Opinion ID: 2293001
Heading Depth: 3
Heading Rank: 1

Heading: Whether the Assessment Raises Revenue or is for a Regulatory Purpose

Text: [¶ 13] The facts relevant to the first factor, whether the assessment raises revenue or is for a regulatory purpose, are not in dispute. The Utility's expenses are well documented by both the City and Gladu. Although there are disputes as to whether the assessment can pay for debt services, there is no genuine dispute over the amount of money the City collects and allocates to different expenditures. The lack of a dispute as to any material fact is further evidenced by Gladu's failure to provide proof that the debt the Utility acquired was not used to build or maintain stormwater infrastructure. [¶ 14] As the material facts are not in dispute, our inquiry turns to whether the facts, as they relate to this factor, weigh in favor of the assessment qualifying as a fee. Gladu argues that the purpose of the assessment is to raise revenue because forty-four percent of the Utility's budget goes toward debt services, including debts acquired by the City prior to the creation of the Utility. [¶ 15] Although we have never directly addressed whether fees can be used to cover capital improvements and infrastructure, at least one other jurisdiction has addressed this precise issue and upheld a stormwater fee. In Tukwila School District No. 406 v. City of Tukwila, the Washington Court of Appeals held that a stormwater fee met the regulatory-purpose requirement when it was enacted to provide . . . revenue to construct, reconstruct, replace, improve, operate, repair, maintain, manage, administer, inspect, enforce facilities and activities for the storm and surface water utility plan and to relieve a burden created by property owners whose impervious surfaces contribute directly to runoff and pollution problems. 140 Wash.App. 735, 167 P.3d 1167, 1172 (2007) (quotation marks omitted). The court recognized that, because property owners contributed to water quality problems through stormwater runoff from their properties, the city could charge a fee to help defray the costs of ameliorating the problem. Id. at 1173. The court also concluded that [t]he construction of capital facilities is a recognized regulatory activity. Id. [¶ 16] The fact that the Utility acquired stormwater infrastructure debt from the City does not change the fact that the Utility is using the assessment to cover the costs of regulating stormwater runoff, and part of those regulatory costs include maintaining stormwater infrastructure. Because all of the Utility's expenses are for maintaining or administering the Utility, this factor weighs in favor of concluding that the assessment is a fee and not a tax.