No. Idaho Bldg Contractors Assoc. v. City of Hayden
Annotate this CaseThe City of Hayden provided sewer service to the residents living in the City and to some persons living outside the City. To do so, the City entered into a joint powers agreement with the Hayden Area Regional Sewer Board, which operated a regional wastewater treatment plant serving the City and two other local entities. The City charged each customer it serves a bi-monthly fee, which covered a proportionate share of the operation and maintenance of the City's sewer collection system and of the operation and maintenance costs associated with the regional wastewater treatment facility. In addition to the bi-monthly fee, the City charged a one-time "sewer capitalization fee" for each new structure, whether residential or commercial, and for any addition to an existing commercial structure that would result in an increase in the volume of sewage generated. The capitalization fee was charged when a building permit is issued. In March 2006, the City contracted with an engineering company to update the City's sewer master plan. The engineering company submitted a capital improvement plan in which it recommended forty projects that would cost about $20 million in order to replace existing infrastructure and to construct new infrastructure so that the sewer system would reach the entire area of city impact and accommodate anticipated future population growth. In order to finance the project, the engineering company recommended that the part of the capitalization fee retained by the City be increased from $735 for one equivalent residence ("ER") to $2,280 for one ER. In 2010, the North Idaho Building Contractors Association filed suit to have the fee declared unlawful because it was an impermissible tax rather than a fee for services. The district court held that it was lawful and entered a judgment dismissing the complaint. The City requested an award of attorney fees, which the court denied. The Contractors Association appealed the dismissal of its complaint, and the City cross-appealed the denial of an award of attorney fees. Because there was nothing in the record showing that as of June 7, 2007, the sum of $2,280 was the actual cost of providing sewer service to a customer connecting to the City sewer system and there was no showing that the amount of the fee was based upon any such calculation, the fee was not authorized by Idaho Code section 63-1311(1). The Supreme Court concluded the district court erred in holding that it was.
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