Loup-Miller Const. Co. v. City and County of Denver

• Decision Date: 14 February 1984
• Docket Number: No. 82SA121,LOUP-MILLER,82SA121
• Citation: 676 P.2d 1170
• Parties: CONSTRUCTION CO., a corporation; Loup-Miller, a partnership; Loup-Miller Management Co.; Crestmoor-Downs Co.; Natasha Corporation; Mizel Realty Co.; First South Birch Company; First East Mexico Co.; Monaco Mortgage Co., a joint venture; F.I.G. Holding Co. II; Corsican Apartments, a joint venture; High Country Apartments, a joint venture; House of Rothschild, a joint venture; Casa Cordova Apartments, a joint venture; The Boardwalk Apartments, a joint venture; and Cedar Run Apartments, a joint venture, Plaintiffs-Appellants, v. The CITY AND COUNTY OF DENVER, a municipal corporation, Defendant-Appellee, and Kal Zeff, Intervenor, KWAL PAINTS, INC., a Colorado corporation; Titan Construction Co., a Colorado corporation; Mizel Commercial Contractors, Inc., a Colorado corporation; and Mizel Development Corporation, a Colorado corporation, on behalf of themselves and all other persons similarly situated, Plaintiffs-Appellants, v. The CITY AND COUNTY OF DENVER, a municipal corporation, Defendant-Appellee.
• Court: Colorado Supreme Court

Page 1170

676 P.2d 1170

LOUP-MILLER CONSTRUCTION CO., a corporation; Loup-Miller, a

partnership; Loup-Miller Management Co.; Crestmoor-Downs

Co.; Natasha Corporation; Mizel Realty Co.; First South

Birch Company; First East Mexico Co.; Monaco Mortgage Co.,

a joint venture; F.I.G. Holding Co. II; Corsican

Apartments, a joint venture; High Country Apartments, a

joint venture; House of Rothschild, a joint venture; Casa

Cordova Apartments, a joint venture; The Boardwalk

Apartments, a joint venture; and Cedar Run Apartments, a joint venture, Plaintiffs-Appellants, v. The CITY AND COUNTY OF DENVER, a municipal corporation,

Defendant-Appellee,

and

Kal Zeff, Intervenor,

KWAL PAINTS, INC., a Colorado corporation; Titan

Construction Co., a Colorado corporation; Mizel Commercial

Contractors, Inc., a Colorado corporation; and Mizel

Development Corporation, a Colorado corporation, on behalf

of themselves and all other persons similarly situated, Plaintiffs-Appellants, v. The CITY AND COUNTY OF DENVER, a municipal corporation,

Defendant-Appellee.

No. 82SA121.

Supreme Court of Colorado En Banc.

Feb. 14, 1984.

James H. Downey, Goldstein & Armour, P.C., Denver, for plaintiffs-appellants.

Stephen H. Kaplan, City Atty., Steven J. Coon, George J. Cerrone, Jr., Asst. City Attys., Denver, for defendant-appellee City and County of Denver.

DUBOFSKY, Justice.

This is an appeal ¹ from a judgment of the Denver District Court upholding the constitutionality of City and County of Denver (Denver) Municipal Ordinances Nos. 582 and 583, Series 1973, which governed charges and fees to finance the city's sanitary sewer facilities. ² The plaintiffs, Loup-Miller Construction Co., et al., are owners, managers, agents, and builders of apartment buildings who have allegedly paid sewer bills calculated under ordinance 582 and commercial entities who have received bills for the facilities development fee authorized by ordinance 583. ³ The plaintiffs sought declaratory and injunctive relief and a refund of fees paid under the ordinances, which relief was denied by the district court. We affirm the district court judgment.

Ordinance 582 created a category of sewer customers called "residential multiple unit dwelling buildings" (apartment buildings). Under the ordinance, apartment buildings were charged either a minimum service fee per "available unit of occupancy" or a fee calculated in accordance with Article 167.2-1(3) of the Revised Municipal Code of Denver (which governed sewer service charges for commercial and industrial customer classes), whichever was greater. Under Article 167.2-1(3) sewage rates for commercial and industrial customers were 95% of the amount charged by the Denver Board of Water Commissioners (water board) for those customers' water consumption. ⁴ Ordinance 582 resulted in a considerable increase in sewage bills for apartment buildings. According to testimony at trial the Wastewater Division of the Denver Public Works Department (public works department) recommended the increase to Denver City Council (city council) because apartment customers had not been paying their fair share of sewage costs. When apartment buildings' sewage charges were calculated solely as a percentage of water bills, the sewage charges reflected a quantity discount scheme utilized in calculating water bills. Because apartment buildings generally are metered as one customer, apartment residents were able to take advantage of the lower rates charged by the water board to large customers. Those who lived in single-family residences, on the other hand, were unable to take advantage of quantity discounts and therefore, prior to enactment of ordinance 582, paid proportionately more than did apartment dwellers for sewage service.

Ordinance 583 established a "facilities development fee," a one-time sewer charge to be paid by new customers when they were connected to the city's sanitary sewer system. According to testimony at trial, this fee was to defray the cost of expanding the system's treatment capacity for potential increased use by new customers.

The plaintiffs assert that: (1) ordinance 582 denied apartment building owners equal protection of the laws since, under the ordinance, the sewage bills for apartment buildings were calculated differently from those of other classes of customers; (2) ordinance 583 denied new sewer customers equal protection since it required only new customers to pay the facilities development fee; (3) several provisions of ordinances 582 and 583 were unconstitutionally vague; (4) the ordinances impermissibly provided for non-uniform property taxes; (5) ordinance 582 unconstitutionally delegated to the water board the power of city council to set sewage rates; and (6) ordinance 583 unconstitutionally delegated to the public works department city council's power to impose sewer charges.

I.

The plaintiffs claim that the ordinances violated the equal protection clauses of the United States and Colorado Constitutions. U.S. Const. Amend. XIV; Colo. Const. Art. II, Sec. 25. The equal protection doctrine does not require that " 'all persons be dealt with identically, but it does require that a distinction made have some relevance to the purpose for which the classification is made.' Baxstrom v. Herold, 383 U.S. 107, 86 S.Ct. 760, 15 L.Ed.2d 620 (1966)." People v. Chavez, 629 P.2d 1040 (Colo.1981). Except for cases involving fundamental rights or suspect classifications not at issue here, equal protection requires only that the distinctions made be rationally related to legitimate governmental purposes. People v. Velasquez, 666 P.2d 567 (Colo.1983); Dawson v. Public Employees' Retirement Association, 664 P.2d 702 (Colo.1983); People v. Montoya, 647 P.2d 1203 (Colo.1982); Colorado Auto & Truck Wreckers Association v. Department of Revenue, 618 P.2d 646 (Colo.1980). A legislative act is presumed constitutional; the burden is upon the party attacking it to establish its unconstitutionality beyond a reasonable doubt. Dawson v. Public Employees' Retirement Association, supra; People v. Alexander, 663 P.2d 1024 (Colo.1983); Bollier v. People, 635 P.2d 543 (Colo.1981); People in the Interest of C.M., 630 P.2d 593 (Colo.1981). In this case, the plaintiffs have failed to overcome the presumption of constitutionality.

At trial, the plaintiffs argued that, because the minimum fee mandated by ordinance 582 applied only to apartment buildings, ⁵ the ordinance caused the sewage rates charged to apartment buildings to be calculated differently than those charged to single-family residences, and that ordinance 582 raised by a considerable amount the sewage rates for apartment buildings. The evidence showed, however, that even after ordinance 582 was in effect, average sewage charges per resident remained lower for apartment buildings than for single-family residences. Although the plaintiffs contend that there may be better ways to equalize sewage rates for residential customers, the equal protection clauses do not require that city council select the best possible method for allocating sewage costs. Smith v. Charnes, 649 P.2d 1089 (Colo.1982). ⁶ We agree with the district court that the record is sufficient to establish a rational basis for the distinction made by ordinance 582 between single-family residences and apartment buildings.

The plaintiffs also assert that the application of the minimum rate per unit under ordinance 582 unconstitutionally distinguished apartment buildings from commercial buildings such as hotels or office buildings. The plaintiffs did not present evidence at trial to establish that apartment buildings and commercial buildings are similarly situated. See People v. Layton, 200 Colo. 59, 612 P.2d 83 (1980). Absent any evidence to the contrary, we presume that city council may rationally distinguish between apartment buildings and other commercial buildings in calculating sewage rates. Millis v. Board of County Commissioners of Larimer County, 626 P.2d 652 (Colo.1981); Sweeney v. Summers, 194 Colo. 149, 571 P.2d 1067 (1977).

In addition, the plaintiffs argue that ordinance 583, providing for an assessment of a facilities development fee for new connections to the city's sewer system, violated the equal protection clauses. The plaintiffs contend that the fee unconstitutionally discriminated against new customers because only new customers had to pay it. Evidence at trial showed that new connections to the sewage system are related to a need for increased treatment capacity and that the purpose of the fee was to defray the costs of developing increased capacity. The plaintiffs responded to the evidence with the assertion that ordinance 583 did not, on its face, require that the fee be used to defray costs rationally related to the addition of new customers to the system. Although the ordinance was not as clear as it might be, the use of the term "facilities development fee" reveals that city council intended the fee to be used to develop the increased capacity necessary to serve new sewer connections. There is nothing in the record to suggest that the funds generated by the fee have been used otherwise. Since new connections are more directly related to the need for increased capacity than old connections, there is a rational basis for the distinction made by the ordinance. City of Arvada v. City and County of Denver, 663 P.2d 611 (Colo.1983). ⁷

We are satisfied that ordinances 582 and 583 had a rational basis related to a legitimate governmental purpose and, therefore, neither ordinance violated equal protection.

II.

The plaintiffs argue that ordinances 582 and 583 were unconstitutionally vague in several respects and therefore violated due process. ⁸ The essence of a vagueness challenge is that the law is not drafted with sufficient clarity to provide people of ordinary intelligence with fair notice of what is required of them. People v. Smith, 638 P.2d 1 (Colo.1981); Holcomb v. Denver, 199 Colo. 251, 606...