Fla. 1st DCA), rev. denied, 613 So.2d 1 (Fla.1992), the First District Court of Appeal held that the city port authority's 6% gross receipts charge on off-airport rental car agencies was not a tax. The parties had stipulated that the six percent fee did not...
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