Northampton Corp. v. Washington Suburban Sanitary Commission

• Citation: 278 Md. 677,366 A.2d 377
• Decision Date: 07 December 1976
• Docket Number: No. 79,79
• Parties: NORTHAMPTON CORPORATION et al. v. WASHINGTON SUBURBAN SANITARY COMMISSION.
• Court: Court of Appeals of Maryland

Page 677

278 Md. 677

366 A.2d 377

NORTHAMPTON CORPORATION et al. v. WASHINGTON SUBURBAN SANITARY COMMISSION.

No. 79.

Court of Appeals of Maryland.

Dec. 7, 1976.

Glenn T. Harrell, Jr., Upper Marlboro, George A. Brugger, Seabrook (Fossett & Brugger, Seabrook, William E. Knight, Shipley, O'Malley & Miles, Upper Marlboro, Charles G. Dalrymple, David D. Freishtat and Linowes & Blocher, Silver Spring, Stephen R. Creyke and Williams, Haynes & Creyke, Bethesda, and Richard Schifter, William B. Hoffman and Fried, Frank, Harris, Shriver & Kampelman, Washinton, D. C., on the brief), for appellants.

Paul T. Sisson, Hyattsville (J. Eugene Cleary, Hyattsville, on the brief), for appellee.

Argued before SINGLEY, SMITH, DIGGES, ELDRIDGE and ORTH, JJ.

SINGLEY, Judge.

This case is a frontal attack mounted by 13 property owners (the Property Owners) against an interim sewer service charge (the Service Charge) imposed by Washington Suburban Sanitary Commission (the Commission).

The Commission is a body corporate, created by Chapter 122 of the Laws of 1918, see State v. Canova, Md., 365 A.2d 988 (1976) (No. 41, September Term, 1976, decided November 15, 1976), and charged with the duty of providing water and sewer service in the Washington Suburban Sanitary District (the Sanitary District), comprising most of Prince George's and Montgomery Counties, which are the Maryland counties contiguous to the District of Columbia.

Commencing in May of 1970, the State Department of Health and Mental Hygiene imposed restrictions on new sewer connections, as did the Commission itself, as a result of the overtaxing of sewage treatment facilities. These restrictions, usually referred to as the 'sewer moratorium,' severely curtailed new residential and commercial construction in the Sanitary District. A detailed discussion of the problems created by the moratorium appears in Smoke Rise, Inc. v. Washington Suburban San Com'n, D.C., 400 F.Supp. 1369 (1975).

In connection with the imposition of the moratorium, the State instructed the Commission to undertake the expansion of existing sewage treatment and transmission facilities and to embark on a program of constructing new facilities.

Because of the time required to expand existing facilities and to construct new permanent facilities and the depressed condition of the construction industry resulting from the moratorium, the Commission in March, 1975 turned to the construction of 'interim' sewage treatment plants: less costly plants of limited capacity, with a projected useful life of five to 10 years.

Three interim sewage treatment plants are being built, with projected capacities of between one and three million gallons per day. Two are in Montgomery County, in the Seneca and Horsepen Drainage Basins. One is in Prince George's County, in the Anacostia Basin. The Commission has reserved 20% of the capacity of the Seneca plant for the relief of the Cabin John Basin and one-half of the capacity of the Anacostia plant for the relief of overflow conditions in the Anacostia Basin.

In order to finance the construction of the interim treatment plants, the Commission, by resolution effective 1 May 1975, adopted a scheme of service charges which would be imposed on all connections to be made to the sewer system in the Sanitary District until adequate permanent facilities are operating. ¹

The charges, which are in effect for the entire Sanitary District, except for the area served by the Damascus Sewage Treatment Plant in upper Montgomery County, are fixed as follows:

'(1) A dwelling unit and each separate unit within a multi-dwelling unit, shall be subject to an Interim Sewerage Service Charge of $750.00.

'(2) Single family dwelling units within an apartment building shall be subject to an Interim Sewerage Service Charge of $500.00 per unit.

'(3) All other structures, not otherwise excluded herein, shall be subject to an Interim Sewerage Service Charge based upon $750.00 per each 10 commercial fixture units, subject to a minimum charge of $750.00, and educational institutions, volunteer fire departments, churches and other eleemosynary associations, public service buildings and each trailer space in a trailer camp shall be included herein at 1/2 the total charge, as applicable.

'(4) The following categories shall be subject to 1/3 of the Interim Sewerage Service Charge, as applicable.

(a) dwelling units in existence on the effective date of this Resolution.

(b) property where prior commitments have been made and house connections paid, and are under construction as herein defined.

(c) service to properties, as defined in Section A, served by private sewage treatment plants . . .'

Payment of the Service Charge relating to service approved for existing units prior to the enactment of the resolution was to be in full at the time of payment of connection fees. For all other properties for which service had been approved prior to the enactment of the resolution one-third to be paid within 60 days of the effective date of the resolution, the balance to be paid when house connection fees are paid or within 12 months of the date when service was approved, whichever is the earlier.

As to service approved by the Commission after the enactment of the resolution, one-third of the charge was to be paid within 60 days of the Commission's approval of the application for service, with the balance payable upon payment of house connection fees or within 12 months from the date of approval of service, whichever is the earlier.

In June and July of 1975, the Property Owners filed bills of complaint in the Circuit Court for Prince George's County, seeking interlocutory and permanent injunctions prohibiting the Commission from collecting the Service Charge. Interlocutory injunctions were issued pending consideration of the cases on their merits. The cases were consolidated for purposes of trial, and after a hearing, the chancellor (Couch, J.) upheld the levying of the Service Charge and denied injunctive relief. The Property Owners noted an appeal to the Court of Special Appeals. We granted certiorari before the case was heard in that court.

The Property Owners assert that there are six reasons why they should have been granted the relief which they prayed. We shall consider each of them.

(i)

The Commission exceeded its statutory authority in attempting to finance capital construction projects by the imposition of a Service Charge.

This argument focuses on two chapters of the Washington Suburban Sanitary District Code (1970) (the WSSD Code), codified by Chapter 115 of the Laws of 1971: Chapter 4, 'Bonds and Anticipation Notes Generally,' and Chapter 6, 'Rates and Charges Generally.'

Section 4-1(a) is a broad grant of authority for the issuance of bonds,

'For the purpose of providing funds for the design, construction, reconstruction, establishment, extension enlargement, purchase or condemnation of the water, sewerage and drainage systems in the sanitary district . . ..'

Section 4-10(a) deals specifically with the issuance of bonds for trunk sewers, pumping stations and sewage disposal facilities.

In imposing the Service Charge, the Commission acted under Chapter 6 of the WSSD Code. Section 6-1 empowers the Commission to make reasonable and uniform connection charges. Section 6-3(a) permits the creation of subdistricts where

'(T)he conditions for service from any of its systems, including the financial aspect of instituting and maintaining such service, are substantially different from those obtaining generally in the sanitary district . . ..'

and provides for a nonuniform rate or charge.

The Property Owners argue that the WSSD Code mandates that capital construction be financed only by the issuance of bonds and bond anticipation notes, and not by the imposition of a service or special connection charge under Section 6-1.

Further, they argue that the Commission had distorted the provisions of Section 6-3 by in effect making almost the entire Sanitary District a subdistrict in order to escape the requirement of uniformity.

The trial court did not take such a restrictive view of the matter and neither do we. There are obvious reasons why a facility with a projected useful life of from five to 10 years should not be financed by a long-term borrowing. Additionally, we are satisfied that the Commission has authority under Section 6-1 to impose a connection charge which reflects any 'extraordinary expense in the maintenance and operation of the . . . sewerage . . . (system) under its control.'

Nor are we impressed by the argument that there was a distorted application of the provisions of Section 6-3. The Commission created one class of properties comprised of properties the owners of which had approvals for sewer service which could not be provided because of the moratorium on the one hand, and of properties where the owner's applications for sewer service could not be granted in the future on the other, without the additional capacity provided by the interim treatment plants. A schedule of uniform charges was adopted for virtually the entire Sanitary District.

(ii)

The Service Charge as applied to the Property Owners violates Maryland law because it constitutes a special assessment levied upon persons who receive no special benefit from the public improvements so funded.

This argument, while applicable to a special or benefit assessment, where a separate levy is imposed on selected properties, VFW v. Montgomery County, 207 Md. 442, 448, 115 A.2d 249 (Silver Spring Memorial Post v. Montgomery County), 207 Md. 442, 115 A.2d 249, 251 (1955) has no relevance to this case.

The notion that because the properties involved may not be served by the interim facilities the owners should not be required to pay the Service Charge overlooks the fact that the Property Owners are specially benefited by being permitted to make the sewer connections which have been denied them heretofore.

Our cases make it...