Loading...
HomeMy WebLinkAbout95-4323 EquitySILVER SPRING TOWNSHIP AUTHORITY, Plaintiff WALTER J. LEARY and GWEN A. LEARY, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - EQUITY NO. 95-4323 EQUITY TERM IN RE: ADJUDICATION BEFORE OLER, J. DECREE NISI AND NOW, this ~day of October, 1996, upon consideration of Plaintiff's complaint, following a nonjury trial limited to the issue of the liability of Defendants for certain sanitary sewer tapping fees, and for the reasons stated in the accompanying opinion, the court finds in favor of Plaintiff and against Defendants, jQintly and severally, in the amount of $17,552.00, plus costs of suit and interest sec. leg. from the date of connection. THIS DECREE NISI shall automatically become a Final Decree unless a motion for post-trial relief is filed by either party in accordance with Pennsylvania Rule of Civil Procedure 227.1 within 10 days of the entry of this order. Richard C. Snelbaker, Esq. 44 West Main Street Mechanicsburg, PA 17055 Attorney for Plaintiff BY THE COURT, Stephen P. Elwood, Esq. The Necho Allen No. 1 Mahantongo Street Pottsville, PA 17901 Attorney for Defendants : rc SILVER SPRING TOWNSHIP AUTHORITY, Plaintiff Ve WALTER J. LEARY and GWEN A. LEARY, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - EQUITY NO. 95-4323 EQUITY TERM Oler, J. IN RE: ADJUDICATION BEFORE OLER, J. OPINION and DECREE NISI FINDINGS OF FACT Plaintiff is the Silver Spring Township Authority (Authority), a municipal authority organized under the laws of the Commonwealth of Pennsylvania.~ Defendants are Walter J. Leary and Gwen A. Leary (the Learys), adult individuals2 who own property having an address of 261 Ridge "Hill Road, Mechanicsburg, Silver Spring Township, Cumberland County, Pennsylvania.3 The Learys' property is located north of the village of New Kingstown4 and comprises about four acres,s On the property are two x Plaintiff's Complaint, paragraph 1; Defendants' Answer, paragraph 1; Notes of Testimony 3, Trial, June 3, 1996 (hereinafter N.T. __) . 2 Plaintiff's Complaint, paragraph 1; Defendants' Answer, paragraph 2; N.T. 3. 3 N.T. 89. 4 Plaintiff's Exhibit'l, Trial, June 3, 1996 (hereinafter Plaintiff's Exhibit __). s N.T. 16. NO. 95-4323 EQUITY TERM buildings, each containing two rental units, or apartments.6 Each apartment has been continuously occupied since the Learys purchased the tract in 1986.7 At the time the Learys acquired the property, and thereafter, it was served by an on-lot sewage disposal system;8 until recently, existing municipal sewer mains were not sufficiently proximate to the buildings on the tract to provide access to public sewer service.9 Over the years, the property's on-lot sewage disposal system suffered several malfunctions.~° In 1988 or 1989, the discovery of high nitrate levels in some wells in this part of Silver Spring Township resulted in a state- imposed moratorium on construction in one of the developments in the area.~ In light of these conditions, the Authority determined that a need existed to introduce public sewers to the area;~2 it 6 N.T. 13, 89. 7 N.T. 84, 87. 8 N.T. 4. 9 N.T. 20. ~0 N.T. 85-86. ~ N.T. 79. ~ Id. NO. 95-4323 EQUITY TERM targeted the area for such service in a 10-year plan prepared pursuant to the Pennsylvania Sewage Facilities Act.TM At about this time, an entity known as Hamilton Properties (Hamilton) controlled a corporation named Waterford Square Associates, Inc. (Waterford Square).TM Waterford Square was the owner of a tract of land northeast of New Kingstown which could not be developed as Hamilton desired without access to public sewers.~ Hamilton organized a consortium of property and business owners, including the Cumberland Valley School District,~6 having a common interest in expanding the municipal sewer system in the township.~7 The consortium approached the Authority~8 with a proposal to privately construct a system of sewer mains subject to eventual (part~al) reimbursement from other area property owners as they became beneficiaries of the system.~9 An agreement formalizing this enterprise was entered into between the Authority and the members of the consortium on November ~3 N.T. 78, 80-82; see Act of January 24, 1966, P.L. (1965) 1535, as amended, 35 P.S. S§750.1 et seq. N.T. 26; Plaintiff's Exhibit 5. N.T. 25-26. N.T. 27. N.T. 26. N.T. 80. See Plaintiff's Exhibit 5. 3 NO. 95-4323 EQUITY TERM 18, 1991.20 The resulting system of privately constructed sewer mains, and a pumping station,2~ became known as the Waterford Square Extension.22 The Waterford Square Extension began at a point on Cumberland Drive more or less northeast of New Kingstown, ran south across both the westbound and eastbound lanes of the Carlisle Pike, and then ran west to an unnamed alley more or less west of New Kingstown.23 At its western point, the Waterford Square Extension connected to a preexisting main leading to a public treatment facility.24 The cost of the project was in excess of $600,000.00.2s The Waterford Square Extension facilitated public sewer service to an area of the township north and south of the Carlisle Pike, from Rich Valley Road and Hempt Road on the east to the western terminus of the Extension on the west.26 This area included, inter alia, the Learys' property27 and the Waterford Plaintiff's Exhibit 5. See Plaintiff's Exhibit 2. N.T. 21. N.T. 22; Plaintiff's Exhibit 5. north and south along Eleanor Drive and Dauphin Drive. Id. N.T. 28. N.T. 21; Plaintiff's Exhibit 1. N.T. 9; Plaintiff's Exhibit 5. 4 The Extension also runs Id. NO. 95-4323 EQUITY TERM Square Property;28 it encompassed properties from which sewage would flow by gravity into the Waterford Square Extension.29 Under the agreement between the Authority and the members of the consortium which financed the Waterford Square Extension, the Authority agreed to cause the members to be reimbursed on a pro rata basis for their contributions to the Extension, up to $600,000.00.30 The reimbursement money was to come from tapping fees charged to owners of property in the area previously mentioned as they joined the public sewer system over the next several years.3~ In accordance with the agreement, the Authority adopted a fee resolution, amending a prior resolution, on November 17, 1993.32 This resolutiqn added a "reimbursement component" to tapping fees for geographical areas such as the area benefitted by the privately-financed Waterford Square Extension.33 Such a component 28 N.T. 25, 56; not include the internal Waterford Square Property. N.T. 61. Plaintiff's Exhibit 5. Id. Plaintiff's Exhibit 10. Id. Plaintiff's Exhibits 1-2. The Extension did constructed within the 5 sewer mains N.T. 57. NO. 95-4323 EQUITY TERM was authorized by the Municipality Authorities Act of 1945, as amended.34 The policy adopted by the Authority provided for a tapping fee for each presumptive equivalent dwelling unit (EDU) connected thereafter to the sewer system.35 In accordance with the aforesaid act, the tapping fee was composed of a component for recoupment of the Authority's (i.e., public) investment,3~ as well as the reimbursement component for privately-funded projects previously mentioned.37 With respect to the component of the tapping fee related to a return of public investment, as much as $5,742.00 could have been charged per EDU under the act.38 However, under the policy adopted, 34 See A~t of December 19, 1990, P.L. 1227, No. 203, §1, amending Act of May 2, 1945, P.L. 382, S306, 53 P.S. §306(S)(t)(1)(iii)(D) (1996 Supp.). No such component was contained in previous tapping fees imposed by the Authority. See, e.g., Plaintiff's Exhibit 9. This was because there had been no previous privately-financed extensions of the system for which reimbursement might have been appropriate. N.T. 46. Plaintiff's Exhibit 9. 36 See Act of December 19, 1990, P.L. 1227, No. 203, §1, amending Act of May 2, 1945, P.L. 382, §306, 53 P.S. ~306(B)(t)(1)(iii)(A), (B) (1996 Supp.); Plaintiff's Exhibits 8-10; N.T. 34-43. 37 See Act of December 19, 1990, P.L. 1227, No. 203, ~1, amending Act of May 2, 1945, P.L. 382, S306, 53 P.S. ~306(B)(t)(1)(iii)(D) (1996 Supp.); Plaintiff's Exhibit 10; N.T. 47. 38 N.T. 42. NO. 95-4323 EQUITY TERM $2,888.00 or less per EDU was charged.39 Specifically, the fee adopted for this component may be outlined as follows: I. Return of Public Investment Component of Tapping Fee A. General Rule: $2888.00 per EDU B. Single Family Detached Dwelling, Actually or Effectively Already in Existence 1. General Rule: $2,100.00 2. Dwelling under Contract As of Aug. 5, 1991: $1,000.00.40 With respect to the component of the tapping fee related to reimbursement of private investment, the policy incorporated by reference the amounts arrived at in particular agreements between the Authority and the private investors.4~ In the present case, the agreement provided for a reimbursement component of $1,500.00 per EDU, calculated in accordance with expected development in the area to be benefitted and an anticipated project cost of $600,000.00; exempted from this charge were preexisting single-family residences.42 Following construction of the Waterford Square Extension, the Authority caused a sewer line to pass through the Learys' property Plaintiff's Exhibit 10. Id. Id. Plaintiff's Exhibit 5. 7 NO. 95-4323 EQUITY TERM and into the Waterford Square Extension. This line permitted sewage from the Learys' apartment units to flow directly through it into the Extension and to be carried to a public treatment facility.43 In accordance with the aforesaid policy of the Authority, a notice was sent on December 9, 1994, to the Learys of a "tapping fee" of $2,888.00 for each of their four units, and an additional "reimbursement component" of $1,500.00 for each of the units.4~ The total amount to be charged for each unit was thus $4,388.00. (This figure, rather than the $2,888.00 amount, would more properly have been called the "tapping fee" in the notice."s) The Learys have challenged the fee on several grounds. With respect to the reimbursement component, they suggest that its treatment by the Authority in the notice they received as a charge in addition to the tapping fee, rather than as an element of the tapping fee, rendered the item an unauthorized, non-tapping fee; they question whether a reimbursement component was statutorily permissible under the circumstances of this case; and they challenge the propriety of drawing a distinction for purposes of ~3 N.T. 9-15; Plaintiff's Exhibit 2. Plaintiff's Exhibit 4. Additional charges referred to in the notice have not been challenged by the Learys and have apparently been paid. N.T. 4. ~ See text accompanying notes 37-43 supra. 8 NO. 95-4323 EQUITY TERM fees between existing single-family dwellings and multi-family buildings.4~ With respect to the component of the tapping fee designed to recoup public investment, they again challenge the propriety of drawing a distinction between existing single-family dwellings and multi-family buildings.47 These matters will be discussed seriatim in the following paragraphs. DISCUSSION Validity of reimbursement component charqe. With regard to Defendants' contention that the treatment of the reimbursement component as a charge in addition to the tapping fee in the billing notice sent by the Authority rendered the item an unauthorized, non-tapping f~e, the court is of the view that such a conclusion would elevate form over substance. The notice involved, at most, a semantic mischaracterization of the Authority's tapping fee as it had been adopted by resolution. Cf. Curson v. West Conshohocken Municipal Authority, 148 Pa. Commw. 386, 611 A.2d 775 (1992). Brief for Defendant, at' 7-11. Defendants did not present evidence at the hearing as to what a proper reimbursement component fee per EDU would be if single-family dwellings were introduced into the equation. ~7 Id., at 8-10. Defendants did not present evidence at the hearing as to what a proper recoupment-of-public-investment component fee per EDU would be if apartment units and single-family dwellings were equated for purposes of such charges. NO. 95-4323 EQUITY TERM With regard to Defendants' contention that a reimbursement component was not permissibly applied under the circumstances of the present case, the pertinent enabling act must be examined. Section 4 of the Municipality Authorities Act of 1945, as amended, provides in pertinent part as follows: B. Every Authority is hereby granted ... the following rights and powers: ... (t) To charge certain enumerated fees to property owners who desire to or are required to connect to the Authority's sewer ... system .... (1) The fees may include some or all of the following fee components ...: .... (iii) Tapping fee. A fee which shall not exceed an amount based upon some or all of the following fee components...: .... (D) Reimbursement component. An amount necessary to recapture the allocable portion of facilities in order to reimburse the property owner or owners at whose expense such facilities were constructed.49 The act elaborates upon the reimbursement component in the following terms: 49 Act of December 19, 1990, P.L. 1227, Sl, amending Act of May 2, 1945, P.L. 382, §306, 53 P.S. §306B(t)(1)(iii)(D) (1996 Supp.). 10 NO. 95-4323 EQUITY TERM Where a property owner constructs or causes to be constructed at his expense any extension of a sewer ... system of an Authority, the Authority shall provide for the reimbursement of the property owner when the owner of another property in the development for which the extension was constructed connects a service line directly to the extension within ten years of the date of the dedication of such extension to the Authority 49 "The object of all interpretation and construction of statutes is to ascertain and effectuate the intention of the General Assembly." Act of December 6, 1972, P.L. 1339, §3, 1 Pa. C.S. S1921(a). The purpose of the enabling legislation quoted above would appear to be to encourage private construction and dedication of municipal sewer mains by requiring municipal authorities to exact contributions for the project from owners of properties directly benefitting from it by the discharge of sewage into the extension. In light of this object and the circumstances recited above, the court can not hold that the inclusion of a reimbursement component in the tapping fees applicable to the Learys' property was without statutory authorization. With regard to Defendants' contention that a distinction could not legitimately be drawn by the Authority between existing single- family dwellings and multi-family buildings for purposes of collection of a reimbursement component of the tapping fee, several principles of law are pertinent. First, a strong presumption of Id., 53 P.S. S306B(z.1) (1996 Supp.). 11 NO. 95-4323 EQUITY TERM validity attaches to the actions of a municipal body. Borough of Malvern v. Agnew, 11 Pa. Commw. 285, 314 A.2d 52 (1973). A heavy burden rests upon the party challenging the propriety of a township authority's fee classification system. Curson v. West Conshocken Municipal Authority, 148 Pa. Commw. 386, 611A.2d 775 (1992). Second, the Municipality Authorities Act broadly grants a municipal authority "all powers necessary or convenient for the carrying out of the [authority's authorized] purposes .... " Act of December 19, 1990, P.L. 1227, §1, amending Act of May 2, 1945, P.L. 382, S306, 53 P.S. §306B (1996 Supp.). Third, "[c]ourts will not review the actions of governmental bodies or administrative tribunals involving acts of discretion in the absence of bad faith, fraud, capricious action or abuse of power; they will not inquire into the wisdom of such actions or into the details of the manner adopted to carry them into execution." Glen Riddle Park, Inc. v. Middletown Township, 11 Pa. Commw. 574, 580, 314 A.2d 524, 527 (1974) (sewer rate classifications). The issue for the court in such cases is "whether there has been a manifest and flagrant abuse of discretion or a purely arbitrary execution of the agency's duties or functions." Id. That the court might have a different opinion or judgment in regard to the action of the agency is not a sufficient ground for 12 NO. 95-4323 EQUITY TERM interference; judicial discretion may not be substituted for administrative discretion.5° Finally, treatment of single-family dwellings and apartment units differently for purposes of sewer charges is not uncommon. See, e.g., Glen Riddle Park, Inc. v. Middletown Township, 11 P.a. Commw. 574, 314 A.2d 524 (1974). It is important, of course, that within a given classification charges be uniform. Id. In the present case, the Authority made a determination that apartment houses, future developments and other properties having a reasonable potential for the generation of income - as opposed to existing single-family dwellings - should bear the burden of reimbursement in connection with a privately-funded sanitary sewer extension. Single-family dwellings are typically the object of expense rathe~ than income, and generally in these circumstances involve an investment, now rendered of no value by the introduction of public sewers, in a private septic system. The Authority's rationale in this regard is not devoid of logic, and it can not fairly be characterized as a flagrant abuse of discretion or a purely arbitrary execution of the Authority's duties or functions. Validity of component relatinq to recoupment of public investment. With regard to Defendants' contention that a distinction could not legitimately be drawn by the Authority between existing single-family dwellings and multi-family buildings 5o Glen Riddle Park, Inc. v. Middletown Township, 11 Pa. Commw. 574, 580-81, 314 A.2d 524, 527 (1974). 13 NO. 95-4323 EQUITY TERM for purposes of the balance of the tapping fee (related to recoupment of public investment), it may be noted preliminarily that the general authority for imposition of such a component is contained in Section 4B(t)(iii)(A) (recoupment of funds expended for "capacity" part of system) and Section 4B(t)(1)(iii)(B) (recoupment of funds expended for "distribution or collection" part of system) of the Municipality Authorities Act of 1945, as amended,s~ Defendants do not challenge the power in principle of the Authority to charge a fee under the present circumstances for such purposes, nor does the record contain any basis to question the Authority's position that a far higher maximum fee than was adopted could have been implemented under the act. Defendants' contention that the imposition of a $2,888.00 charge per EDU in the case of apartment buildings, new developments and other properties having a reasonable potential for the generation of income, as opposed to a $2,100.00 charge in the case of existing, or effectively existing, single-family dwellings,s2 must be rejected on the basis of the reasoning heretofore employed with respect to the reimbursement component. The determination that a slightly higher charge per EDU can be fairly borne by uses Act of May 2, 1945, P.L. 382, as amended, 53 P.S. §306B(t)(1)(iii)(A), (B) (1996 Supp.). ~2 Or $1,000.00 in the case of single-family dwellings under contract since August 5, 1991. It may be doubted whether this category of property is of any practical effect at the present time. 14 NO. 95-4323 EQUITY TERM of the former type does not appear to the court to represent a flagrant abuse of discretion or a purely arbitrary execution of the Authority's duties or functions. For these reasons, the following order will be entered: DECREE NISI AND NOW, this 7th day of October, 1996, upon consideration of Plaintiff's complaint, following a nonjury trial limited to the issue of the liability of Defendants for certain sanitary sewer tapping fees, and for the reasons stated in the accompanying opinion, the court finds in favor of Plaintiff and against Defendants, jointly and severally, in the amount of $17,552.00, plus costs of suit and interest sec. leg. from the date of connection. THIS DECREE NISI shall automatically become a Final Decree unless a motion for post-trial relief is filed by either party in accordance with Pennsylvania Rule of Civil Procedure 227.1 within 10 days of the entry of this order. BY THE COURT, Richard C. Snelbaker, Esq. 44 West Main Street Mechanicsburg, PA 17055 Attorney for Plaintiff s/ J. Wesley Oler, Jr. J. Wesley Oler, Jr., J. 15 NO. 95-4323 EQUITY TERM Stephen P. Elwood, Esq. The Necho Allen No. 1Mahantongo Street Pottsville, PA 17901 Attorney for Defendants : rc 16