Sanitation District 1 v. Daniel Louis Weinel ( 2020 )

RENDERED: OCTOBER 2, 2020; 10:00 A.M.
TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2019-CA-1002-DG
SANITATION DISTRICT NO. 1 APPELLANT
ON DISCRETIONARY REVIEW FROM CAMPBELL CIRCUIT COURT
v. HONORABLE DANIEL J. ZALLA, JUDGE
ACTION NO. 18-XX-00008
DANIEL LOUIS WEINEL APPELLEE
OPINION
REVERSING AND REMANDING
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BEFORE: ACREE, COMBS, AND MAZE, JUDGES.
MAZE, JUDGE: Sanitation District No. 1 (SD1) brings this matter on
discretionary review from an order of the Campbell Circuit Court. The circuit
court affirmed an order of the Campbell District Court finding that SD1 was not
authorized to impose a stormwater drainage fee on property within its service area
owned by Daniel Louis Weinel. We conclude that Weinel’s property must be
construed as a user of SD1’s stormwater drainage plan because his property drains
to a watershed within SD1’s service area. Therefore, the district court clearly erred
in finding that SD1 was not authorized to impose the fee. Hence, we reverse the
opinion and order of the Campbell Circuit Court, and remand with directions to the
Campbell District Court to enter a judgment for SD1 in the amount of the arrearage
for unpaid fees.
The underlying facts of this matter are not in dispute. Weinel is the
owner of residential property located at 9122 Heritage Court in Alexandria,
Campbell County, Kentucky. SD1 is a sanitation district established pursuant to
KRS1 Chapter 220. SD1 encompasses the Kentucky counties of Boone, Campbell,
and Kenton, and its service area includes Weinel’s property. Pursuant to its
statutory mandate, SD1 operates both sanitary sewer and stormwater drainage
systems throughout the district.
SD1 assessed stormwater service fees of approximately $5.04 per
month against Weinel’s property. Weinel refused to pay the assessments, resulting
in a past-due balance of $792.70. SD1 brought an action in the small claims
division of Campbell District Court to collect the arrearage. Weinel responded that
SD1 was not authorized to collect such fees because he receives no sanitation or
stormwater services from SD1.
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Kentucky Revised Statutes.
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After hearing testimony and taking evidence from both sides, the
district court agreed with Weinel. The court found that under KRS 220.510 and
220.515, a sanitation district only has the power to make and collect charges from
“users” of its sanitary works. The court further found that SD1 may only charge
fees to non-users if it has begun work on plans and specifications for the
improvement of services to the non-user’s property. Since Weinel’s property is not
served by any sanitary sewers and SD1 has no plan in place to provide such
services to his property, the district court concluded that SD1 was not authorized to
impose service fees on his property.
SD1 then appealed this decision to the Campbell Circuit Court. On
review, the circuit court affirmed the district court’s conclusions. This Court
accepted SD1’s motion for discretionary review of the circuit court’s opinion and
order. Additional facts will be set out below as necessary.
The sole question presented in this case concerns SD1’s authority to
impose stormwater drainage fees on Weinel’s property. As this matter was tried
before the district court without a jury, our review of factual determinations is
under the clearly erroneous rule. CR2 52.01. A finding of fact is not clearly
erroneous if it is supported by substantial evidence, which is “evidence of
substance and relevant consequence having the fitness to induce conviction in the
2
Kentucky Rules of Civil Procedure.
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minds of reasonable men.” Owens-Corning Fiberglas Corp. v. Golightly, 976
S.W.2d 409, 414 (Ky. 1998) (citations omitted). It is within the province of the
trial court as the fact-finder to determine the credibility of the witnesses and the
weight given to the evidence. Frances v. Frances, 266 S.W.3d 754, 756 (Ky.
2008). However, matters of statutory interpretation are issues of law, which we
review de novo. Jefferson Cty. Bd. of Educ. v. Fell, 391 S.W.3d 713, 718 (Ky.
2012).
The question in this case comes down to whether Weinel is a “user”
of SD1’s stormwater drainage system. A sanitation district, such as SD1, has the
authority to charge fees for sanitary sewage collection and for stormwater drainage
systems. Wessels Co., LLC v. Sanitation Dist. No. 1, 238 S.W.3d 673, 676-77 (Ky.
App. 2007) (citing KRS 220.030, 220.110, 220.280, 220.510, and 220.515).
Specifically, KRS 220.515 provides:
The district may establish a surcharge or other rate, fee,
or charge to be made applicable to users in areas where
facilities are to be acquired, constructed, or established,
and to amortize part or all of the costs thereof, in addition
to the charge authorized by KRS 220.510. The
surcharges, rates, fees, or charges shall be determined on
the basis of one (1) or more of the factors stated in KRS
220.510, and may include, at the discretion of the district,
a finance charge not to exceed ten percent (10%). In
carrying out any rate, fee, or charge classification, the
district shall follow the procedures set forth in KRS
220.593(2).
(Emphasis added.)
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The “charge authorized by KRS 220.510” is predicated upon the
following factors:
The board of directors shall, by resolution, determine the
rates and compensation or rentals to be charged for the
use of the sanitary works. The board of directors may
provide for a sewer service charge to be imposed and
collected, beginning at the time the plan for the
improvement has been approved by the Energy and
Environment Cabinet and work is begun on plans and
specifications for the improvement. The rates shall at all
times be reasonable, taking into account the cost of the
works, the cost of operation and maintenance, and the
amount necessary for the amortization of the bonds
issued to finance the works. The same schedule of rates
and charges shall apply to all users of the same class.
The rates shall be binding upon all users of the system.
The board may alter and revise the rates in its discretion.
In case of failure of any user to pay for services rendered,
the board may compel payment and may enjoin further
use until the payment is made, or it may institute an
action in any court having jurisdiction for the recovery of
charges for services rendered . . . .
KRS 220.510(1) (emphasis added).
Weinel argued, and the lower courts agreed, that he is not a “user” of
SD1’s sanitary sewer or stormwater drainage system. Weinel’s property is served
by a septic system and there was no evidence of a drain on his property leading
directly to a stormwater drainage system maintained by SD1. The lower courts
held that KRS 220.510(1) authorizes SD1 to impose reasonable fees or rates on
users of its system. However, the courts concluded that KRS 220.515 only
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authorizes SD1 to impose such fees or rates where it actually provides drainage
systems or where a “plan for improvement” has been made and approved, and
“work is begun on plans and specifications for the improvement.” Since SD1 did
not present any evidence of such plans or work begun on serving Weinel’s
property, the courts determined that SD1 was not authorized to impose any fee.
Weinel finds support for this interpretation in Stierle v. Sanitation
District Number 1 of Jefferson County, 243 S.W.2d 678 (Ky. 1951). However,
Stierle involved an unusual situation and is distinguishable on several factual and
legal grounds. Most significantly, the property owner lived in the sanitation
district’s service area but had contracted with a city agency for sewer service. The
sanitation district and the city agency contracted to allow the city agency to extend
sewers into the sanitation district’s service area. But subsequently, a dispute arose
between the city agency, the sanitation district, and the property owner over who
was authorized to bill for sewer service. Id. at 679-80.
The former Court of Appeals first concluded that the contract
allowing the city agency to extend sewers into the sanitation district’s territory was
beyond the statutory authority of either entity to make. Id. at 680. On the other
hand, the Court also held that KRS 220.510 did not give a sanitation district the
power to collect charges from persons who were not using its sanitary works. Id.
at 680-81. The Court recognized that these holdings left ownership of the sewer
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system in dispute. But the Court concluded that the city agency could continue
collecting sewer service charges until that issue was resolved. Id. at 682.
Unlike in Stierle, the current case does not involve a dispute regarding
the statutory authority of different agencies. Rather, Weinel’s property is clearly
within the service area of SD1 even though no sanitary or stormwater sewers have
been extended to his property. SD1 takes the position that all properties within its
service area are benefited by its system, even if there is no drain on the subject
property. SD1 notes that, in Curtis v. Louisville & Jefferson County Metropolitan
Sewer District, 311 S.W.2d 378 (Ky. 1958), the former Court of Appeals stated
that “any property that [geographically] is a part of the watershed or drainage basin
may properly be considered to be benefited by the project through the general
improvement of conditions of health, comfort and convenience in the area and the
resulting general enhancement of values in the area.” Id. at 382.
In Curtis, the Court was addressing the constitutionality of former
KRS 76.260, which established a presumption that all land within the designated
improvement area will receive some benefit and, therefore, is subject to
assessment. SD1 concedes that this section has since been repealed. Nevertheless,
it argues that the presumption remains applicable because its statutory mandate
requires it to manage stormwater drainage throughout the district. We agree.
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As discussed in Wessels, the General Assembly enacted KRS 220.030
to authorize sanitation districts, such as SD1, to assume responsibility for
management of stormwater within its boundaries. Wessels, 238 S.W.3d at 674-75.
In 1994, the General Assembly granted sanitation districts this authority to comply
with federal regulations intended to address public health risks associated with
stormwater runoff,
which had been shown to contain high levels of
sediments and other pollutants such as phosphorus and
nitrogen from fertilizers, pesticides, petroleum products,
and construction chemicals that “can be toxic to aquatic
organisms and degrade water for drinking and water-
contact recreation.” 57 Fed.Reg. at 41344, 41345
(September 9, 1992). A large influx of storm water into
sanitary sewage systems had also been shown to dilute
the system’s ability to properly treat sanitary waste.
Id. at 675.
SD1 is tasked with the management of stormwater drainage for all
properties within its service area. This responsibility also includes drainage for all
public roads owned by cities and counties within the service area. Unlike sanitary
sewer systems, which only serve connected properties, SD1’s stormwater drainage
plan serves all watersheds within its service area.
Given SD1’s statutory mandate to manage stormwater drainage, we
conclude that KRS 220.510 must be construed broadly to effectuate the purposes
of the enactment. Since Weinel’s property clearly drains to a watershed within
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SD1’s service area, we conclude that the property is a “user” of SD1’s stormwater
drainage plan, even though it is not physically connected to a sewer system.
Therefore, we find that SD1 was authorized to impose stormwater drainage fees on
Weinel’s property.
Accordingly, we reverse the opinion and order of the Campbell
Circuit Court affirming the order of the Campbell District Court dismissing SD1’s
complaint for past-due assessments against Weinel’s property. We remand this
matter to the circuit court for entry of an order directing the district court to enter a
judgment for SD1 against Weinel in the amount of $792.70.
ALL CONCUR.
BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE:
Jeffrey C. Mando Christopher Wiest
Olivia F. Amlung Crestview Hills, Kentucky
Covington, Kentucky
ORAL ARGUMENT FOR ORAL ARGUMENT FOR
APPELLANT: APPELLEE:
Jeffrey C. Mando Christopher Wiest
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