329 P.3d 1
Or. Ct. App.2014Background
- Rogue Valley Sewer Services (RVS), a sanitary authority under ORS ch. 450, provided sewer service in Phoenix by contract and annexation.
- Phoenix, a home‑rule city under a 2009 charter, enacted an ordinance imposing a 5% franchise fee on RVS gross revenues from operations within the city, stating the fee reimbursed city costs for rights‑of‑way impacts.
- RVS sued for declaratory and injunctive relief, arguing the ordinance was unauthorized or preempted by state law and effectively set RVS rates.
- The trial court granted summary judgment for the city, ruling the city had authority under its charter to impose the fee; RVS appealed.
- The trial court declined to decide separately whether the fee amount was reasonable because RVS had not pleaded that claim; RVS did not challenge that procedural ruling on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Phoenix may impose a 5% franchise fee on RVS | RVS: As a public sanitary authority, state law limits municipal imposition of fees; absent express statutory authorization, city cannot charge RVS | City: Home‑rule charter grants broad authority; ORS 450.815(7) and right‑of‑way powers permit city conditions/fees | City may impose the fee under home‑rule authority; not preempted by state law |
| Whether ORS ch. 450 preempts the city ordinance | RVS: Sanitary authority statutes occupy field; ordinance is de facto rate‑setting and conflicts with RVS powers to set charges | City: Chapter 450 constrains RVS, not cities; no clear legislative intent to preempt city regulation of rights‑of‑way usage | No preemption; ordinance can operate concurrently with ORS ch. 450 |
| Whether ORS 221.420 / 221.450 (franchise/privilege statutes) preempt city fee | RVS: Statutes list specific utilities; omission of sanitary authorities shows legislature intended exclusivity | City: Statutes do not manifest intent to preempt cities from imposing other fees; statutes coexist with home‑rule powers | Statutes do not preempt fee; absence of express prohibition means concurrent operation is permissible |
| Whether the amount of the fee raised a genuine issue of fact | RVS: Affidavits showed factual dispute whether 5% reasonably reimburses city costs and thus is permissible | City: RVS did not plead or request declaratory relief on fee reasonableness; matter not properly before court | Court did not decide reasonableness; trial court properly declined to rule because claim was not pleaded or tried by consent |
Key Cases Cited
- LaGrande/Astoria v. PERB, 281 Or. 137 (Or. 1978) (local action valid if authorized by charter/statute and not contravening state/federal law)
- US West Commc’ns v. City of Eugene, 336 Or. 181 (Or. 2003) (statutory limits on one fee do not automatically prohibit other municipal fees absent clear preemptive intent)
- AT&T Commc’ns v. City of Eugene, 177 Or. App. 379 (Or. Ct. App. 2001) (absence of statutory language prohibiting other municipal charges means no preemption)
- Springfield Utility Bd. v. Emerald PUD, 191 Or. App. 536 (Or. Ct. App. 2004) (declines to extend narrow holdings to broadly limit city charter authority over other governmental entities)
- Jarvill v. City of Eugene, 289 Or. 157 (Or. 1980) (municipalities may assume powers to impose taxes absent state prohibition)
- Proctor v. City of Portland, 245 Or. App. 378 (Or. Ct. App. 2011) (distinguishing when a local fee is preempted because it is a statutorily defined business license tax)
- Portland v. Multnomah County, 135 Or. 469 (Or. 1931) (public property in public use is exempt from taxation; narrow rule on taxation of municipal property)
- Cent. Lincoln P.U.D. v. State Tax Comm’n, 221 Or. 398 (Or. 1960) (statutory intent to tax municipalities must be clearly manifested)