NORTHEAST OHIO REGIONAL SEWER DISTRICT, APPELLANT, v. BATH TOWNSHIP ET AL.; THE CITY OF BEACHWOOD ET AL., APPELLEES.
No. 2013-1770
Supreme Court of Ohio
Submitted September 9, 2014—Decided September 15, 2015.
144 Ohio St.3d 387, 2015-Ohio-3705
PFEIFER, J.
Denise E. Ferguson, for appellee.
PFEIFER, J.
{1} Appellant, the Northeast Ohio Regional Sewer District (the “Sewer District“), seeks to implement a regional stormwater-management program. Appellees, political subdivisions and landowners within the Sewer District, argue and the court of appeals concluded that the Sewer District is not authorized to establish a stormwater-management program. We disagree and reverse the judgment of the court of appeals.
BACKGROUND
{2} The Sewer District, a political subdivision of the state of Ohio, was formed in 1972 and includes as member communities all or parts of over 60 cities, villages, and townships in and around Cuyahoga County. In January 2010, the Sewer District adopted a plan to establish a regional stormwater-management program and a structure for fees to be charged to landowners within the Sewer District whose properties contain impervious surfaces. The Sewer District then filed an action in common pleas court against its member communities seeking a declaratory judgment that it had the authority to implement the regional stormwater-management program and to impose the fees. Some of those
{3} In April 2011, the trial court declared upon a motion for partial summary judgment that the Sewer District had authority under
the purpose of a regional water and sewer district is for “either or both” of the following purposes: “(A) [t]o supply water to users within or without the district“; and “(B) [t]o provide for the collection, treatment, and disposal of waste water within and without the district.”
(Brackets sic.) Id. at ¶ 43, quoting
{4} The court of appeals concluded that although the statutory scheme “authorize[s] the Sewer District to collect, treat, and dispose of waste water entering the sewer system,” it “does not authorize the District to implement a ‘stormwater management’ program.” Id. at ¶ 43 and 46. This conclusion depends in large part upon the court‘s pronouncement that “[t]he term waste water necessarily means water containing waste.” Id. at ¶ 44, citing Reith v. McGill Smith Punshon, Inc., 163 Ohio App.3d 709, 2005-Ohio-4852, 840 N.E.2d 226 (1st Dist.).
{5} The trial court also concluded after a bench trial that the Sewer District is authorized by
{6} We granted the Sewer District‘s discretionary appeal as to Proposition of Law No. I (asserting that the program and fees are authorized under
ANALYSIS
{7} Despite the great interests at stake, the issues in this case are exceedingly straightforward: (1) is the Sewer District‘s regional stormwater-management program authorized by statute and by its charter? and (2) is the attendant fee structure authorized by statute and by the charter? We answer both questions in the affirmative.
{8} There are many sound policy reasons to support or oppose the creation of the Sewer District‘s regional stormwater-management program and its attendant fee structure. The various party and amicus briefs are testaments to this. Although we appreciate their substantive significance, they are not germane to the legal issues before us.
{9} The parties do not dispute that the Sewer District is a valid creature of statute, authorized by
{10}
{11} Appellees argue, and the court of appeals concluded, that “[t]he term waste water necessarily means water containing waste.” 2013-Ohio-4186, ¶ 44. Appellees contend that the participial phrase “containing sewage or industrial waste or other pollutants or contaminants derived from the prior use of the water” modifies the noun “any storm water” as well as the noun “any water,” which would mean that stormwater is only “waste water” when it is combined with sewage or pollutants.
{12} The definition provided in the statute is uncomplicated. See Youngstown Club v. Porterfield, 21 Ohio St.2d 83, 86, 255 N.E.2d 262 (1970) (“it is customary to give words their plain ordinary meaning unless the legislative body has clearly expressed a contrary intention“). In our view, the statute plainly indicates that “waste water” comes in two forms. One is “any storm water.” The other is “any water containing sewage or industrial waste or other pollutants or contaminants derived from the prior use of the water.” There is no other plausible reading of the definition.
{13} The definition sought by appellees renders the words “any storm water and” meaningless. But the words “any storm water and” are in the statute, and it is well known that our duty is to “give effect to the words used, not to delete words used or to insert words not used.” Columbus-Suburban Coach Lines, Inc. v. Pub. Util. Comm., 20 Ohio St.2d 125, 127, 254 N.E.2d 8 (1969); see also State ex rel. Carmean v. Hardin Cty. Bd. of Edn., 170 Ohio St. 415, 422, 165 N.E.2d 918 (1960) (“It is axiomatic in statutory construction that words are not inserted into an act without some purpose“).
{14} We conclude that the term “any storm water” was not included in the statute to be mere surplusage. The Sewer District has the authority to collect, treat, and dispose of “waste water.” We hold that
{15} The charter creating the Sewer District states, “The purpose of the District shall be the establishment of a total waste water control system for the collection, treatment and disposal of waste water within and without the District * * *” In re Establishment of Cleveland Regional Sewer Dist., Cuyahoga C.P. No. SD 69411 (June 15, 1972), Exhibit A, ¶ 4. This authority includes “overall control of all waste water collection systems in the area.” Id. Given the statutory definition of “waste water,” as discussed above, it is clear that the charter governing the Sewer District authorizes it to implement a regional stormwater-management program. Moreover, the charter also states, “The District will plan, finance, construct, operate and control waste water treatment and disposal facilities, major interceptor sewers, all sewer regulator systems and devices, weirs, retaining basins, storm water handling facilities, and all other water pollution control facilities of the District.” Id. at ¶ 5(c). This charter provision specifically authorizes the Sewer District to build and operate stormwater-handling facilities.
II. The Sewer District is authorized by statute and by its charter to assess fees to implement the regional stormwater-management program
{16} Having determined that the Sewer District is authorized to implement a regional stormwater-management program, we must now determine whether the district has the authority to charge fees to pay for that program.
any waste water facility or water management facility acquired, constructed, or operated by or leased to a regional water and sewer district or to be acquired, constructed, or operated by or leased to a regional water and sewer district under this chapter * * *
{17} “Waste water facilities” means
facilities for the purpose of treating, neutralizing, disposing of, stabilizing, cooling, segregating, or holding waste water, including, without limiting the generality of the foregoing, * * * facilities for the temporary or permanent impoundment of waste water, both surface and underground, and storm and sanitary sewers and other systems, whether on the surface or underground, designed to transport waste water * * *.
{18} “Water management facilities” means
facilities for the purpose of the development, use, and protection of water resources, including, without limiting the generality of the foregoing, facilities for water supply, facilities for stream flow improvement, dams, reservoirs, and other impoundments, * * * stream monitoring systems, facilities for the stabilization of stream and river banks, and facilities for the treatment of streams and rivers * * *.
{19} Appellees argue that the Sewer District cannot charge the fees permitted for a water-resource project because the Sewer District does not own or operate the various parts of the current stormwater-management system. See
{20} It is impossible to say at this time that the Sewer District will not use the fees to acquire, construct, or operate a facility that will be part of the regional stormwater-management system that it is authorized to implement. It might not, and if it does not, appellees will be within their rights to challenge the Sewer District‘s collection of fees that did not go toward the use for which they were statutorily authorized. But today is not that day.
{21} As stated above, the Sewer District‘s charter instructs it to, among other things, “finance * * * waste water treatment and disposal facilities [and] storm water handling facilities * * *” In re Establishment of Cleveland Regional Sewer Dist., Cuyahoga C.P. No. SD 69411, Exhibit A, ¶ 5(c)(1). The charter provides that “[a]ny projects not financed through the Ohio Water Development Authority would be financed in such a manner as may be deemed appropriate by the Board of Trustees.” Id. at ¶ 5(e)(3). We conclude that this broad language
{22} Because we conclude that the Sewer District has authority to implement a regional stormwater-management program and to charge fees for that program, we reverse the judgment of the court of appeals.
Judgment reversed.
O‘CONNOR, C.J., and LANZINGER and O‘NEILL, JJ., concur.
FRENCH, J., concurs in part and dissents in part.
O‘DONNELL and KENNEDY, JJ., dissent.
FRENCH, J., concurring in part and dissenting in part.
{23} I agree with the majority that appellant, the Northeast Ohio Regional Sewer District (the “Sewer District“), has authority under both
{24} Both the majority opinion and Justice Kennedy‘s dissent recognize that the Sewer District‘s statutory authority over stormwater hinges, in part, upon the meaning of the term “waste water” in
{25} Other provisions in
{26} I likewise agree with the majority that the Sewer District‘s charter authorizes it to implement a regional stormwater-management program. The charter tracks the language of
{27} Water pollution, stemming from “[t]he increase in the amount of wastewater in the Metropolitan Cleveland area resulting from the increase in population and the expansion of industry in the many political subdivisions outside of the City of Cleveland,” was a driving force behind the creation of the Sewer District. Id. at ¶ 3. The charter authorizes the Sewer District to “plan, finance, construct, operate and control wastewater treatment and disposal facilities, major interceptor sewers, all sewer regulator systems and devices, weirs, retaining basins, storm water handling facilities, and all other water pollution control facilities of the District.” Id. at ¶ 5(c)(1). But the charter also expressly authorizes the Sewer District to undertake stormwater-control measures. Paragraph 5(m), which governs the Sewer District‘s authority with respect to “Local Sewerage Collection Facilities and Systems,” states that “[t]he District shall have authority pursuant to Chapter 6119 of the Ohio Revised Code to plan, finance, construct, maintain, operate, and regulate local sewerage collection facilities and systems within the District, including both storm and sanitary sewer systems.” (Emphasis added.) And paragraph 5(m)(3) specifically directs the Sewer District to “develop a detailed integrated capital improvement plan for regional management of wastewater collection and storm drainage designed to identify a capital improvement program for the solution of all intercommunity drainage problems (both storm and sanitary) in the District.”
{29} Title V distinguishes between local stormwater systems and the regional stormwater system. “Regional Stormwater System” means “[t]he entire system of watercourses, stormwater conveyance structures, and Stormwater Control Measures in the District‘s service area that are owned and/or operated by the District or over which the District has right of use for the management of stormwater, including both naturally occurring and constructed facilities.” Northeast Ohio Regional Sewer Dist. Code of Regs., Section 5.0218. “Local Stormwater System,” on the other hand, includes watercourses, stormwater-conveyance structures or stormwater-control measures “owned and/or operated by a private entity or a unit of local government other than the District” and “not designated as part of the Regional Stormwater System.” Id., Section 5.0212. So, the regional stormwater system does not include watercourses, conveyance structures or stormwater-control measures owned or operated by the local communities absent agreement between the local communities and the Sewer District. By limiting the reach of the regional stormwater system, Title V does not conflict with the Sewer District‘s charter, and I agree with the majority that the charter authorizes the Sewer District to build and operate a regional stormwater-management system.
{30} Despite my agreement with the majority‘s determination that the Sewer District has authority to manage uncontaminated stormwater, I disagree with the majority‘s conclusion that
{31} In her dissent, Justice Kennedy adopts appellees’ second argument—that the charges amount to an unlawful tax. But I agree with the Sewer District‘s assertion that that issue is not properly before us. The Sewer District asked this court to adopt a proposition of law stating that stormwater-management charges based upon the amount of impervious surface a parcel contains—like the stormwater fees here—do not constitute an illegal tax. This court,
{32} In my view, it is appellees’ other argument—regarding statutory authority—that is persuasive. The majority reasons that because a “water resource project” includes a facility to be acquired, constructed or operated, the Sewer District may charge fees for that purpose under
{33}
“charge, alter, and collect rentals or other charges * * * for the use or services of any water resource project or any benefit conferred thereby and contract * * * with one or more persons, one or more political subdivisions, or any combination thereof, desiring the use or services thereof, and fix the terms, conditions, rentals, or other charges * * * for such use or services.”
(Emphasis added.) See also
{34} Although
{35} The Eighth District concluded that the Sewer District “improperly employed
{37} Nothing in
{38} Even so, the Sewer District is not without recourse. A regional water and sewer district may levy and collect taxes and special assessments and may issue revenue bonds.
{39} Because I conclude that
KENNEDY, J., dissenting.
R.C. Chapter 6119
{41}
{42} The Sewer District is authorized “[t]o provide for the collection, treatment, and disposal of waste water within and without the district” pursuant to
{43} The majority holds that
The SMC
{44} The SMC proposes a comprehensive, broad-ranging plan to manage stormwater that is beyond the Sewer District‘s authority under
[t]he entire system of watercourses, stormwater conveyance structures, and Stormwater Control Measures in the District‘s service area that are owned and/or operated by the District or over which the District has right of use for the management of stormwater, including both naturally occurring and constructed facilities. The Regional Stormwater System shall generally include those watercourses, stormwater conveyance structures, and Stormwater Control Measures receiving drainage from three hundred (300) acres of land or more.
{45} The SMC further states that it “is applicable to activities and persons on all parcels within the Sewer District‘s service area.” The District will charge every parcel of land within the District a stormwater fee to fund the aforementioned stormwater-control measures.
{46} Nowhere in
Stormwater “Fees”
{47} Initially, I will address the concurring and dissenting opinion‘s assertion that the issue of whether a stormwater fee is a lawful tax is not properly before the court.
{48} Even though the reasons are not typically memorialized, this court may reject one or more propositions of law or an entire discretionary appeal for any number of reasons. See Williamson v. Rubich, 171 Ohio St. 253, 253-254, 168 N.E.2d 876 (1960), citing
{49} The Sewer District raised three propositions of law in its discretionary appeal to this court. We accepted the Sewer District‘s first two propositions for review on their merits, 138 Ohio St.3d 1413, 2014-Ohio-566, 3 N.E.3d 1216, but declined to review the third proposition, which stated, “Stormwater management programs, paid for through charges for stormwater management services, do not violate the Ohio or United States Constitutions. Further, such charges, when based upon the amount of impervious surface on a property, do not constitute an illegal tax.”
{50} One of the two propositions that we accepted stated, “A district formed pursuant to
{51} In response to that proposition, appellee city of Beachwood argued in its merit brief in part that “[t]he Stormwater Fee is actually an unauthorized tax that the Sewer District is using to avoid other required
{52} Obviously, this court may reject any argument presented by a party, but this court‘s refusal to review a proposition of law should not bar an opposing party from later using the same or a similar issue raised in that proposition in a legitimate, responsive argument to an opposing party‘s proposition of law that is being considered by the court, nor should it prevent this court from relying upon
{53} A sewer district may “charge, alter, and collect rentals or other charges, including penalties for late payment, for the use or services of any water resource project or any benefit conferred thereby.”
{54} In this case, the Sewer District, through the SMC, seeks to impose a “stormwater fee” on parcels of land in the District to pay for the management of stormwater. The fee, which is “based upon a calculation of the amount of Impervious Surface on a parcel[,] shall be imposed on every parcel within the District‘s service area.”
{55} In my view, this fee is actually a tax, which does not appear to have been lawfully imposed. See {56} “It is not possible to come up with a single test that will correctly distinguish a tax from a fee in all situations * * *” State ex rel. Petroleum Underground Storage Tank Release Comp. Bd. v. Withrow, 62 Ohio St.3d 111, 117, 579 N.E.2d 705 (1991). Therefore, “[d]etermining whether an assessment is a fee or a tax must be done on a case-by-case basis dependent upon the facts and circumstances surrounding each assessment.” Id. at 115. {57} Some factors that may indicate that an assessment is a fee include the following: (1) the assessment is “imposed in furtherance of regulatory measures,” (2) the assessment is not placed in the general fund, but is used only to fund the regulatory purpose, (3) the assessment is “imposed by a government in return for a service it provides,” and (4) the assessment is discontinued when the unobligated balance in the fund reaches a certain level. Drees Co. v. Hamilton Twp., 132 Ohio St.3d 186, 2012-Ohio-2370, 970 N.E.2d 916, ¶ 16-20, citing and quoting Withrow at 111, 113, 116–117. {58} In Natl. Cable Television Assn., Inc. v. United States, 415 U.S. 336, 340-341, 94 S.Ct. 1146, 39 L.Ed.2d 370 (1974), the court commented: Taxation is a legislative function [where the legislature] may act arbitrarily and disregard benefits bestowed by the Government on a taxpayer and go solely on ability to pay, based on property or income. A fee, however, is incident to a voluntary act, e.g., a request that a public agency permit an applicant to practice law or medicine or construct a house or run a broadcast station. The public agency performing those services normally may exact a fee for a grant which, presumably, bestows a benefit on the applicant, not shared by other members of society. (Emphasis added.) {59} An example of a fee charged for a service is found in Wyatt v. Trimble Twp. Waste Water Treatment Dist., 4th Dist. Athens No. 1521, 1992 WL 329386 (Nov. 3, 1992). In Wyatt, the Trimble Township Waste Water Treatment District charged a homeowner for the installation of a plug at the point where each premises was to be connected to an existing sanitary sewer system for the purpose of waste-water treatment. The court found that the fee was in return for a benefit conferred, i.e., treatment of the homeowner‘s waste water. Id. at *3. {60} In Bolt v. Lansing, 459 Mich. 152, 587 N.W.2d 264 (1998), the Supreme Court of Michigan addressed whether a stormwater service charge imposed by the city of Lansing on its residents for the purpose of stormwater control was a fee or a tax. {61} In Bolt, Lansing decided to separate its combined sanitary and storm sewers. To finance this project, Lansing decided to impose a stormwater service charge. Similar to the instant case, the fee was based on the amount of impervious surface that a parcel contained. The court stated: A proper fee must reflect the bestowal of a corresponding benefit on the person paying the charge, which benefit is not generally shared by other members of society. Natl. Cable Television Ass‘n v. United States & Federal Communications Comm., 415 U.S. 336, 340-342, 94 S.Ct. 1146, 39 L.Ed.2d 370 (1974). Where the charge for either storm or sanitary sewers reflects the actual costs of use, metered with relative precision in accordance with available technology, including some capital investment component, sewerage may properly be viewed as a utility service for which usage-based charges are permissible, and not as a disguised tax. Id. at 164-165. {62} But the court held that “the lack of correspondence between the [stormwater service] charges and the benefit conferred demonstrates that the This conclusion is buttressed by the fact that the acknowledged goal of the ordinance is to address environmental concerns regarding water quality. Improved water quality in the Grand and Red Cedar Rivers and the avoidance of federal penalties for discharge violations are goals that benefit everyone in the city, not only property owners. {63} Pursuant to my interpretation of “waste water” above, I do not believe that the Sewer District has authority to manage stormwater; consequently, the assessment fails to support a regulatory purpose, which is a factor that can support a finding that it is indeed a fee and not a tax. See Drees Co., 132 Ohio St.3d 186, ¶ 16-20. However, even assuming that the Sewer District has statutory authority to manage stormwater as proposed in the SMC, the purported fee fails to meet other indicia of a true fee. {64} In the instant case, the Sewer District found that the SMC is necessary (1) to prevent flooding to public and private property, (2) to prevent “[s]treambank erosion[, which] is a significant threat to public and private property, water quality, wildlife, and aquatic and terrestrial habitats,” and (3) to prevent “damage[ to] the water resources of Northeast Ohio, [which] impair[s] the ability of these waters to sustain ecological and aquatic systems.” {65} Despite the district‘s claims that the SMC will benefit private property, I would hold that alleviating these problems results in a benefit that is conferred on the general public rather than on individual property owners. See Natl. Cable Television Assn., Inc., 415 U.S. at 340-342; Bolt, 459 Mich. at 164-165. {66} Further, as evidenced by this lawsuit, at minimum there are numerous municipalities (e.g., Beachwood, Bedford Heights, Brecksville, Independence, Lyndhurst, and Strongsville) and other entities (e.g., Highlands Business Park, L.L.C., Lakepoint Office Park, L.L.C., Park East Office Park, L.L.C., and the Ohio Counsel of Retail Merchants) that oppose the SMC. Voluntary acceptance of a service is another indicator that an assessment is a fee and not a tax. Natl. Cable Television Assn. at 340. {67} For all the aforementioned reasons, I would hold that the Sewer District‘s stormwater fee is not a fee, but an unlawful tax. {68} Because I would hold that O‘DONNELL, J., concurs in the foregoing opinion. Thacker Martinsek, L.P.A., and Mark I. Wallach; Calfee, Halter & Griswold, L.L.P., James F. Lang, Matthew J. Kucharson, and Molly A. Drake; and Marlene Sundheimer, Northeast Ohio Regional Sewer District Director of Law, for appellant. Berns, Ockner & Greenberger, L.L.C., Sheldon Berns, Paul Greenberger, Benjamin J. Ockner, Jordan Berns, Timothy J. Duff, and Gary F. Werner, for appellees Ohio Council of Retail Merchants, Greater Cleveland Association of Building Owners and Managers, Cleveland Automobile Dealers Association, CADA Properties, L.L.C., Northern Ohio Chapter of NAIOP, Association for Commercial Real Estate, Northeast Ohio Apartment Association, Snowville Service Associates, L.L.C., Boardwalk Partners, L.L.C., Creekview Commons, L.L.C., Fargo Warehouse, L.L.C., Highlands Business Park, L.L.C., JES Development, Ltd., Lakepoint Office Park, L.L.C., Landerbrook Point, L.L.C., Newport Square, Ltd., Park East Office Park, L.L.C., Pavilion Properties, L.L.C., and WGG Development, Ltd. Taft, Stettinius & Hollister, L.L.P., John B. Nalbandian, W. Stuart Dornette, Stephen M. O‘Bryan, Gregory J. O‘Brien, and Michael J. Zbiegien Jr., for appellees city of Beachwood, city of Bedford Heights, village of Glenwillow, city of Independence, city of Lyndhurst, village of Oakwood, city of Olmsted Falls, and city of Strongsville. Matty, Henrikson & Greve, L.L.C., David J. Matty, Shana A. Samson, and Justin Whelan, for appellee city of Brecksville. Barbara A. Langhenry, Director of Law, Harold A. Madorsky, and Kate E. Ryan, urging reversal for amicus curiae city of Cleveland. McMahon DeGulis, L.L.P., Andrea M. Salimbene, Gregory J. DeGulis, and Erica M. Spitzig, urging reversal for amici curiae National Association of Clean Water Agencies and Association of Ohio Metropolitan Wastewater Agencies. Jones Day, Yvette McGee Brown, and Chad Readler, urging reversal for amici curiae village of Cuyahoga Heights, village of Moreland Hills, and orange Village. Scott Claussen, urging reversal for amicus curiae city of Brooklyn. Jerome Dowling, urging reversal for amicus curiae village of Brooklyn Heights. Thomas P. O‘Donnell, urging reversal for amicus curiae village of Highland Hills. Peter H. Hull, urging reversal for amicus curiae city of Middleburg Heights. Dale F. Pelsozy, urging reversal for amicus curiae Olmsted Township. Michael Pokorny, urging reversal for amicus curiae city of Parma Heights. Joseph W. Diemert Jr. & Associates Co., L.P.A., and Joseph W. Diemert Jr., urging reversal for amicus curiae Mayfield Village. Waldheger Coyne Co., L.P.A., and Luke McConville, urging reversal for amicus curiae village of Newburgh Heights. Timothy G. Dobeck, urging reversal for amicus curiae city of Parma. Richard A. Pignatiello, urging reversal for amicus curiae city of Seven Hills. William M. Ondrey Gruber, urging reversal for amicus curiae city of Shaker Heights. David Lambros, urging reversal for amicus curiae village of Valley View. Michael P. Lograsso, urging reversal for amicus curiae city of South Euclid. Calfee, Halter & Griswold, L.L.P., and Teresa Metcalf Beasley, urging reversal for amicus curiae city of Warrensville Heights. Rosalina M. Fini; and Thompson Hine, L.L.P., Michael L. Hardy, Karen E. Rubin, and Devin A. Barry, urging reversal for amicus curiae Cleveland Metropolitan Park District. Albers & Albers, Eric Luckage, and John Albers, urging reversal for amici curiae Coalition of Ohio Regional Districts, Deerfield Regional Storm Water District, and ABC Water and Storm Water District. Michael DeWine, Attorney General, Eric E. Murphy, State Solicitor, Michael J. Hendershot, Chief Deputy Solicitor, Jeffrey Jarosch, Deputy Solicitor, and Aaron S. Farmer, Assistant Attorney General, urging reversal for amicus curiae state of Ohio. Penny L. Sisson, pro se, urging affirmance for amicus curiae Penny L. Sisson. Eugene P. Holmes, pro se, urging affirmance for amicus curiae Eugene P. Holmes. Michael J. Jogan, pro se, urging affirmance for amicus curiae Michael J. Jogan. Maurice A. Thompson, urging affirmance for amici curiae 1851 Center for Constitutional Law and Ohio Real Estate Investors Association.