Lewiston Indep. Sch. Dist. # 1, an Idaho Body Politic & Corporate v. City of Lewiston, an Idaho Mun. Corp.

• Decision Date: 07 November 2011
• Docket Number: No. 38116.,38116.
• Court: Idaho Supreme Court
• Parties: LEWISTON INDEPENDENT SCHOOL DISTRICT # 1, an Idaho body politic and corporate; Lewis–Clark State College, an Idaho body politic and corporate; Nez Perce County, a legal subdivision of the State of Idaho; Port of Lewiston, a publicly created port district within Nez Perce County, Idaho; and Lewiston Orchards Irrigation District, a duly organized irrigation district within Nez Perce County, Idaho, Plaintiffs–Respondents, v. CITY OF LEWISTON, an Idaho municipal corporation, Defendant–Appellant.

151 Idaho 800

264 P.3d 907

LEWISTON INDEPENDENT SCHOOL DISTRICT # 1, an Idaho body politic and corporate; Lewis–Clark State College, an Idaho body politic and corporate; Nez Perce County, a legal subdivision of the State of Idaho; Port of Lewiston, a publicly created port district within Nez Perce County, Idaho; and Lewiston Orchards Irrigation District, a duly organized irrigation district within Nez Perce County, Idaho, Plaintiffs–Respondents,

v.CITY OF LEWISTON, an Idaho municipal corporation, Defendant–Appellant.

No. 38116.

Supreme Court of Idaho, Moscow, September 2011 Term.

Nov. 7, 2011.

Lewiston City Attorney, Lewiston, for appellant. Jamie C. Shropshire argued.

Creason, Moore, Dokken & Geidl, PLLC, Lewiston, for respondents. Theodore O. Creason and Todd D. Geidl argued.

W. JONES, Justice.

I. NATURE OF THE CASE

The City of Lewiston ("City") enacted Ordinance No. 4512, creating a stormwater utility and stormwater fee for the operation and maintenance of the City's stormwater system. Five government entities¹ ("Entities") subject to the stormwater fee brought suit seeking a declaratory judgment that the fee was an unconstitutional tax requiring authorization by the Legislature. The Entities thereafter filed their motion for summary judgment. The City filed its cross-motion for summary judgment asserting that the stormwater fee was authorized pursuant to the City's police powers, the Revenue Bond Act, the Local Improvement District Code, and various other provisions of the Idaho Code. Relying primarily on Brewster v. City of Pocatello, 115 Idaho 502, 768 P.2d 765 (1988), and finding no legislative authorization for the stormwater fee,² the district court granted summary judgment in favor of the Entities holding that the stormwater fee was an unconstitutional tax requiring authorization by the Legislature. In rendering its decision, the district court never addressed the Entities' assertion of immunity. The City filed an appeal of the district court's decision granting summary judgment in favor of the Entities. Because the stormwater fee is an unauthorized tax, the district court did not err in granting summary judgment in favor of the Entities.

II. FACTUAL AND PROCEDURAL BACKGROUND

The City's stormwater system consists of stormwater pipes, curbs, gutters, drainage ditches, detention ponds, and stormwater treatment facilities. In order to eliminate non-stormwater and pollutant discharge, the Clean Water Act, 33 U.S.C. § 1342(p)(1)-(6) (2008) requires municipalities discharging stormwater into the receiving waters of the United States to obtain a National Pollutant Discharge Elimination System permit ("NPDES permit"). The City's NPDES draft permit required it to undertake comprehensive management of its stormwater system to reduce pollutant loads from entering the receiving waters of the United States.

In response to these regulatory mandates, on August 11, 2008, the Lewiston City Council ("Council") enacted Ordinance No. 4512 ("Ordinance") creating the City's Stormwater Utility ("Stormwater Utility") and authorizing the imposition of a Stormwater Utility fee ("stormwater fee") to fund the Stormwater Utility's functions. Citing its police powers,³ the Ordinance asserts that the purposes of the Stormwater Utility and the stormwater fee were to reduce the effects of stormwater runoff from impervious surfaces in the City, including reducing property damage, preventing the flow of pollutants, and preserving the integrity of streets. The Ordinance also permitted the City to free-up $700,000 from its Street Maintenance Program⁴ by rolling part of its street sweeping and stormwater maintenance budget into the Stormwater Utility.

Recognizing that owners and possessors of property with impervious surfaces contribute to the total run-off, the Ordinance provides that "[t]he owner, agent, occupant, lessee, tenant, contract purchaser, or other person having possession or control of property or supervision of an improvement on the property" ("owners") are responsible for the stormwater fee. The rates provided in the Ordinance vary according to whether the property is classified as residential or non-residential. Residential property owners pay the same rate based on the number of "equivalent residential units" ("ERUs") that they own. An ERU is residential property with an impervious surface area of 4,000 square feet. Non-residential property owners' fees vary according to a sliding scale in which the number of ERUs is calculated based on a site-specific quantification of impervious surfaces utilizing aerial photography or personal observation.

As a result of the rate structures applying to all owners of property, there are many properties with impervious surfaces whose owners are charged by the Stormwater Utility, but whose runoff does not enter the stormwater drain because they have their own stormwater systems or because their neighborhoods are not connected to the stormwater system.⁵ The only exemptions from the stormwater fee are if the property is less than 2000 square feet as identified in the Nez Perce County property database, the property is classified as undeveloped, or the owner qualifies for "circuit breaker" status.⁶

In addition to the rates, the Ordinance provides an organization structure⁷ for the Stormwater Utility and an appeal process by which a landowner may challenge a fee as unwarranted or based on improper calculation of impervious surfaces or other aspect of the rate structure. The Ordinance also provides an enterprise fund in which all fees would be collected and separated from the general revenue. The revenues collected for the enterprise fund are to be used only for payment of the costs of "maintenance, operation, upkeep and repair and capital outlay of the stormwater system, including the payment of bonds issued to finance such capital outlay."⁸

To implement the Ordinance, the Council adopted Resolution No.2008–55 on October 27, 2008. Resolution 2008–55 set the base rate charge per ERU at $6 and assigned all residential parcels a value of one ERU to be paid at 100% of the base rate. The Resolution also phased-in the charge over a three year period, assessing 50% of the fee the first year (October 1, 2008 to September 30, 2009), 75% of the fee the second year (October 1, 2009 to September 30, 2010), and 100% of the fee after October 1, 2010.

The Council later adopted Resolution No. 2009–68 amending Resolution No. 2008–55 and extending the 50% phase-in rate for an additional year (from October 1, 2009 through September 30, 2010) and limiting the expenditure of "[a]ll Storm Water Utility Fees collected ... to [the] maint[enance], operat [ion] or enhance [ment] [of] the Storm Water Utility system of the City of Lewiston."

In practice, the revenues generated from the stormwater fees are divided between the City's street sweeping and maintenance of the stormwater system.⁹ The remaining 10% to 15% of the budget is allocated to NPDES compliance. As per its maintenance of the stormwater system, the City currently uses or intends on using stormwater utility revenue for what it defines as "stormwater activities,"¹⁰ including street surface repair, winter sanding and rock cleanup on roads, seal coat cleanup, street sweep training and equipment, shoulder guard curb work, curb and gutter patching, trash and debris clean up, road shoulder grading and ditching, weed control clean up, oil spill clean-up, tree and limb removal, hauling debris, and other interdepartmental charges assessed by the Street Maintenance Department and other departments and divisions.¹¹ Before the adoption of the Ordinance, most of these activities were paid out of the general revenue fund as part of the Street Maintenance Department's budget.

The City began billing its residential and non-residential property owners for stormwater fees on October 1, 2008. The Entities filed suit on September 28, 2009, seeking a declaratory judgment that the City acted outside of its constitutional authority in assessing an unauthorized tax, injunctive relief, a writ of prohibition, and a writ of mandate to stop the City from collecting the stormwater fee. The Entities thereafter filed their motion for summary judgment on April 2, 2010. The City filed its cross-motion for summary judgment on April 30, 2010, contending that the stormwater fee is authorized pursuant to the City's police powers, the Revenue Bond Act, the Local Improvement District Code, and various other statutory provisions under Title 50 of the Idaho Code. The district court issued its Memorandum Decision and Order on July 16, 2010, which granted summary judgment for the Entities' declaratory judgment claim and denied the City's cross-motion for summary judgment. The district court, thereafter, issued its Order for Entry of Final Judgment on the declaratory judgment claim on August 23, 2010.

III. ISSUE ON APPEAL

1. Whether the district court erred in granting the Entities' summary judgment motion alleging that the City's stormwater fee is an unauthorized tax?

IV. STANDARD OF REVIEW

When this Court reviews a district court's grant of summary judgment, it uses the same standard properly employed by the district court originally ruling on the motion. Lowder v. Minidoka Cnty. Joint Sch. Dist. No. 331, 132 Idaho 834, 837, 979 P.2d 1192, 1195 (1999). Summary judgment is proper "if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." I.R.C.P. 56(c). Movant has the burden of showing that no genuine issues of material fact exist. Stoddart v. Pocatello Sch. Dist. No. 25, 149 Idaho 679, 683, 239 P.3d 784, 788 (2010). This Court "liberally construe[s] the record in a light most favorable to the party opposing the motion, drawing all reasonable inferences in favor of that party." DBSI/TRI V v. Bender, 130 Idaho 796, 801–02, 948 P.2d...