Robes v. Town of Hartford

• Decision Date: 10 December 1993
• Docket Number: No. 92-098,92-098
• Citation: 636 A.2d 342,161 Vt. 187
• Court: Vermont Supreme Court
• Parties: Peter ROBES, Ash Bullard, Charles Potter, Michael Wood, Roy Hathorn and Fred Davis, v. TOWN OF HARTFORD, et al.

Page 342

636 A.2d 342

161 Vt. 187

Peter ROBES, Ash Bullard, Charles Potter, Michael Wood, Roy Hathorn and Fred Davis, v. TOWN OF HARTFORD, et al.

No. 92-098.

Supreme Court of Vermont.

Dec. 10, 1993.

William D. Cohen of Abell, Kenlan, Schwiebert & Hall, P.C., Rutland, for plaintiffs-appellants.

Peter F. Welch of Welch, Graham and Manby, White River Junction, for defendant-appellee.

Before ALLEN, C.J., and GIBSON, DOOLEY, MORSE and JOHNSON, JJ.

JOHNSON, Justice.

Plaintiffs, developers of new residential buildings in the Town of Hartford, appeal from the order of the superior court, which held that 24 V.S.A. § 3615, as that statute read in 1986, authorized the Town of Hartford to impose an impact fee on new developments to finance future expansion of the Town's sewage capacity. Defendants appeal the trial court's award of attorney's fees to plaintiffs. We affirm in part and reverse in part.

The Town of Hartford operates a municipal sewage system to which all residential buildings are required to be connected. On December 29, 1986, the Town's Board of Selectmen passed a resolution imposing a "Plant Impact Fee" on all residential structures not occupied before January 1, 1987, and on existing residential structures requiring additional demand for sewage services after January 1, 1987. The Town assessed the impact fee at a rate of $600 per bedroom and assumed each structure would have three bedrooms, for a total fee of $1800 for each affected structure. The purpose of the Plant Impact Fee was to collect capital funds to finance the future expansion of the Town's sewage capacity.

Plaintiffs, after incurring and paying the Plant Impact Fee, filed suit to declare the Plant Impact Fee illegal, to enjoin the Town from further enforcement, and to recover their payments and other damages, including attorney's fees and costs.

After a bench trial, the court entered judgment for defendants. The court held that 24 V.S.A. § 3615 authorized the Town to impose the Plant Impact Fee and that the fee rate was both reasonable and rationally related to the Town's purpose of financing expansion or new construction of sewage facilities to meet anticipated needs. The court, however, also held that the 1986 resolution ¹ was "defective" insofar as it lacked a mechanism for returning capital funds that went unexpended after a reasonable period of time. The court found that this defect was not fatal to the operation of the Plant Impact Fee and ordered the Town to amend its ordinance to require the refund of monies not expended within six years of collection. Nevertheless, the court awarded attorney's fees to plaintiffs, on the theory that plaintiffs' suit, though not successful, had been "meritorious" in bringing to light a defect that ultimately preserved a so-called "common fund."

Plaintiffs appeal the trial court's findings that the Town had acted pursuant to statutory authority when it imposed the impact fee and that the fee rate was reasonable and related to a legitimate public purpose. Defendants, on cross-appeal, claim that it was error for the trial court to award attorney's fees and costs to plaintiffs, who had not prevailed on any of their claims. We address these issues in turn.

I.

Plaintiffs first argue that the trial court erred in holding that 24 V.S.A. § 3615 authorized the Town to impose the Plant Impact Fee. At the time the Town enacted its Plant Impact Fee in 1986, § 3615 authorized a municipality to establish sewage disposal charges, "to be paid at such times and in such manner as the [municipal sewage disposal] commissioners may prescribe," based on: (1) metered water consumption; (2) the number and kind of plumbing fixtures; (3) the number of persons residing in or frequenting the premises served; (4) the appraised value of the premises; or (5) a combination of the enumerated bases or "any other equitable basis." 24 V.S.A. § 3615 (1983) (amended 1989). ²

Plaintiffs argue that § 3615 permitted municipalities to impose a sewage charge only to recoup money expended on an existing municipal sewage system, not to collect money in anticipation of future needs. Plaintiffs also argue that even if § 3615 did contemplate charges for future needs, the statute required that the Town use an "equitable basis" for establishing such charges; they contend that the Plant Impact Fee does not use an "equitable basis" and must be struck down. We believe plaintiffs' interpretation of § 3615 is too narrow.

Before turning to plaintiffs' arguments, we note that in Vermont a municipality has only those powers and functions expressly granted to it by the legislature, such additional functions as may be incident, subordinate or necessary to the exercise thereof, and such powers as are essential to the declared objects and purposes of the municipality. Bryant v. Town of Essex, 152 Vt. 29, 36-37, 564 A.2d 1052, 1056 (1989). We construe municipal acts strictly, and we resolve any fair, reasonable, substantial doubt concerning a municipality's authority to act against the municipality. In re Ball Mountain Dam Hydroelectric Project, 154 Vt. 189, 192, 576 A.2d 124, 126 (1990).

A.

Plaintiffs contend that § 3615 cannot authorize the Plant Impact Fee because the fee is not a "sewage disposal charge" based on actual use. They point to our holding in Kirchner v. Giebink, 150 Vt. 172, 552 A.2d 372 (1988), to support their contention. In Kirchner, we held that § 3615 contained "limiting statutory language," id. at 183, 552 A.2d at 379, because it "authorize[d] 'sewage disposal charges' based upon five possible means of determining a fair charge for use," id. at 181, 552 A.2d at 378, and did so in "very specific language," id. at 183, 552 A.2d at 379. Plaintiffs argue that the Town failed to base its Plant Impact Fee on one of the five bases enumerated in § 3615. We disagree.

Defendants do not dispute that they did not base the Plant Impact Fee on any of the first four bases enumerated in § 3615. Defendants claim, however, that they acted pursuant to § 3615(5), which permits sewage charges based on a combination of the enumerated bases "or any other equitable basis." Defendants argue that this Court, in Handy v. City of Rutland, 156 Vt. 397, 400-01, 598 A.2d 114, 116 (1990), recognized that § 3615(5) authorized sewage impact fees to finance system improvements.

In Handy, we held that § 3615 authorized the City of Rutland to impose an impact fee on extraterritorial users to defray the costs of expanding the city's sewage system. Id. at 402, 598 A.2d at 117. We acknowledged that " § 3615 does limit the bases upon which a municipality may fix sewer rates." Id. But we also found that § 3615 permits charges to be paid " 'in such manner as the [municipal sewage] commissioners may prescribe' "; that § 3615(5) permits such charges to be based on " 'a combination of any of [four enumerated] bases or any other equitable basis' "; and that " '[t]he [sewage] commissioners may change the rates of such charges from time to time as may be reasonably required.' " Id. at 400-01, 402, 598 A.2d at 116, 117 (quoting 24 V.S.A. § 3615 (1983) (amended 1989)).

Plaintiffs contend that Handy authorizes only extraterritorial exactions under § 3615, and not, as here, municipal exactions on planned sewage use within the municipality's borders. Plaintiffs are correct that our decision in Handy involved an exaction on extraterritorial users not otherwise subject to municipal controls. Id. at 402, 598 A.2d at 117. But our decision to uphold the city's authority under § 3615 did not rely on the exaction's extraterritorial nature. As we stated in Handy, "Vermont law ... does not distinguish between resident and nonresident customers." Id. at 404, 598 A.2d at 118. Rather, the extraterritorial nature of the city's exaction served to clarify the scope of authority provided in § 3615. Because the plaintiffs in Handy were not residents of the City of Rutland subject to other municipal charges or controls, we found no conflict between § 3615 and other statutory sections under which the City might have imposed sewage charges. Id. at 402, 598 A.2d at 117. In the absence of such conflict, we were easily able to conclude "that the type of hookup fee imposed by the City of Rutland was within the scope of fees authorized by § 3615, which allows municipal sewer commissioners to establish charges to be paid 'in such manner as the commissioners may prescribe.' " Id. (quoting 24 V.S.A. § 3615 (1983) (amended 1989)).

We believe that in this case the Town also exercised proper authority under § 3615. When the Town passed its 1986 resolution, regulations required the Town to begin planning for expanded sewage capacity when its current facilities reached eighty percent of total capacity. In implementing the Plant Impact Fee through the 1986 resolution, the Town exercised a laudable degree of foresight and attempted to soften the blow that a more rapid planning and construction schedule might entail. The Town's foresight was borne out by the fact that daily usage of its sewage system increased from forty-five percent of capacity to sixty-five percent of capacity in the time between the passage of the 1986 resolution and the 1991 trial. Under these circumstances, we are hard pressed to view the Town's actions as falling outside the limits of § 3615.

Plaintiffs, however, argue that the provisions of chapters 97 and 101 of Title 24, when read in pari materia, restrict a municipality's power to impose sewage charges under § 3615. Specifically, they contend that even if we read § 3615 to allow a municipality to impose sewage charges not based on actual use, that power is limited by the restrictions on the use of those charges authorized in § 3616. We disagree.

Plaintiffs are correct that this Court must read provisions that are part of the same statutory scheme in pari materia. Drumheller v. Shelburne Zoning Bd. of Adjustment, 155 Vt. 524, 529, 586 A.2d 1150, 1152 (1990). Moreover, we...