CITY OF GAINESVILLE, Appellant,
v.
STATE of Florida, DEPARTMENT OF TRANSPORTATION, Appellee.
District Court of Appeal of Florida, First District.
*520 Marion J. Radson, City Attorney, and Elizabeth A. Waratuke, Litigation Attorney, Office of the City Attorney, Gainesville, for Appellant.
Pamela S. Leslie, General Counsel, and Gregory G. Costas, Assistant General Counsel, Florida Department of Transportation, Tallahassee, for Appellee.
C. Allen Watts of Cobb, Cole & Bell, Daytona Beach, for Amicus Curiae Florida Association of Stormwater Utilities.
James R. English, City Attorney, and Linda R. Hurst, Assistant City Attorney, Tallahassee, for Amicus Curiae City of Tallahassee.
O. Earl Black, Jr., Assistant General Counsel, Department of Management Services, *521 Tallahassee, for Amicus Curiae State of Florida Department of Management Services.
BENTON, J.
The City of Gainesville (City) filed a complaint seeking a judgment declaring that the stormwater utility charges the City has billed the Department of Transportation (DOT) on account of its property at 2006 N.E. Waldo Road were valid utility fees, and requiring DOT to pay the fees. By amended final judgment of dismissal, the trial court dismissed the City's amended complaint against DOT, ruling that the ordinance authorizing the stormwater utility charges, sections 27-236-27-244, Gainesville Code (1998), imposed special assessments the City could not collect from a state agency, and did not authorize utility fees. We reverse as to the declaratory judgment, and affirm dismissal of the damages count, but conclude that dismissal of that count with prejudice was premature, and remand for further proceedings consistent with this opinion.
I.
Count one of the amended complaint seeks a declaratory judgment that the City's stormwater utility charge is a valid utility fee. In conformity with the ordinance, the amended complaint alleges, the City has regularly billed DOT for stormwater management utility services. The amended complaint alleges that the City bills stormwater utility fees monthly along with charges for electricity, gas, water and wastewater utilities; that the stormwater utility ordinance does not create or purport to create a lien on property served; and that the City may collect delinquent charges by engaging a collection agency or, as in the present case, by filing a lawsuit itself. See § 27-244(d), Gainesville Code (1998).
Attached to the amended complaint, the City's ordinance requires charges "based on the cost of providing stormwater management services to all properties within the city [which] may be different for properties receiving different classes of service." § 27-241(a), Gainesville Code (1998). The ordinance provides that stormwater management service charges are to be computed using equivalent residential units (ERUs) of 2,300 square feet, a figure which represents "the estimated average impervious area for all developed, detached single-family properties in the city." Id. § 27-237. Service charges for commercial property are computed by measuring the amount of developed, impervious square footage on the property, dividing by 2,300, and multiplying the number of ERUs by an ERU rate. See id. § 27-241(b)(3).
Undeveloped property is exempt, see id. § 27-241(b)(5), as is property which does not contribute runoff to the Gainesville stormwater management system. See id. § 27-241(b). By retaining stormwater on site, a property owner may earn "retention credits" which reduce the amount of the fee, and may, by retaining all stormwater attributable to development on site, avoid paying the fee altogether. See id. §§ 27-237, 27-241(b)(3). The administrative complaint alleges that stormwater utility fees the City collects are segregated and used only for stormwater management purposes. Count two alleges that DOT has refused to pay the fees, and seeks judgment against DOT for the unpaid charges.
In its motion to dismiss amended complaint, DOT takes the position that DOT's status as a state agency precludes liability because "[a]s a matter of law the stormwater fee is a tax or special assessment." DOT's motion to dismiss asserts that "[s]ince there is no law specifically allowing the City of Gainesville to impose such tax or special assessment against the State of Florida, the Department may not be charged the stormwater fee." But the City does not contend that state property can be taxed, or that state property can be specially assessed, absent a statute authorizing special assessments specifically on state property, either explicitly or by "necessary *522 implication." Blake v. City of Tampa,
Dismissing both counts of the amended complaint, the circuit court ruled that the amounts the City collects from property owners for stormwater runoff management and treatment must be deemed, as a matter of law, not fees for utility services, but special assessments which cannot be enforced against a state agency like DOT. Special assessments are, to be sure, one statutorily authorized means for financing construction of municipal stormwater management systems.[1]See Sarasota County v. Sarasota Church of Christ, Inc.,
II.
Whether a complaint should be dismissed is a question of law. On appeal of a judgment granting a motion to dismiss, the standard of review is de novo. See Andrews v. Florida Parole Comm'n,
III.
On the merits, the threshold question is whether Florida law allows a city *523 to collect utility fees for managing stormwater runoff. We answer this threshold question in the affirmative. The Florida Constitution grants municipalities "governmental, corporate and proprietary powers to enable them to ... render municipal services" and the right to "exercise any power for municipal purposes except as otherwise provided by law." Art. VIII, § 2(b), Fla. Const. See § 166.021(1), Fla. Stat. (2000); Contractors and Builders Ass'n v. City of Dunedin,
Acknowledging the importance of managing and treating the state's stormwater runoff, the Legislature mandated some fifteen years ago that the Department of Environmental Regulation assess the efficacy of stormwater management programs then in existence. See Ch. 86-186, § 15, at 1349, Laws of Fla. Later, the Legislature directed local governments to work in conjunction with the Department to develop stormwater management programs. See Ch. 89-279, § 32, at 1626-27, Laws of Fla. (codified at § 403.0891, Fla.Stat. (1989)). Eventually, a statute was enacted which, like the constitution, antecedent general law, and the special act, authorizes the City to construct, operate and finance a stormwater management utility. See § 403.0891, Fla.Stat. (2000) ("[L]ocal governments shall have the responsibility for the development of ... stormwater management programs.").
Pertinent here is statutory authorization for local governments to "[c]reate one or more stormwater utilities and adopt stormwater utility fees sufficient to plan, construct, operate, and maintain stormwater management systems." § 403.0893(1), Fla.Stat. (2000). "The imposition of fees for the use of a municipal utility system is not an exercise of the taxing power nor is it the levy of a special assessment." City of Dunedin v. Contractors and Builders Ass'n,
These statutes make very clear that municipalities have the option of establishing stormwater management systems as traditional utilities and financing them by collecting utility fees. Accord City of Cocoa v. School Bd. of Brevard County,
IV.
DOT argues that the decision in Port Orange supports its contention that the *524 charges the City seeks to collect from DOT are not utility fees. Deciding in Port Orange that purported "transportation utility fees" the city sought to levy amounted in law to an unauthorized ad valorem tax on property, our supreme court said:
In City of Boca Raton v. State,595 So.2d 25 (Fla.1992), this court noted that a tax is an enforced burden imposed by sovereign right for the support of the government, the administration of law, and the exercise of various functions the sovereign is called on to perform. Klemm v. Davenport,100 Fla. 627 , 631,129 So. 904 , 907 (1930). Funding for the maintenance and improvement of an existing municipal road system, even when limited to capital projects as the circuit court did here, is revenue for exercise of a sovereign function contemplated within this definition of a tax.
User fees are charges based upon the proprietary right of the governing body permitting the use of the instrumentality involved. Such fees share common traits that distinguish them from taxes: they are charged in exchange for a particular governmental service which benefits the party paying the fee in a manner not shared by other members of society, National Cable Television Assn. v. United States,415 U.S. 336 , 341,94 S.Ct. 1146 , 1149,39 L.Ed.2d 370 (1974); and they are paid by choice, in that the party paying the fee has the option of not utilizing the governmental service and thereby avoiding the charge. Emerson College v. City of Boston,391 Mass. 415 ,462 N.E.2d 1098 , 1105 (1984) (citing City of Vanceburg v. Federal Energy Regulatory Comm'n,571 F.2d 630 , 644 n. 48 (D.C.Cir.1977), cert. denied,439 U.S. 818 ,99 S.Ct. 79 ,58 L.Ed.2d 108 (1978)). The above concept of user fees was approved by this Court in City of Daytona Beach Shores v. State,483 So.2d 405 (Fla.1985). The City's transportation utility fee falls within our definition of a tax, not our definition of a user fee.
City of Port Orange,
A.
While the amended complaint alleges that the "stormwater fee applies to all properties within the City using or benefitting from the system, including all buildings and properties owned by the City and all other governmental entities," it also alleges that the "City's ordinance does not impose any charge on undeveloped and unaltered land" and that "[d]eveloped land is charged only to the extent that it contributes stormwater to the stormwater utility system." Under these allegations, a landowner does have the option to refuse stormwater management services and so avoid any fees either by refraining from developing the land or, if the land has been developed, by preventing runoff from leaving the property or, as the amended complaint further alleges, by assuring that "stormwater runoff from the site does not impact stormwater utility services.... An example would be property located on the edge of the City [from] which runoff drains to property outside the City." Just as DOT could haul its own solid waste to the landfill itself, dig its own well, or generate its own electricity, it could construct swales, berms, retention ponds and the like to contain all stormwater runoff on its own property and thereby, according to the allegations of the amended complaint, avoid Gainesville's stormwater utility fees.
The unavoidable "transportation utility fee" at issue in Port Orange was different in this respect. See City of Port *525 Orange,
B.
As for DOT's claim that the City's stormwater utility fees do not correlate exactly with the benefits each individual user of the service receives, we note that the City attempted, by attaching documents to a memorandum in opposition to DOT's motion to dismiss the amended complaint, to bring to the court's attention billing records showing how, in practice, fees for use of the stormwater management system were billed. On DOT's motion, the trial court struck these documents as having no role to play in consideration of the motion to dismiss. The propriety of this ruling is not in question. But the amended complaint's well-pleaded allegations plainly do not establish DOT's contention that the City's fee schedule renders the ordinance defective.
The amended complaint alleges that charges are "`based on the cost of providing stormwater management services to all properties within the city and may be different for properties receiving different classes of service.'" Stormwater runoff, of course, like wastewater and solid waste, cannot feasibly be metered; it differs from potable water, gas and electricity, in this regard. But the amended complaint incorporates the ordinance which sets out the City's equivalent residential unit methodology in some detail. The amended complaint also alleges compliance with authorizing statutes generally. The City is entitled to a chance to prove that its ordinance "assess[es] the cost of the program to the beneficiaries based on their relative contribution to its need ... [and] operate[s] as a typical utility which bills services regularly, similar to water and wastewater services." § 403.031(17), Fla. Stat. (2000).
In setting utility rates, moreover, municipalities enjoy a certain latitude. See State v. City of Miami,
In Florida, it is a well recognized principle of law that rate-setting for municipal utilities is a legislative function to be performed by legislative bodies like local municipal governments and the commissions to which these bodies delegate such authority. Cooksey v. Utilities Comm'n.,261 So.2d 129 (Fla.1972); Cooper v. Tampa Electric Co., [154 Fla. 410 ,17 So.2d 785 (1944) ]; Southern Utilities Co. v. City of Palatka,86 Fla. 583 ,99 So. 236 (1923). Our courts will intervene to strike down unreasonable or discriminatory public utility service rates prescribed by the Legislature, a municipality, or municipal commission; however, courts will not themselves fix prospective rates. See Cooper v. Tampa Electric Co., supra, and Tampa Electric Co. v. Cooper,153 Fla. 81 ,14 So.2d 388 (1943).
Mohme v. City of Cocoa,
With respect to the setting of utility rates by municipalities, 12 McQuillin, *526 Municipal Corporations (3rd Ed.1970), § 35.37b states:
"`A municipality has the right to classify consumers under reasonable classifications based upon such factors as the cost of service, the purpose for which the service or the product is received, the quantity or the amount received, the different character of the service furnished, the time of its use or any other matter which presents a substantial difference as a ground of distinction. Accordingly, a lack of uniformity in the rate charged is not necessarily unlawful discrimination. The establishment of classifications and the charging of different rates for the several classes is not unreasonable and does not violate the requirements of equality and uniformity. Discrimination to be unlawful must draw an unfair line or strike an unfair balance between those in like circumstances having equal rights and privileges. Discrimination with respect to rates charged does not vitiate unless it is arbitrary and without a reasonable fact basis or justification.'"
Pinellas Apartment Ass'n, Inc. v. City of St. Petersburg,
V.
The boundary between special assessments and user fees is not always clear. See, e.g., Harris v. Wilson,
In determining whether a charge for connecting property with the municipal water service is a "fee" or an "assessment," the name given to the charge is not controlling; it is the reason for the charge which controls its nature, and if it is a charge made for the improvement of a certain piece of property, it is an assessment. Similarly, charges for connection to or the use of a sewer generally are not deemed taxes.
There is no bright-line test for distinguishing between a connection/use fee and a special assessment; generally, a "fee" is exchanged for a service rendered or a benefit conferred, and some reasonable relationship exists between the amount of the fee and the value of the service or benefit, while a "special assessment" is a specific levy designed to recover the costs of improvements that confer local and peculiar benefits upon property within a defined area. "User fees" are those which are charged only to the person actually using the service, and the amount of the charge generally is related to the actual goods or services provided and is a monthly charge rather than a one-time charge.
Laura H. Dietz, Am.Jur.2d, Special or Local Assessments § 2, at 631-32 (2000) (footnotes omitted). Our supreme court has recently indicated, moreover, (albeit in obiter dicta ) in Pinellas County v. State,
The lack of a bright line notwithstanding, we hold that the ordinance at issue here, if it operates as the City has alleged, imposes utility service fees rather than special assessments. "Stormwater runoff is rain ... that does not evaporate or penetrate the ground and is collected by storm drains that transport it to receiving waters." Smith Chapel Baptist Church,
VI.
DOT suggests that, even if Gainesville's ordinance does create a bona fide utility and authorize valid utility fees, sovereign immunity shields it from liability for the City's fees.[3] Such a claim is reminiscent of the claim made on behalf of the Department of Health and Rehabilitative Services (HRS) in Hillsborough Ass'n for Retarded Citizens v. City of Temple Terrace,
*528 Rather than analyzing the governmental interests at stake here, DOT starts with the problematic premise that any obligation it has to pay the City stormwater utility fees is purely contractual in nature. See Williams v. City of Mount Dora,
Courts in other jurisdictions have not hesitated to hold that a municipality's authority to set stormwater utility fees includes authority to charge a state agency or board such fees.[6] The Colorado State Board for Community Colleges and Occupational Education (Board) argued in City of Littleton v. State,
Construing a stormwater management statute similar to Florida's in State v. City of Charleston,
Authority is granted to local governments to establish a stormwater utility. The stormwater utility may fund such activities as watershed master planning, facility retrofitting, and facility maintenance. This funding shall occur through the establishment of a fee system or tax assessment that must be reasonable and equitable. Criteria for the implementation of the stormwater utility must be established in regulations promulgated under this chapter. The implementation of a stormwater utility will necessitate the adoption of a local utility ordinance prior to its implementation.
S.C.Code Ann. § 48-14-120(C) (Supp. 1998). The South Carolina Supreme *530 Court held that "the plain, ordinary, and unambiguous language of the Act permits the assessment of this fee upon State property.... State owned or managed property is subject to the fee." City of Charleston,
In memoranda of law supporting its motions to dismiss, DOT twice concedes: "Local governments may impose user fees on state property." Responding to DOT's request for advice (a request in which the City later joined), the attorney general opined:
To summarize: City of Gainesville Stormwater Management Utility fees are imposed on property that contributes runoff to the city's stormwater management system and requires use of that system; varying charges for this service are based on the percentage of water generated from the property and not retained on site; property owners may choose to use the system or to contain such runoff on their own property and, if no service is provided to a property, the property is not charged; stormwater utility fees are collected, along with other Gainesville utility fees, by inclusion on a monthly utility bill; delinquent stormwater utility bills, like other city utility bills, are handled by collection procedures and no lien is placed on property for nonpayment of these fees; finally, City of Gainesville Stormwater Utility fees are collected and deposited into a trust fund for uses related to the city's stormwater management utility, and expenditures that are not related to such activities are prohibited.
While a stormwater management utility fee may be imposed as either a special assessment or as a service fee, based on its characteristics it is my opinion that the fee imposed by the City of Gainesville for utilization of the stormwater management utility is a service fee or user fee, which the city may lawfully impose on property of the State of Florida, Department of Transportation.
Op. Att'y Gen.Fla. 97-70 (1997) (footnote omitted). On this record, which does not reveal whether there is a written agreement between DOT and the City, DOT has demonstrated no legal reason for failing to pay the City's charges if, as the City has alleged, the City's ordinance imposes user fees. Accordingly, we reverse as to count one.
VII.
Absent a written agreement, however, a vendor cannot sue the state for money damages on a contract theory. See County of Brevard v. Miorelli Eng'g,
Our supreme court has held that facts on which a waiver of sovereign immunity depends must be pleaded in the complaint. Levine v. Dade County Sch. Bd.,
We have specifically rejected the contention "that sovereign immunity[7] is not an appropriate consideration on the motion to dismiss because it is an affirmative defense." Charity,
Affirmed in part, reversed in part, and remanded.
ALLEN and PADOVANO, JJ., concur.
NOTES
Notes
[1] Section 403.0893, Florida Statutes (2000), provides as follows:
In addition to any other funding mechanism legally available to local government to construct, operate, or maintain stormwater systems, a county or municipality may:
. . . .
(3) Create, alone or in cooperation with counties, municipalities, and special districts pursuant to the Interlocal Cooperation Act, s. 163.01, one or more stormwater management system benefit areas. All property owners within said area may be assessed a per acreage fee to fund the planning, construction, operation, maintenance, and administration of a public stormwater management system for the benefited area. Any benefit area containing different land uses which receive substantially different levels of stormwater benefits shall include stormwater management system benefit subareas which shall be assessed different per acreage fees from subarea to subarea based upon a reasonable relationship to benefits received. The fees shall be calculated to generate sufficient funds to plan, construct, operate, and maintain stormwater management systems called for in the local program required pursuant to s. 403.0891(3). For fees assessed pursuant to this section, counties or municipalities may use the non-ad valorem levy, collection, and enforcement method as provided for in chapter 197.
[2] But the amended complaint in the present case fairly alleges, in effect, that DOT can avoid the payment of all stormwater utility fees by retaining stormwater runoff on its property.
[3] DOT takes this position in responding to the brief filed by amicus curiae Florida Association of Stormwater Utilities. As a technical matter, we deem the argument waived on account of the position DOT took with respect to user fees in the trial court, originally in the memorandum in support of its motion to dismiss the original complaint. In another memorandum, filed in support of its motion to dismiss the amended complaint, DOT again wrote: "Local governments may impose user fees on state property." As to sovereign immunity as a bar to suit for money damages, see part VII.
[4] Our supreme court approved the Second District's decision.
The rationale which runs through our cases and which we are convinced should furnish the true test of immunity in the first instance, albeit a somewhat nebulous one, is the legislative intent in this regard with respect to the particular agency or function involved. That intent, rarely specifically expressed, is to be divined from a consideration of many factors, with a value judgment reached on an overall evaluation. All possible factors cannot be abstractly catalogued. The most obvious and common ones include the nature and scope of the instrumentality seeking immunity, the kind of function or land use involved, the extent of the public interest to be served thereby, the effect local land use regulation would have upon the enterprise concerned and the impact upon legitimate local interests.
City of Temple Terrace,
At issue here are the charges billed on account of a parcel of property DOT uses for as yet unspecified purposes. Nothing in the amended complaint suggests, however, that DOT requires free utility services in order to be able to accomplish its mission or to perform the functions, whatever they may be, that it performs on the property at 2006 N.E. Waldo Road. The local interest in managing stormwater runoff is like the local interest in collecting and recycling or otherwise disposing of solid waste. See United Sanitation Servs. v. City of Tampa,
[5] For purposes of paying its utility bills, DOT is a "person" within the meaning of section 180.13(2), Florida Statutes (2000), which provides:
The city council, or other legislative body of the municipality, by whatever name known, may establish just and equitable rates or charges to be paid to the municipality for the use of the utility by each person, firm or corporation whose premises are served thereby; and provided further, that if the charges so fixed are not paid when due, such sums may be recovered by the said municipality by suit in a court having jurisdiction of said cause or by discontinuance of service of such utility until delinquent charges for services thereof are paid,....
Any other construction of the statute would put municipalities at risk for having to furnish state and federal agencies not just stormwater utility services but all municipal utility services without payment.
This construction of the statute finds support in the opinion in South Fla. Water Management Dist. v. Layton,
Appellant contends that section 704.01 does not apply to it because it is not a "person" within the intendment of the statute and sovereign immunity has consequently not been waived. Chapter 704 does not define the word "person." Consequently, appellant urges, chapter 1, which contains definitions for construction of all statutes where context permits, is therefore applicable. "Person" is defined in section 1.01(3) to include "individuals, children, firms, associations, joint adventures, partnerships, estates, trusts, business trusts, syndicates, fiduciaries, corporations, and all other groups or combinations." A separate definition exists for "public body," "body politic," or "political subdivision," which are defined as including: "counties, cities, towns, villages, special tax school districts, special roads and bridge districts, bridge districts and all other districts in this state." Thus, for purposes of chapter 704, appellant concludes, a special district is not a "person." We disagree. Under the express provisions of section 1.01, the definitions contained therein apply only where the context permits. Had section 704.01 made a distinction between "persons" and "public bodies," "bodies politic," or "political subdivisions," we would agree with appellant. However, section 704.01 makes no such distinction, and we see no basis for necessarily assuming the legislature intended one here. For the reasons set forth below, we conclude that the legislature intended to include the state and its agencies within the meaning of "persons" as used in section 704.01.
Here, too, context requires reading "person" to include state agencies. For the same reasons the balancing of interests test takes into account, section 180.13(2), Florida Statutes (2000), should not be construed to exempt state agencies from having to pay for municipal utility services.
[6] The court stated in City of Littleton v. State,
The statutory scheme upon which the City relies in this case authorizes municipalities to collect fees "from any consumer or any owner or occupant of any real property" receiving services "furnished by, or the direct or indirect connection with, or the use of ... water facilities or sewerage facilities or both ...." § 31-35-402(1)(f), 12B C.R.S. (1986). The statute defines a "consumer" as "any public or private user of water facilities or sewerage facilities or both." § 31-35-401(1), 12B C.R.S. (1986). The inclusion of "public" as well as "private" users in the statutory definition of "consumer" expressly evidences a legislative intent to subject state institutions such as the State Community Colleges Board to the provisions of the statute. This specific language, coupled with the broad purposes of the statute to encourage the development of adequate municipal water and drainage systems, brings this case within the rationale of our decision in Colorado Civil Rights Commission [v. Regents of the University of Colorado,
[7] Sovereign immunity can also be raised as an affirmative defense. See Pan-Am Tobacco Corp.,