IN THE COURT OF APPEALS

STATE OF ARIZONA

DIVISION TWO

ROBSON RANCH QUAIL CREEK,

LLC, a Delaware limited liability

company, and LAWYERS TITLE OF

ARIZONA, INC., as Trustee under its

Trust No. 7916-T,

Plaintiffs/Appellants,

v.

PIMA COUNTY, a political subdivision

of the State of Arizona, ANN DAY,

RAMON VALADEZ, SHARON

BRONSON, RAYMOND J. CARROLL

and RICHARD ELIAS, as members of the

Board of Supervisors of Pima County,

Arizona; CHARLES H.

HUCKELBERRY, County Administrator

of Pima County; and KATHLEEN M.

CHAVEZ, Director, Pima County

Wastewater Management Department,

Defendants/Appellees. )

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) 2 CA-CV 2006-0206

DEPARTMENT A

O P I N I O N

APPEAL FROM THE SUPERIOR COURT OF PIMA COUNTY

Cause No. C20046106

Honorable Deborah Bernini, Judge

AFFIRMED IN PART,

REVERSED IN PART, AND REMANDED JUL 13 2007 

### FILED BY CLERK

COURT OF APPEALS

DIVISION TWO2

Sacks Tierney P.A.

By Marvin S. Cohen

DeConcini McDonald Yetwin & Lacy P.C.

By Spencer A. Smith and Lisa Anne Smith Scottsdale

Attorneys for Plaintiffs/Appellants

Tucson

Attorneys for Defendants/Appellees

H O W A R D, Presiding Judge.

¶1 Appellants Robson Ranch Quail Creek, LLC, and Lawyers Title of Arizona,

Inc. (collectively, “Robson”), challenge the trial court’s grant of summary judgment in favor

of appellee Pima County and various officials thereof. Robson argues Pima County’s sewer

connect ion fee ordinance, as amended in 2005, is subject to the reasonable relationship

requirement of A.R.S. § 11-821, is unreasonable and discriminatory, and unconstitutionally

impairs a 1998 contract between Robson and Pima County. We affirm the trial court’s grant

of summary judgment on the impairment of contract claim. But, finding the reasonable

relationship requirement of § 11-821 applies, and finding a genuine issue of material fact

exists regarding whether the fee reasonably relates to the burden imposed on Pima County

by Robson’s development, we reverse in part and remand the case.

Background

¶2 When reviewing a trial court’s grant of summary judgmen t, we view the

evidence and reasonable inferences f rom it in the light most favorable to the nonmoving

party. L ink v. Pima County , 193 Ariz. 336, ¶ 12, 972 P.2d 669, 673 (App. 1998). Pima

County charges fees for connec tion to its sewerage system. S ee Pima County Code3

§§ 13.20.040 and 13.20.045. The County assesses the connection fee per “fixture unit

equivalent.” § 13.20.045(A)(1). Prior to amendment in 2005, the rate structure was two

tiered. When an applicant or prior property owner constructed qualifying sewer

improvements, the County assessed a discounted, “participating” rate. For all other units,

it assessed a higher, “nonparticipa ting” rate. Each rate was a flat fee per fixture unit

equivalent; thus, the discount for participating applicants was not based on the amount

actually spent constructing sewer improvements.

¶3 In December 2005 , the County amended § 13.20.045 and eliminated the

words “participating” and “nonparticipating” in the fee ordinance. S ee Pima County

Ordinance No. 2005-112 (“the 2005 ordinance”). Instead, there is now a flat fee per fixture

unit equivalent for all residential a pplicants. § 13.20.045(A)(1). The construction of a

qualifying sewer improvement e ntitles the applicant to a discount on connection fees. §

13.20.045(B)(1). But, unlike under the prior system, the discount is tied to the actual cost

of construction. “Once the aggregate connection fee discounts received for an area under

development exceed the net construction cost of the qualifying public sewer conveyance

improvement . . . , no further connections within the area under development shall receive

connection fee discounts based on the construction of that qualifying pub l ic sewer

improvement.” § 13.20.045(B)(2).

¶4 Robson is the current developer of Quail Creek Resort Community in

Sahuarita. The County adopted a specific plan in 1989 entitling Emerald Homes, then the

developer of Quail Creek, to construct up to 5,000 homes on the specif ic plan property.4

Pursuant to a 1989 agreement, Emerald Homes constructed an off-site sewerage system to

serve Quail Creek. It also developed a portion of the specific plan property.

¶5 In 1997, Saddlec reek Enterprises, LLC, acquired the Quail Creek property

and, in 1998, entered in to an agreement with the County (“the 1998 agreement”) to

construct “an extension of the public sewerage system.” The parties agree that, as a

successor in interest to Saddlecreek, Robson is now a party to this agreement.

¶6 In 1999, Robson acquired the portion of the specific plan property that had

not yet been sold to third parties, and before August 2000, it also acquired adjacent property

that was not part of the 1989 specific plan . Sahuarita annexed both the specific plan

property and the adjacent property after entering into a development and pre-annexation

agreement with Robson. Sahuarita adopted an amended specific plan in October 2000

spreading development of Quail Creek over the original specific plan property and some of

the adjacent property without increasing the limit of 5,000 homes included in the original

specific plan.

¶7 For Robson to de velop the property that was not part of the 1989 specific

plan, the County required it to enter into sewer service agreements characterizing the lots

on that property as nonparticipating for purposes of sewer connection fees. Believing these

lots should have been participating, Robson sued the County in November 2004, claiming

that applying the nonparticipating rate was contrary to Arizo na statutes and1 In a footnote in its opening brief, Robson argues that some of its claims for refund

of payments made at the nonparticipating rate are not barred by the statute of limitations,

as the trial court had ruled they had been, and “sho uld be reinstated” if we find that the

reasonable relationship test in A.R.S. § 11-821 applies. But Robson’s arguments on appeal

concern only the trial court’s rulings with respect to the 2005 ordinance. Accordingly, we

do not address the trial court’s other rulings.

5 unconstitutional. The trial court granted the County summary judgment on these claims, and

Robson does not challenge those rulings on appeal. 1

¶8 Prior to those rulings, the County had passed the 2005 ordinance amending

§ 13.20.045. Also prior to those rulings, and based on a stipulation of the parties, Robson

filed an amended complaint, adding challenges to the 2005 ordinance. Robson alleged that

the 2005 ordinance violated state law and unconstitutionally impaired the contractual

relationship established in t he 1998 agreement. The County again moved for summary

judgment, which the trial court granted. After the court entered final judgment in favor of

the County, Robson appealed.

Applicability of A.R.S. § 11-821

¶9 Robson argues the trial court erred by concluding A.R.S. § 11-821 does not

require sewer connection fees imposed on developers to “bear a reasonable relationship to

the burden imposed on the county.” § 11-821(D)(4)(b). We review this issue de novo. S ee

Stein v. Sonus USA, Inc.

, 214 Ariz. 200, ¶ 3, 150 P.3d 773, 774 (App. 2007) (applicability

of statute reviewed de novo); Bothell v. Two Point Acres, Inc.

, 192 Ariz. 313, ¶ 8, 965 P.2d

47, 50 (App. 1998) (propriety of summary judgment reviewed de novo).6

¶10 The parties dispute the standard by which the validity of the ordinance must

be measured. Robson argues § 11-821 requires the fees to bear a reasonable relationship

to the burden imposed on the County by the particular development. The County, on the

other hand, argues that, instead of applying the reasonable relationsh ip requirement, we

must uphold the 2005 ordinance unless it is arbitrary or not rationally related to a legitimate

public interest. See Home Builders Ass’n of Cent. Ariz. v. City of Scottsdale , 187 Ariz.

479, 482, 930 P.2d 993, 996 (1997) (municipality’s ge nerally applicable land use

regulations are legislative decisions and will be upheld unless “arbitrary and without a

rational relation to a legitimate state interest”). But an ordinance that conflicts with a statute

is invalid. See id. (analyzing ordinance to determine “whether the fee conferred a benefit

as required by the statute”); City of Casa Grande v. Ariz. Water Co. , 199 Ariz. 547, ¶ 9,

20 P.3d 590, 593 (App. 2001) (ordinanc e that conflicts with statute is invalid).

Accordingly, we analyze whether the 2005 ordinance complies with § 11-821.

¶11 The legislature added the relevant portions of § 11-821 in 1998 as part of the

Growing Smarter Act. 1998 Ariz. Sess. Laws, ch. 204, § 7. Section 11-821(D) requires a

county’s comprehensive long-term plan to include, among other things:

4. A cost of devel opment element that identifies

policies a nd strategies that the county will use to require

development to pay its fair share toward the cost of additional

public facility needs generated by new development, with

appropriate exceptions when in the pub lic interest. This

element shall include:

(a) A component that identifies various m echanisms

that are allowed by law and that can be used to fund and

finance additional public services necessary to serve the7 development, includ ing bonding, special taxing districts,

development fees, in lieu fees and facility const ruction,

dedications and privatization.

(b) A component that identifies policies to ensure that

any mechani sms that are adopted by the county under this

element result in a beneficial use to the develo pment, b ear a

reasonable relationship to the burden imposed on the county

to provide additional necessary public faciliti e s to the

development and otherwise are imposed according to law.

(Emphases added.)

¶12 “The primary goal of statutory construction is to give effect to the intent of the

legislature.” C ornman Tweedy 560, LLC v. City of Casa Grande

, 213 Ariz. 1, ¶ 8, 137 P.3d

309, 311 (App. 2006). We begin with the plain language of the statutes; if the language is

clear and unambiguous, we need not resort to other metho ds of statutory construction.

Wells Fargo Credit Corp. v. Tolliver

, 183 Ariz. 343, 3 4 5, 903 P.2d 1101, 1103 (App.

1995). But, if the statutory language is ambiguous, “we look to the ‘rules of statutory

construction.’” Stein

, 214 Ariz. 200, ¶ 3, 150 P.3d at 774, quoting Lewis v. Ariz. Dep’t of

Econ. Sec

., 186 Ariz. 610, 614, 925 P.2d 751, 755 (App. 1996). And, in the case of

statutory ambiguity, we also “consider the statute’s context; its language, subject matter, and

historical background; its effects and consequences; and its spirit and purpose.” Hayes v.

Cont’l Ins. Co. , 178 Ariz. 264, 268, 872 P.2d 668, 672 (1994).

¶13 The plain language of § 11- 821(D)(4)(b) requires a county to “identif[y]

policies to ensure that any mechanisms that are adopted by the county under this element

. . . bear a reasonable relationship to the burden imposed on the county to provide additional

necessary public facilities to the development.” Although the statute does not specifically8

list sewer connection fees as one of the mechanisms under the statute, the County admits it

had identified sewer connection fees as a funding mechanism in its comprehensive plan.

And the sewe r connection fees “fund and finance additional public services necessary to

serve the development,” brin ging them within the language of the statute. § 11-

821(D)(4)(a). Therefore, by its plain language, § 11-821 applies to those fees.

¶14 The County argues that, because it assessed sewer connection fe es under

A.R.S. § 11-264 before the legislature added the relevant language to § 11-82 1, the fees

were not “adopted” under that latter statu te and are thus not subject to it. Section 11-

264(A) permits a county to “operate a sewage system . . . and charge fees and levy taxes

therefor.”

¶15 But § 11-821 is not a fee-authorizing statute. S ee § 11-821(H )(1) (“This

section do es not authorize . . . [t]he imposition of dedications, exactions, fees or other

requirements that are not otherwise authorized by law.”). Instead, it requires a county to

identify certain funding “mechanisms that are allowed by law.” § 11-821(D)(4)(a). Sewer

connection fees are “mechanisms that are allowed by law,” id ., specifically, § 11-264(A).

Although the County has long assessed sewer connection fees, it now has properly

“adopted” them as a funding mechanism, making them subject to the requirements of § 11-

821(D)(4).

¶16 The County next argues that § 11-821 requires no more than the development

o f “a plan that includes various elements to plan for growth” and that, by develop ing “a

strategy to assure that the fees are reasonably related to the County’s need to provide9

services to support development in the County,” it has complied wit h § 11-821, without

regard to whether the plan is effective. But the statutory language shows that the legislature

intended funding mechanisms adopted under § 11-821(D)(4) to be reasonably related to the

burden imposed on counties by the development. If the County’s strategy to “ensure” a

reasonable relationship were not required to actually result in a reasonable relationship, §

11-821( D)(4)(b), the statutory requirement would be meaningless. S ee Associated Aviation

Underwriters v. Wood

, 209 Ariz. 137, ¶ 141, 98 P.3d 572, 613 (App. 2004) (“In construing

statutes, ‘courts should give meaning to all the language used in a statute and avoid an

interpretati on that renders a term either duplicative or meaningless.’”), q uoting Phoenix

Newspapers, Inc. v. Superior Court

, 180 Ariz. 159, 162, 882 P.2d 1285, 1288 (App. 1993).

¶17 Even if the statute were deemed ambiguous, the legislative h istory of the

Growing Smarter Act and the statutory context support our interpretation that § 11-821’s

effect is not limited to planning. The relevant provisions of § 11-821 were added in 1998

by the Senate Appropriations Committee. S enate Comm. on Appropriations Amendments

to HB 2361 , 43d Leg., 2d Reg. Sess. (Ariz. Apr. 23, 1998). A memorandum prepared for

the full Senate after the Appropriations Committee adopted that amendment stated that the

bill would “[r]equire[] that any financing and fee mechanisms . . . bear a reasonable

relationship to the burden imposed on the municipali ty and are otherwise currently

authorized by law.” Memorandum from Ariz. Senate Research Staff to Members of the

Senate (Apr. 23, 1998). The final Senate Fact Sheet for HB 2361 included the identical

language, except that it referred to counties as well as municipalities. S enate Fact Sheet for10

HB 2361

, 43d Leg., 2d Reg. Sess. (Ariz. June 4, 1998); cf. State ex rel. Ariz. Dep’t of

Revenue v. Capitol Castings, Inc.

, 207 Ariz. 445, ¶ 19, 88 P.3d 159, 163 (2004) (citing

Senate Fact Sheet). Both of these statements support Robson’s position that § 11-

821(D)(4)(b) imposes a reasonable relationship requirement and requires more than a plan.

¶18 Furthermore, we must read § 11-821 together with other statutes on the same

subject matter “to determine legislative intent and to maintain harmony.” G oulder v. Ariz.

Dep’t of Transp.

, 177 Ariz. 414, 416, 868 P.2d 997, 999 (App. 1993), aff’d

, 179 Ariz. 181,

877 P.2d 280 (1994). Both § 11-821 and A.R.S. § 9-461.05, its municipal analogue, were

adopted as part of the Growing Smarter Act in 1998. 1998 Ariz. Sess. Laws, ch. 204, §§ 2,

7. Section 9-461.05(D)(4)(b) mirrors § 11-821(D)(4)(b), requiring the general plan for

certain municipalities to have a “cost of development element” that includes “[a] component

that identifies policies to ensure that any mechanisms that are adopted by the municipality

under this element

. . . bea r a reasonable relationship to the burden imposed on the

municipality to provide additional necessary public services to the development.”

¶19 The county and municipal development fee statutes contain similar

requirements. In 2000, as part of the Growing Smarter Plus Act, the legislature repealed the

prior county development fee statute and enacted A.R.S. § 11-1102 in its place. 2000 Ariz.

Sess. Laws 4th Spec . Sess., ch. 1, §§ 19-20. Section 11-1102(B)(4) requires that “[t]he

amount of any development fees must bear a reasonable relationship to the burden of capital

costs imposed on the county to provide additional necessary public services to the11

development.” It requires a reasonable relationship, not merely a plan to ensure such a

relationship. This language is very similar to that of A.R.S. § 9-463.05, which our supreme

court interpreted in Home Builders as requiring that municipal development fees actually

bear a reasonable relationship to the burden imposed on the municipality by the developer.

187 Ariz. at 483, 930 P.2d at 997. By including the “reasonable relationship” language in

all these statutes, the legislature demonstrated its intent that, when a municipality or county

charges a fee of a developer under these statutes, that fee must in fact reasonably relate to

the burden the development imposes on the municipality or county . Thus, the statutory

context provides further support for the conclusion that the reasonable relationship test, and

not just a planning requirement, applies to the sewer connection fees in this case.

¶20 Based on the statute’s express mandate, we hold that, where a county adopts

a funding mechanism identified under § 11-821(D)(4), that mechanism must “bear a

reasonable relationship to the burden imposed on the county to provide additional necessary

public facilities to the development.” Because the County’s sewer connection fees are a

funding mechanism under this statute, the fees are subject to the reasonable relationship

requirement.

¶21 The parties dispute whether the statute requires that the fees reasonably relate

to the burden on the County in providi ng services to Quail Creek specifically or to

development in general. The County contends that the reference in § 11-821(D)(4) to

“policies and strategies that the county will use to require development to pay its fair share

toward the cost of additional public facility needs generated by new development” means12

the fees must only reasonably relate to the burden imposed by development in general. But

the relevant portion of the statute sp ecifically requires that “any mechanisms that are

adopted by the county under this element . . . bear a reasonable relationship to the burden

imposed on the county to provide additional necessary public facilities to the development .”

§ 11-821(D)(4)(b) (emphasis added). Thus, the statute’s plain language supports Robson’s

position that any mechanism adopted under the statute must reasonably relate to the burden

imposed by the particular development.

¶22 Furthermore, the supreme court in Home Builders

, interpreting the municipal

development fee statute, stated: “[Section] 9-463.05 requires that the fee result in a benefit

to the developer

. ” 187 Ariz. at 483, 930 P.2d at 997 (emphasis added). The court also

stated, in discussing the test the legislature had adopted:

That standard requires first that the exaction imp o sed on the

developer be factually related to the need for public services

created by the proposed development. Second, the nature and

extent of the exaction must bear a reasonable relationship to

that portion of

the public burden c reated by the proposed

development.

Id. (emphases added). Based on the plain language of § 11-821(D)(4)(b) and the supreme

court’s interpretation of a statute with similar language in Home Builders

, we conclude that

§ 11-821(D)(4)(b) requires a reasonable relationship to the burden imposed on the County

by the particular development.

¶23 We address now whether Robson presented sufficient evide nce to raise a

genuine issue of material fact regarding the reasonable relationship of the sewer connection

fees to the burden im

posed on the County by Quail Creek. Summary judgment is only13

appropriate where “there is no genuine issue as to any material fact and

. . . the moving party

is entitled to a judgment as a matter of law.” Ariz. R. Civ. P. 56(c)(1), 16 A.R.S., Pt. 2. A

trial court should only grant a summary judgment motion “if the facts produced in support

of the claim

. . . have so little probative value, given the quantum of evidence required, that

reasonable people could not agree with the conclusion advanced by the proponent of the

claim.” Orme Sch. v. Reeves , 166 Ariz. 301, 309, 802 P.2d 1000, 1008 (1990).

¶24 We conclude Robson presented sufficient evidence to raise a genuine issue of

material fact concerning the sewer connection fees. It presented an audit of Pima County

Wastewater Management stating that revenue paid to offset the costs of added capacity was

being used to service debt attributa ble to user costs, not costs of new development.

Robson’s expert avowed, based on the audit, a 2005 study adopted by the County, and other

information, that total revenue from sewer connection fees over the next ten years would

exceed growth-related costs by between $246 million and $345 million. If true, reasonable

people could find that revenue from sewer connection fees has been substantially more than

necessary to offset deve lopment costs and that it has in fact been used to subsidize user

costs. And if, in general, the revenue from connection fees exceeds growth-related costs, a

jury could conclude that the revenue from connection fees for Quail Creek exceeds Quail

Creek’s impact. Additionally, Robson showed that its predecessor constructed sewer

infrastructure to serve Quail Creek, which would allow reasonable people to conclude that

the revenue from connection fees paid by Robson would exceed the amount necessary to

offset connection-related costs attributable to Quail Creek. Thus, we remand the case for2 Because we conclude that the requirements of § 11-821 apply to sewer connection

fees in this case, we do not address Robson’s argume nt that the common law imposes a

standard of reasonableness and nondiscrimination and that the fees violate that standard.

See Jung v. City of Phoenix , 160 Ariz. 38, 40-41, 770 P.2d 342, 344-45 (1989)

(municipality’s fees for water service to nonresidents must be reasonable, and discrimination

in rates mu st have reasonable basis). That standard is less stringent than the statutory

standard, which requires a reasonable relationship to the bu rden of providing additional

necessary facilities to the development.

14 a determination of whether the fee bears a reasonable relationship to the burden imposed

on the County by Quail Creek.

¶25 Although we remand this case, we note that the 2005 ordinance, as a

legislative decision, is entitled to deference. The basis for it “must stand unless shown to be

without factual support.” Home Builders , 187 Ariz. at 482, 930 P.2d at 996. Moreover,

§ 11-821(D)(4)(b) requires only a reasonable relationship, not an exact fit. As noted above,

however, Robson presented evidence, based on a fee study adopted by the County, that the

revenue from connection fees will substantially exceed the money the County needs to offset

the burden caused by Quail Creek. Thus, a genuine issue of material fact exists and

summary judgment was inappropriate. 2

Impairment of Contract

¶26 Robson next argues the 2005 ordinance unconstitutionally deprived it of the

benefit of the 1998 agreement because Robson is no longer entitled to the “participating”

rate and it now has to pay higher fees. We review this issue de novo. S ee In re Estate of

Dobert

, 192 Ariz. 248, ¶ 18, 963 P.2d 327, 331 (App. 1998) (reviewing contract clause15

challenge to statute de novo); Bothell v. Two Point Acres, Inc.

, 192 Ariz. 313, ¶ 8, 965 P.2d

47, 50 (App. 1998) (propriety of summary judgment reviewed de novo).

¶27 The Contract Clause of the United States Constitution prohibits states from

passing laws impairing the obligation of contracts. U.S. Const. art. I, § 10; see also Ariz.

Const. art. II, § 25. When analyzing a challenge to a law based on the Contract Clause, we

ask whether the law substantia lly impairs a contractual relationship. E nergy Reserves

Group, Inc. v. Kan. Power & Light Co. , 459 U.S. 400, 411, 103 S. Ct. 697, 704 (1983);

McClead v. Pima County

, 174 Ariz. 348, 359, 849 P.2d 1378, 1389 (App. 1992). If the law

“constitutes a substantial impairment, the State, in justification, must have a significant and

legitimate public purpose behind the regulation.” E nergy Reserves Group

, 459 U.S. at 411,

103 S. Ct. at 704; see also Phelps Dodge Corp. v. Ariz. Elec. Power Coop., Inc.

, 207 Ariz.

95, ¶ 101, 83 P.3d 573, 597 (App. 2004).

¶28 “[A] contract is impaired when a party is deprived of the benefit of his contract

by a law.” T

ower Plaza Invs. Ltd. v. DeWit t , 109 Ariz. 248, 252, 508 P.2d 324, 328

(1973). But, although “[t]otal destruction of contractual expectations is not necessary for

a finding of substanti al impairment, . . . state regulation that restricts a party to gains it

reasonably expected from the contract does not necessarily c onstitute a substantial

impairment.” E nergy Reserves Group

, 459 U.S. at 411, 103 S. Ct. at 704 (citation omitted).

“[T]he reasonable expectations of the complaining party to the contract play an ‘important

role’ in deciding whether a law substantially impairs that contract.” Baker v. Ariz. Dep’t16

of Revenue

, 209 Ariz. 561, ¶ 17, 105 P.3d 1180, 1185 (App. 2005), quoting Es t ate of

Dobert , 192 Ariz. at 253, 963 P.2d at 332.

¶29 The 1998 agreement provides, in relevant part:

5.1 Applicant shall pay all fees as prov ided for in Pima

County Ordinance No. 1996-18, as amended, and all other

applicable fee ordinances in effect at the time of application for

sewer service. . . .

5.2 This development is Particip a ting for purposes of

connection fee assessment.

Robson contends the 2005 ordinance “destroy[ed] the long-term connection fee structure”

because it eli minated the participating class of applicant. It argues this substantially

impaired the contractual relationship because the prior structure ensured t hat “[t]he fee

agreed to at the time was specifically tied to the cost of providing new treatment capacity.”

¶30 Under the 1998 agreement, Robson reasonably could have expected to receive

a discounted connection fee based on its construction of sewer improvements. But the

agre ement did not provide a specific discounted rate; rather, it contemplated that the

connection fee ordinance could be amended, as it was in 2005. Additionally, the contract

provided tha t the fee assessed would be based on “all other applicable fee ordinances in

effect at the time of application for sewer service.” Robson concedes the parties

contemplated that the fee might increase.

¶31 The 2005 ordinance provides a discounted rate based on the actual cost

incurred in constructing qualifying sewer improvements. Although the 2005 ordinance

eliminated the two-tiered, participating/nonparticipating system, it still provides a discount17

for applicants who construct qualifying sewer improvements. Because the agreement

provided that the fee would be based on the original ordinance, as amended, and on other

fee ordinances, which are subject to change, Robson could not have reasonably expected

that the method of calculating the discount would necessarily stay the same. See Smith v.

City of Phoenix

, 175 Ariz. 509, 514, 858 P.2d 654, 659 (App. 1992) (agreement providing

that municipal judge’s salary was established by ordinance did not “objectively manifest[]

assent of the parties that the method of calculating his salary would remain fixed throughout

his term”).

¶32 Although Robson makes much of the use of the word “participating” in the

1998 agreement, Pima County Code § 13.20.045(B)(5) provides that, where a pre-existing

agreement provided for a particular lot to be “participating,” that lot now receives a discount

under § 13.20.045(B). Thus, although the “participating” terminology no longer exists, the

discount does.

¶33 R obson contends the fee structure prior to the 2005 ordinance provided

applicants not merely a discount, but an incentive, by providing discounts that exceeded the

cost of constructing qualifying sewer improvements. But the 1998 agreement did not state

or imply that one of its goals was to provide the developer an incentive. And neither the

agreement nor the prior connection fee structure expressly provided that the discount would

always exceed the cost of construction. Because the agreement provided that connection

fees would be subject to t he ordinance as amended, we cannot conclude that the parties

contemplated the discount would continue to exceed the cost of construction.18

¶34 Robson also argues that the use of the wor d “participating” in the 1998

agreement shows the parties agreed that the County would use the revenue from sewer

connection fees to offset the “cost of providing new treatment capacity.” But nothing in the

1998 agreement bound the County to use the fee revenue for a particular purpose. Instead,

the agreement set forth the obligations of the parties to each other. S ee Tower Plaza Invs.

Ltd. , 109 Ariz. at 252, 508 P.2d at 328 (“The obligation of a contract is defined as the law

or duty which binds the parties to perform their agreements.”). Thus, although we have

concluded that the sewer connection fees must reasonably relate to the burden imposed on

the County by the particular development, as A.R.S. § 11-821(D)(4)(b) requires, we do not

conclude that the 1998 agreement gave rise to any expectations regarding how the County

would use the fee revenue.

¶35 Under the 1998 agreement, Robson could not have reasonably expected a

particular discount nor that the County would use the fee revenue in a particular way.

Alth ough the 2005 ordinance changed the calculation of the discount, it still provides

applicants a discount for constructing qualifying se wer improvements. Accordingly, the

2005 ordinance did not substantially impair Robson’s rights under the 1998 contract. S ee

Tower Plaza Invs. Ltd.

, 109 Ariz. at 252, 508 P.2d at 328. Because the ordinance did not

uncons titutionally impair Robson’s rights, we need not address whether any impairment

would be justified by a valid exercise of the County’s police power.

Disposition19

¶36 For the foregoing reasons, we reverse the trial court’s grant of summary

judgment on Robson’s claims for declaratory and monetary relief under the 2005 ordinance

based on the reasonable relationship requirement in § 11-821(D)(4)(b). We affirm the

court’s gran t of summary judgment in favor of Pima County on Robson’s impairment of

contract claim. We remand the case for further proceedings consistent with this decision.

Because the County is no longer the successful party in this action, we vacate the award of

attorney fees in its favor.

____________________________________ JOSEPH W. HOWARD, Presiding Judge

CONCURRING:

____________________________________ JOHN PELANDER, Chief Judge

____________________________________ GARYE L. VÁSQUEZ, Judge