Mawhinney v. City of Draper , 774 Utah Adv. Rep. 28 ( 2014 )

This opinion is subject to revision before final
publication in the Pacific Reporter
2014 UT 54
IN THE
S UPREME C OURT OF THE S TATE OF U TAH
LANA MAWHINNEY , CHRISTINE MC CLORY, and JAMES WHITEHEAD ,
Petitioners,
v.
CITY OF DRAPER and the TRAVERSE RIDGE SPECIAL SERVICE DISTRICT,
Respondents.
Case No. 20140828
Filed November 25, 2014
Original Proceeding in this Court
Attorneys:
Lana Mawhinney, Christine McClory, and James Whitehead,
Draper, pro se petitioners
Douglas J. Ahlstrom, Benjamin C. Rasmussen, Draper,
for Draper City respondent
J. Craig Smith, Kathryn J. Steffey, Steven R. Schaefermeyer, Salt
Lake City, for Traverse Ridge Special Services District respondent
JUSTICE PARRISH authored the opinion of the Court, in which
CHIEF JUSTICE DURRANT, JUSTICE DURHAM , JUSTICE LEE,
and JUDGE VOROS joined.
ASSOCIATE CHIEF JUSTICE NEHRING does not participate herein;
COURT OF APPEALS JUDGE J. FREDERIC VOROS, JR. sat.
JUSTICE PARRISH , opinion of the Court:
INTRODUCTION
¶1 On petition for writ of extraordinary relief, petitioners
Lana Mawhinney, Christine McClory, and James Whitehead
(collectively, Petitioners) ask us to order the City of Draper (City) to
certify their petition for referendum. Specifically, they seek to refer
Resolution No. TRSSD 14-02 (Resolution) to the voters of the
Traverse Ridge Special Service District (District) in the November
2014 general election. The Resolution, enacted on June 24, 2014,
levies a tax on the property within the District.
MAWHINNEY v. DRAPER CITY
Opinion of the Court
¶2 The City refused to certify the petition, asserting that the
tax levy was a nonreferable administrative action and that the
subjurisdictional referendum statute, pursuant to which the
petitioners sought the referendum, unconstitutionally limits the
number of Draper City residents who are entitled to vote on the
issue. We grant Petitioners’ requested relief because the Resolution
was improperly rejected by the City. The Resolution, which levies a
tax, is properly referable to the voters because it is legislative in
nature. And we are unpersuaded by the City’s constitutional
challenge to the subjurisdictional referendum statute.
BACKGROUND
¶3 The City of Draper created the Traverse Ridge Special
Service District in 1999 to provide additional services to property
located within its boundaries. These consist of “transportation,
including snow removal, street lighting services, repairing and
maintaining roads, sweeping and disposal service.” In 2001, by a
vote of six to two, the voters of the District authorized the City to
levy and collect taxes to fund the District’s operations. They passed
the following proposition:
Shall the City Council of Draper City be authorized to
annually levy and collect taxes from the owners of
property within the Traverse Ridge Special Service
District according to the assessed valuation of such
property based on a mill levy not exceeding 10 mills,
for the purpose of providing transportation, including
snow removal, street lighting services, repairing and
maintaining roads, sweeping and disposal services
and facilities within the boundaries of the Traverse
Ridge Special Service District?
That same year, “the Board of Directors of the Traverse Ridge
Special Service District” “passed and adopted” Resolution No. 01-02.
That resolution “established” a “Certified Tax Rate” for the District.
¶4 On June 24, 2014, the “City Council of Draper City, acting
as the Board of Directors of the Traverse Ridge Special Service
District,” “passed and adopted” Resolution No. TRSSD 14-02, which
“established” a 2014 “Equalized Property Tax Rate” for all property
located in the District. Five residents collected verified voter
signatures and asked the City to refer the Resolution to the voters of
the District. Nevertheless, the City rejected the referendum petition,
asserting that “referendums challenging actions taken by special
service districts are not authorized by the Utah Constitution.”
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Opinion of the Court
Petitioners filed in this court a petition for writ of extraordinary
relief, pursuant to Utah Code section 20A-7-607(4)(a), and a motion
for emergency relief, pursuant to rule 23C of the Utah Rules of
Appellate Procedure. We heard oral argument and issued an order
granting the requested relief on September 17, 2014, noting that this
opinion would follow. We have jurisdiction under Utah Code
section 78A-3-102(2).
STANDARD OF REVIEW
¶5 The Utah Constitution vests this court with “original
jurisdiction to issue all extraordinary writs.”1 A petition for
extraordinary writ is appropriate where petitioners possess “no
other plain, speedy, or adequate remedy.”2 However, the decision
to grant such a petition “lies within the sound discretion of this
court.”3
¶6 Petitioners’ request for extraordinary relief turns on
whether the City of Draper properly concluded that the Resolution
was not referable to the voters. Our review is therefore “confined to
discerning the proper interpretation of . . . the Utah Code” and the
Utah Constitution.4 We undertake this review applying a standard
of correctness, granting no deference to the City’s legal conclusions.5
ANALYSIS
¶7 Petitioners seek to refer Resolution No. TRSSD 14-02 to the
voters of the Traverse Ridge Special Service District. Respondents,
City of Draper and the Traverse Ridge Special Service District,6
object, arguing that the Resolution is not referable. We hold that the
Resolution—which levies a tax—is legislative in nature and is
therefore properly referable to the voters of the District.
¶8 Our analysis proceeds in three parts: First, we reiterate our
test for identifying legislative actions in the context of the people’s
1
UTAH CONST . art. VIII, § 3.
2
Krejci v. City of Saratoga Springs, 2013 UT 74, ¶ 7, 322 P.3d 662
(citing UTAH R. APP. P. 19(b)(4)).
3
Proulx v. Salt Lake City Recorder, 2013 UT 2, ¶ 5, 297 P.3d 573
(internal quotation marks omitted).
4
Mouty v. Sandy City Recorder, 2005 UT 41, ¶ 11, 122 P.3d 521.
5
Id.
6
While we refer to the respondents in this case collectively as the
City, we recognize that each retains distinct legal significance.
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MAWHINNEY v. DRAPER CITY
Opinion of the Court
legislative power. Second, we hold that levying a tax is legislative in
nature. Finally, we address three additional arguments raised by the
City in urging us to deny the petition.
I. THE PEOPLE’S LEGISLATIVE POWER
¶9 Article VI, section 1 of the Utah Constitution vests “[t]he
Legislative power of the State” in “the Legislature” and “the
people.” Because our government is one of “distinct departments,”
neither the Legislature nor the people, exercising legislative power
through an initiative or referendum, may “exercise any functions
appertaining to either of the” executive or judicial departments of
government.7 In essence, the people’s legislative power is
constrained to that which is legislative in nature. As a result,
executive and administrative actions are not referable.8
¶10 Some referenda are easy to sustain as legislative in nature
because they challenge the actions of a strictly legislative body. For
example, in Mouty v. Sandy City Recorder, we held that a referendum
on an ordinance properly enacted by a city council in a municipality
with a council-mayor form of government is “necessarily legislative”
because that form of government specifies that the city council may
exercise only the legislative power of the municipality.9
¶11 Some municipalities, however, employ a form of
government with commingled powers.10 Unlike the council-mayor
form of government at issue in Mouty, these forms of government
vest both executive and legislative powers in one body.11 With
municipal powers thus commingled, as is the case here for Draper
City,12 we must identify an exercise of municipal power as legislative
before the people may seek to overturn it through a referendum.
And unfortunately, it is not always possible to make this
7
UTAH CONST . art. V, § 1.
8
Carter v. Lehi City, 2012 UT 2, ¶ 17, 269 P.3d 141.
9
Mouty v. Sandy City Recorder, 2005 UT 41, ¶ 28, 122 P.3d 521. The
council-mayor form of local government is set out in Utah Code
sections 10-3b-201 to -205.
10
See UTAH CODE §§ 10-3b-301 to -303, -401 to -403.
11
Compare Id. § 10-3b-201 (vesting municipal powers in two
“separate, independent, and equal branches”), with id. §§ 10-3b-301,
-401 (vesting municipal powers in the council).
12
DRAPER CITY, UTAH , MUNICIPAL CODE §§ 2-1-010 to -030.
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Opinion of the Court
identification through application of bright-line rules. In Carter v.
Lehi City, we articulated a general framework for determining
whether an initiative or referendum is properly identified as an
exercise of legislative power.13
¶12 We recognized two key hallmarks of legislative power:
general applicability and policy weighing.14 First, legislative power
produces generally applicable laws—laws that “appl[y] to everyone
within [a] geographical area . . . or to everyone within a category of
persons engaged in a particular activity.”15 While a geographical
area or category may be quite large, an action may apply to only a
small geographical area or category and still be generally applicable.
For example, we held in Carter that a ballot initiative setting a pay
cap and residency requirement for only a handful of city employees
was nevertheless legislative in nature.16 Similarly, in Mouty, we held
that a zoning amendment that affected only a one-hundred-acre
parcel of land was legislative.17 In these hard cases where
governmental action affects only a small area or a few people, we
have noted that general applicability can be evaluated
temporally—by asking whether the action “governs all future cases
falling under its provisions and not just specified individuals.”18
¶13 The second hallmark of legislative decision-making is that
it involves “weigh[ing] broad policy considerations, not the specific
facts of individual cases.”19 In exercising legislative power, therefore,
a legislative body must “consider[] the wide range of policy
considerations of relevance to all who fall within the scope of a
particular law.”20
¶14 Additionally, because “the people’s legislative power is the
same—and is coextensive with the power delegated to the
[L]egislature—regardless of whether that power is wielded on a
13
Carter, 2012 UT 2, ¶¶ 32–50.
14
Id. ¶ 34.
15
Id. ¶ 36 (internal quotation marks omitted).
16
Id. ¶¶ 76–80.
17
Mouty, 2005 UT 41, ¶¶ 2–6, 28.
18
Carter, 2012 UT 2, ¶ 52 (footnote omitted) (internal quotation
marks omitted).
19
Id. ¶ 38.
20
Id.
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MAWHINNEY v. DRAPER CITY
Opinion of the Court
statewide or local level,” it is helpful to compare an action in
question to those actions undertaken by the Utah Legislature
pursuant to the specific powers granted to that body by the Utah
Constitution.21 And those powers that have traditionally been the
province of the Utah Legislature, though not expressly discussed in
the Utah Constitution, are likewise helpful in analyzing whether an
action is legislative in nature.
II. A TAX LEVY IS LEGISLATIVE
¶15 In this case, Petitioners seek to refer the Resolution to the
voters of the District while the City argues that the Resolution is not
referable because it does not represent an exercise of legislative
power. The Resolution was “passed and adopted by the City Council
of Draper City, acting as the Board of Directors of the Traverse
Ridge Special Service District.”22 The Resolution “establishe[s]” the
District’s 2014 property tax rate. In short, the Resolution levies a tax
upon the property owners in the District. And levying a tax is a
quintessential expression of legislative power.
¶16 First, this levied tax is generally applicable. The tax rate
established for the District applies to all property located in the
District’s geographical boundaries. The District contains several
thousand acres, much more than the one-hundred-acre parcel
effected in Mouty.23 Further, the tax applies to all who own property
in the District at the time the tax is due, regardless of whether they
owned such property at the time the tax was enacted.
¶17 Second, deciding whether to levy the tax required
weighing broad and competing policy concerns. The members of the
City Council of Draper City were required to weigh the need for and
21
Id. ¶ 31.
22
At oral argument some members of this court expressed
concern about whether the members of the Draper City Council,
acting as the Board of Directors of the Traverse Ridge Special Service
District, properly enacted the Resolution. We do not address this
issue because neither party contends that the City Council lacked
authority to pass the Resolution and levy the tax. Moreover, the
propriety of a legislative action does not determine its referablity. To
hold otherwise would prevent the people from using their legislative
power to overturn—or ratify—ultra vires legislative action.
23
Mouty v. Sandy City Recorder, 2005 UT 41, ¶¶ 2–6, 28, 122 P.3d
521.
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Opinion of the Court
benefit of the services to be provided to the property owners in the
District against the tax burden to be imposed. It also required that
the council anticipate the financial needs of the District in the coming
year and consider whether the District should accrue reserves for
future projects. Finally, they had to consider the possible
implications of lowering the tax when future needs might require a
subsequent tax increase.24 In short, the selection of the tax rate
represents a conscious policy choice adopted after weighing the
benefits and burdens of various tax rates.
¶18 Our conclusion that levying a tax is an exercise of
legislative power is consistent with the fact that levying taxes is a
power given to the Legislature by the Utah Constitution.25 And it is
a power the Legislature has traditionally exercised.26 We hold,
therefore, that levying a tax is a legislative action that is properly
referable to the voters.
III. THE CITY’S OTHER ARGUMENTS ARE UNPERSUASIVE
¶19 The City raises three additional arguments in support of its
position that the Resolution is not referable: First, the City argues
that the Resolution is not a tax levy. Second, the City argues that a
referendum on the Resolution violates the Utah Constitution
because it relies upon an unconstitutional statutory provision that
would limit the number of voters who are entitled to vote on the
issue. Third, the City argues that limiting the referendum to District
residents disenfranchises non-District voters within the City because
the City may be impacted financially. We are unpersuaded by these
arguments.
24
See UTAH CODE §§ 59-2-919, -924 (requiring notice and public
hearing when a proposed tax will increase revenue).
25
See, e.g., UTAH CONST . art. XIII, § 2(5) (“The Legislature may by
statute determine the manner and extent of taxing or exempting
intangible property . . . .”); id. art. XIII, § 4(1) (“Nothing in this
Constitution may be construed to prevent the Legislature from
providing by statute for taxes other than the property tax and for
deductions, exemptions, and offsets from those other taxes.”); id. art.
XIII, § 5(1) (“The Legislature shall provide by statute for an annual
tax sufficient, with other revenues, to defray the estimated ordinary
expenses of the State for each fiscal year.”).
26
See, e.g., UTAH CODE § 59-10-104 (imposing an individual
income tax of 5%); id. § 59-12-103 (imposing sales and use tax rates).
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Opinion of the Court
A. The Resolution Is a Tax Levy
¶20 The City argues that the Resolution does not levy a tax, but
instead represents only an administrative implementation of an
already existing tax. Levying a tax, the City claims, requires a tax
increase. But the City’s argument is inconsistent with the actions
undertaken and the statutory framework on which it relies.
¶21 First, the City’s argument is belied by the text of the
Resolution itself and past City and District resolutions. The City has
proffered no evidence that it levied a tax in 2001 that was to continue
year after year. And the proposition put to the voters in 2001
indicates the contrary. It reads: “Shall the City Council of Draper
City be authorized to annually levy and collect taxes from the
owners of property located within the Traverse Ridge Special
Service District . . . ?” Under this language, taxing authority was
granted, but no tax was levied. And the taxing authority granted
was for an annual tax levy, not a levy to continue in perpetuity.27
Moreover, the resolution proffered by the City as the initial tax levy
in 2001 is virtually indistinguishable from the 2014 tax levy at issue
here. The only conclusion to be drawn from the text of these
documents is that the City was granted taxing power by the people
in 2001 and has since then “annually lev[ied] and collect[ed] taxes”
pursuant thereto.
¶22 The City also argues that the Resolution does not qualify
as a tax levy because it was not required to provide notice and
public hearing under Utah Code section 59-2-919(2), a process
commonly known as Truth in Taxation.28 That subsection states that
“[a] taxing entity may not levy a tax rate that exceeds the taxing
entity’s certified tax rate unless the taxing entity meets” certain
notice and hearing requirements.29 The phrase “that exceeds” is
“defining, or restrictive”—it identifies those tax levies requiring
27
Indeed, the Legislature does not allow taxing entities to levy
perpetual property taxes. See UTAH CODE § 59-2-912 (requiring each
taxing entity “before June 22 of each year” to “adopt” and “report
the [tax] rate and levy . . . to the county auditor”).
28
Truth in Taxation, UTAH STATE TAX COMMISSION—PROPERTY TAX
DIVISION (last updated Jan. 8, 2013), http://propertytax.utah.gov/
property-tax-rates/truth-in-taxation/truth-in-taxation-process.
29
UTAH CODE § 59-2-919(2) (emphasis added).
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Opinion of the Court
notice and hearing.30 But it does not define what constitutes a tax
levy.
¶23 The City’s argument also is inconsistent with an earlier
section in the same part of the Utah Code stating that “the governing
body of each taxing entity shall before June 22 of each year: (a) adopt
a proposed tax rate, or if the tax rate is not more than the certified
tax rate, a final tax rate for the taxing entity; and (b) report the rate
and levy . . . to the county auditor of the county in which the taxing
entity is located.”31 This provision indicates that a taxing authority
levies a tax each year, regardless of whether the tax levied represents
a tax increase, a tax decrease, or a tax equivalent to the tax levied the
prior year.32 We therefore conclude that the Resolution does, in fact,
levy a tax.
B. Subjurisdictional Referenda are Constitutional
¶24 The City next argues that this tax levy is not subject to a
referendum because it was enacted by the District, and not the
City.33 Utah Code section 20A-7-601(3) allows residents of a
subjurisdiction, such as the District, to challenge laws applicable to
that subjurisdiction through a referendum. But the City argues that
this provision is unconstitutional because it would limit the number
of Draper City citizens who are entitled to vote on the referendum
30
See WILLIAM STRUNK JR. & E.B. WHITE, THE ELEMENTS OF STYLE
59 (4th ed. 2000).
31
UTAH CODE § 59-2-912(1). However, “[i]f the governing body
of a taxing entity fails to comply . . . , the auditor of the county . . .
shall . . . forward all available documentation to the [State Tax
Commission,]. . . .[which] shall hold a hearing on the matter and
certify an appropriate tax rate.” Id. § 59-2-912(3).
32
Other provisions support this conclusion. E.g., id. § 59-2-901
(“Before June 22 of each year the [State Tax Commission] shall
determine the rate of state tax to be levied and collected upon the
taxable value of all property in the state sufficient to raise the
amount of revenue specified by the Legislature for general state
purposes.”).
33
In the specific context of levying taxes, we note that neither the
constitution nor the applicable statutes allow a special service
district to levy property taxes; property taxes for the district must be
levied by the county or municipality that established the district. See
UTAH CONST . art. XI, § 7(1)(b); UTAH CODE § 17D-1-301(3)(c).
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Opinion of the Court
to those citizens residing within the District. The City also argues
that this provision is inconsistent with the legislative power reserved
to the voters in the Utah Constitution, which provides that “[t]he
legal voters of any county, city, or town . . . may . . . require any law
or ordinance passed by the law making body of the county, city, or
town to be submitted to the voters thereof.”34
¶25 We are unpersuaded by the City’s constitutional challenge.
Under the constitution, “[t]he Legislative power of the State [is]
vested in . . . the Legislature . . . [and in] the people.”35 While the
constitution specifies that certain legislative power remains in the
people, it in no way prohibits the Legislature from delegating to the
people additional legislative power. The Legislature may delegate
some of that power by statute to the people of a subjurisdiction if it
chooses. And the Legislature has done just that. By enacting Utah
Code section 20A-7-601(3), the Legislature has delegated legislative
power to the residents of subjurisdictions by creating a procedure
that allows subjurisdictional legislation to be referred to the voters
of the subjurisdiction.36 And there is nothing about this delegation
of legislative power that is inconsistent with the constitutional
provision reserving legislative power to the people.
C. A Vote by District Residents Does Not Disenfranchise Non-District
Residents of the City
¶26 The City finally argues that non-District residents of the
City will be disenfranchised if they are not allowed to vote on this
referendum because it may impact the City’s finances. We disagree.
Because the referendum concerns a tax levied only on the residents
of the District, non-District residents will not be directly impacted by
the vote. In the event that the voters in the District reject the
34
UTAH CONST . art. VI, § 1(2)(b) (emphasis added).
35
Id. art. VI, § 1(1).
36
UTAH CODE § 20A-7-601(3). A subjurisdiction is “an area
comprised of all precincts and subprecincts in the jurisdiction of a
county, city, or town that are subject to a subjurisdictional law.” Id.
§ 20A-7-601(3)(a)(i). A subjurisdictional law is a “law or local
obligation law passed by a local legislative body that imposes a tax
or other payment obligation on property in an area that does not
include all precincts and subprecincts under the jurisdiction of the
county, city, or town.” Id. § 20A-7-601(3)(a)(ii). It is undisputed that
the District is a subjurisdiction and that the Resolution is a
subjurisdictional law.
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District’s property tax levy, the city council will then need to
confront how to replace the lost revenue. Any financial impact on
the City—whether through additional taxes or reallocation of
resources—must first be approved by the city council, which
represents all residents of the City. If voters of the City disagree with
the legislative action the city council takes in response to any
revenue lost as a result of this referendum, they can then seek a
referendum to challenge that action.
CONCLUSION
¶27 The City of Draper improperly rejected the referendum
petition for Resolution No. TRSSD 14-02, which levies a tax on
property within the Traverse Ridge Special Service District. As a
quintessential exercise of legislative power, the decision to levy a tax
is referable to the voters. We therefore grant the petition for writ of
extraordinary relief.
11