Krupp v. Breckenridge Sanitation Dist.

• Decision Date: 01 April 1999
• Docket Number: No. 97CA1996.,97CA1996.
• Citation: 1 P.3d 178
• Parties: Marshall B. KRUPP, Renate D. Krupp, and C.S.A. Real Estate Development, LLC, a Colorado limited liability company, Plaintiffs-Appellants, v. The BRECKENRIDGE SANITATION DISTRICT, a Colorado Special District; The Board of Directors of the Breckenridge Sanitation District; and Andrew Carlberg, as Manager of the Breckenridge Sanitation District, Defendants-Appellees.
• Court: Colorado Court of Appeals

1 P.3d 178

Marshall B. KRUPP, Renate D. Krupp, and C.S.A. Real Estate Development, LLC, a Colorado limited liability company, Plaintiffs-Appellants, v. The BRECKENRIDGE SANITATION DISTRICT, a Colorado Special District; The Board of Directors of the Breckenridge Sanitation District; and Andrew Carlberg, as Manager of the Breckenridge Sanitation District, Defendants-Appellees.

No. 97CA1996.

Colorado Court of Appeals, Div. II.

April 1, 1999.

Certiorari Granted May 22, 2000.

Baker & Hostetler, LLP, Michael G. Martin, Munir R. Meghjee, Denver, Colorado, for Plaintiffs-Appellants

Vranesh and Raisch, LLC, Eugene J. Riordan, Boulder, Colorado, for Defendants-Appellees

Opinion by Judge PLANK.

Plaintiffs, developers of a residential project within the territory of the Breckenridge Sanitation District (District), a special district providing sewer and wastewater services, appeal a judgment denying them relief under C.R.C.P. 106(a)(4), a summary judgment in favor of defendants, the District and its Board of Directors (Board), on plaintiffs' constitutional claims, and an order denying plaintiffs leave to amend their complaint. We affirm.

Plaintiffs designed a residential development involving a number of dwelling units organized into duplexes. At the instigation of the City of Breckenridge and the county planning commission, plaintiffs modified the design to include a total of 25 basically identical units, organized into 8 duplex and 3 triplex buildings. Upon applying for building permits, plaintiffs were informed by the District that, according to its standard schedule, the mandatory plant investment fee (PIF) for each unit in a triplex would be approximately 80% higher than for each unit in a duplex building.

Plaintiffs appealed to the Board which affirmed the PIF determination. Plaintiffs then sought review of the Board's decision in the district court pursuant to C.R.C.P. 106(a)(4), and included additional claims for unlawful taking, violations of their constitutional equal protection rights, and for a determination that the Special Districts Act unconstitutionally delegates to the District legislative powers reserved to the General Assembly. The district court stayed the proceedings on all the other claims and conducted a hearing to review the District's decision pursuant to C.R.C.P. 106(a)(4). The trial court determined that the District had not exceeded its jurisdiction nor had it abused its discretion and, therefore, denied plaintiffs relief on that claim.

Plaintiffs then sought to amend their complaint to include as additional claims that the District had violated their procedural due process rights and civil rights violations pursuant to 42 U.S.C. § 1983 (1994). The parties also filed cross-motions for summary judgment on the remaining claims. The trial court subsequently granted summary judgment to defendants on all the remaining claims and denied plaintiffs' motion to amend their complaint. This appeal followed.

I.

Plaintiffs' primary contention is that the trial court erred by ruling that the PIF charged by the District is not an unlawful taking of plaintiffs' property. We disagree.

Plaintiffs rely on Nollan v. California Coastal Commission, 483 U.S. 825, 107 S.Ct. 3141, 97 L.Ed.2d 677 (1987) (Nollan); Dolan v. City of Tigard, 512 U.S. 374, 114 S.Ct. 2309, 129 L.Ed.2d 304 (1994) (Dolan); and Ehrlich v. City of Culver City, 12 Cal.4th 854, 50 Cal.Rptr.2d 242, 911 P.2d 429 (1996) (Ehrlich) for the proposition that an unconstitutional taking occurs when a building permit is conditioned on payment of an excessive fee without an individualized determination of "rough proportionality" between the fee and the impact of the applicant's proposed development. While Nollan and Dolan plainly apply to required dedications of possessory interests in real property, plaintiffs urge us to adopt the reasoning of Ehrlich by holding that a payment of money is subject to the same constitutional scrutiny.

In Nollan, the owners of coastal property in California sought to build a larger residence on their land. Their building permit was conditioned upon the granting of an easement parallel to the shoreline for the ostensible purpose of improving access to nearby public beaches. The U.S. Supreme Court, noting that the stated purpose bore no relation to the dedication demanded, held that such a condition amounted to nothing more than governmental extortion by leveraging the state's land-use regulation authority to demand concessions from landowners for which it would otherwise have to pay just compensation under the Fifth Amendment.

In Dolan, a city conditioned the building permit for the expansion of a retail store on the owner dedicating that portion of the property adjacent to a river, both to prevent development within the river's flood plain and so the city could provide a bicycle and pedestrian path to reduce traffic congestion. The Supreme Court held that, where there is some rational connection between the governmental interest to be served and the landowner's proposed development, the Fifth Amendment requires only that there be an individualized determination of "rough proportionality," not mathematical equality, between the dedication demanded and the impact of the landowner's proposed development.

Plaintiffs' reliance on Nollan and Dolan is misplaced, even if we should choose to adopt the reasoning of the California Supreme Court in Ehrlich. The record before us reveals that the District has no statutory or regulatory authority to deny or condition the issuance of building permits. While the record does reflect that the local governmental entities with authority to deny or condition building permits do route the applications to the District for its "sign-off," those entities maintain the ultimate authority to grant or deny the applications, and thus, there can be no risk of leveraging by the District. Nor is there anything in the record to support a conclusion that the District has the power, officially or unofficially, de facto or de jure, to prevent the issuance of a building permit. The plaintiffs, in opposing summary judgment, offered no evidence to the contrary.

Moreover, the essence of a Nollan/Dolan violation is the demanding by the governmental authority of a concession, especially a dedication of an interest in real property, for its own benefit and not to offset the impact of the proposed development. Here, however, the PIF is a charge for connecting to and using the District's sewer facilities, a service primarily of benefit to plaintiffs and obviously directly related to plaintiffs' development.

The trial court therefore properly held that no unconstitutional taking of plaintiffs' property occurred in violation of the Fifth Amendment.

II.

Plaintiffs next contend that the trial court erred by finding that the Board did not abuse its discretion or exceed its jurisdiction in affirming the PIF determination. We disagree.

When reviewing the decision of a governmental body or officer pursuant to C.R.C.P. 106(a)(4), the district court must affirm the decision unless the governmental entity has abused its discretion or exceeded its jurisdiction. The trial court's review is based solely on the record that was before the governmental entity, and the decision must be affirmed unless there is no competent evidence in the record to support it such that the decision was essentially arbitrary or capricious. C.R.C.P. 106(a)(4); Ross v. Fire & Police Pension Ass'n, 713 P.2d 1304 (Colo. 1986).

We apply the same standard of review as the district court to the decision of the governmental entity. Denargo Market Neighbors Coalition v. Visser Real Estate Investments, 956 P.2d 630 (Colo.App.1997).

Here, plaintiffs assert that the Board abused its discretion because there was no competent evidence in the record to support its decision. However, much of plaintiffs' argument is based on their contention that an individualized determination of "rough proportionality" was required by Nollan and Dolan, a contention we have rejected.

The remainder of the plaintiffs' argument is nothing more than an attack on the credibility and reliability of the evidence that is in the record. Since the board was in a better position to determine the weight and credibility of the evidence presented, we decline to substitute our judgment for that of the board. Van Sickle v. Boyes, 797 P.2d 1267 (Colo.1990).

Our review of the record reveals sufficient evidence to support the board's decision that the PIF calculation, as set forth in defendant's rules and regulations, is not arbitrary or capricious. Evidence in the record established that the PIF and the District's other fees were based originally in part on local demographic data showing that single-family homes and duplex units were predominantly owner-occupied while units in triplex and larger multi-family buildings were predominantly second homes or occupied by short-term renters. Other evidence established that second homes and short-term rental use result in higher peak occupancy and thus higher peak sewage flow.

The board, in considering plaintiffs' appeal, also examined newer demographic data supporting a conclusion that second home and rental use of duplex units had substantially increased and, if any change was warranted, that duplex units should be charged the higher rate applicable to triplexes. Additional evidence showed that the current PIF and fee-setting methodology apportions the District's costs adequately, although not precisely, in accordance with peak sewage flow rates.

Thus, because there is evidence in the record to support its decision, we conclude that the board did not exceed its jurisdiction, nor did it abuse its discretion, in setting or affirming the PIF.

III.

Plaintiffs next contend that the statute authorizing special districts to set their own fees for services, § 32-1-1001(1)(j), C.R.S.1998, is an unconstitutional delegation of legislative...