Pollack v. City of Burlington

                                 ENTRY ORDER

                       SUPREME COURT DOCKET NO. 90-422

                             DECEMBER TERM, 1991

 Stephen Pollak et al.              }         APPEALED FROM:
                                    }
                                    }
       v.                           }         Chittenden Superior Court
                                    }
 City of Burlington                 }
                                    }         DOCKET NO. S837-88 CnC


                In the above entitled cause the Clerk will enter:

      Stephen Pollak and other landlords appeal a judgment dismissing their
 complaint on the ground that Burlington was authorized to charge them a
 particular fee to pay the cost of its minimum housing program and that the
 amount of the fee reasonably reflected the cost of the program.

      On February 1, 1988, the City of Burlington amended its minimum housing
 ordinance by adopting a fee charged to owners of rental housing.  Included
 in the fee, in addition to the cost of inspections, was the cost of
 providing support services to the housing board of review and educational
 and mediation services provided to landlords and tenants.

      Defendants claimed first that the amendment was not permitted by the
 enabling legislation, which states:

           For the purposes of promoting the public health, safety,
      morals or general welfare, and for the purpose of making
      dwelling premises safe, sanitary and fit for human habitation,
      a municipality may adopt, amend and revise an ordinance for the
      establishment and enforcement of minimum standards for dwellings.
      24 V.S.A. { 5003(a).

 Although { 5003(a) does not specifically grant the authority to charge a
 fee, this Court has adopted the widely accepted view that authority given to
 a municipality to enact ordinances regulating businesses includes by
 implication the authority to charge a reasonable regulatory fee to cover the
 cost of the regulation.  Vermont Salvage Corp. v. Village of St. Johnsbury,
 113 Vt. 341, 349-50 (1943).

      Moreover, the legislature has directed that the law "shall be construed
 most favorably to municipalities, its intention being to give them the
 fullest and most complete powers possible concerning the subject matter
 hereto."  24 V.S.A. {5009.   Thus, the city is mandated to create and
 maintain a housing board of review empowered to hear and resolve disputes
 arising out of the enforcement of municipal housing code ordinances. 24
 V.S.A. { 5005.  As part of its Minimum Housing Program, the city has a
 security deposit provision.  City of Burlington, Code of Ordinances, Chapter
 18, { 18-120.  Disputes arising thereunder, therefore,  are required by
 { 5005 to be resolved by the housing board of review because, as defendants
 concede, the nonpayment of rent may be
  related to habitability. Since the housing board of review was intended by
 the Legislature to be an integral part of a municipality's regulatory
 scheme, the costs incurred by the board, including support services, are
 properly included in the regulatory fee.  See, Greenacres Apartments, Inc.
 v. Bristol Township, 85 Pa. Commw. 572, 482 A.2d 1356, 1359 (1984).

      While defendants argue that the funding of education and mediation
 services is so unrelated to housing standards that the fee should not cover
 their cost, such services constitute adherence by the city to its mandate
 under the legislation to maintain, as well as establish, standards.  The
 city's legislative body concluded that the service provided to landlords and
 tenants would reduce the incidence of substandard dwellings and decrease
 controversies requiring resolution by the housing board of review.  In light
 of the well-established judicial deference given to legislative findings,
 the trial court properly disposed of the issue.

      Defendants also contend that in determining whether the revenue
 generated by the fee reasonably reflected the cost of implementing the
 regulation, the trial court excluded evidence of revenue available from
 another but related regulatory program.  They argue that revenue previously
 provided to or generated by the Inspection Services Division from building
 permits and the like generated a surplus that should be considered as
 available to fund the minimum housing program, thereby making the minimum
 housing fee unnecessary.  In support of their argument, defendant sought to
 introduce evidence of the budget of the Inspection Services Division.  The
 trial court found that the budget of the Inspection Services Division was
 unrelated to that of the minimum housing program and therefore was
 irrelevant in determining the reasonableness of the minimum housing fees
 charged.

      While a regulatory fee should be set to reasonably reflect the cost of
 administering the particular regulation, Champlain Valley Exposition v.
 Village of Essex Junction, 131 Vt. 449, 455 (1973), courts are obliged to
 presume that a regulatory fee is reasonable, and the burden of proof is upon
 the party attacking the fee to show that it is excessive in relation to the
 cost of the regulatory services.  Id.   Fees from other regulatory
 programs, however, may not be used to subsidize the cost of another program.
 Vermont Salvage Corp., 113 Vt. at 350.  Thus, evidence of revenue to the
 Inspection Services Division from sources other than the minimum housing
 program fee was properly excluded.

      Affirmed.

                                    BY THE COURT:

                                    ______________________________________
                                    Frederic W. Allen, Chief Justice

                                    _______________________________________
                                    Ernest W. Gibson III, Associate Justice

                                    _______________________________________
                                    John A. Dooley, Associate Justice

                                    _______________________________________
                                    James L. Morse, Associate Justice


                                    _______________________________________
                                    Denise R. Johnson, Associate Justice
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