Opinion ID: 1831572
Heading Depth: 2
Heading Rank: 1

Heading: User Fee or Special Assessment?

Text: DOT does not argue that the stormwater fees constitute a tax. Therefore, in determining the validity of the bonds, we must decide whether the City's stormwater fee constitutes a user fee or a special assessment. If the stormwater fee is a user fee, the fee is valid and the State and DOT, as beneficiaries of the system, can be charged. If the fee is a special assessment, however, the State and DOT cannot be assessed the fee absent statutory authorization. See City of Gainesville, 778 So.2d at 521-22 (noting that state agencies may not be charged special assessments absent a statute specially authorizing special assessments on state property) (quoting Blake v. City of Tampa, 115 Fla. 348, 156 So. 97, 99 (1934)). We acknowledge that under the authorizing statute a municipality may fund its stormwater management system either through the use of user fees or through special assessments. See generally § 403.0893, Fla. Stat. (2002). However, when a municipality chooses to fund its stormwater management system through special assessments, it does so pursuant to section 403.0893(3) and therefore does not technically establish a stormwater utility. Compare § 403.0893(1) (authorizing the creation of a stormwater utility and the imposition of stormwater utility fees), with § 403.0893(3) (authorizing special assessments to fund a stormwater management system). Although section 403.0893(3), Florida Statutes, authorizes special assessments, the City has not followed the required procedures under that section. Rather, the City has established a stormwater utility under section 403.0893(1) and has imposed utility fees. Therefore, the stormwater fees are only legal if they constitute user fees. We have previously recognized that user fees and special assessments are similar. See Collier County v. State, 733 So.2d 1012, 1018-19 (Fla.1999). We have defined user fees as charges based upon the proprietary right of the governing body permitting the use of the instrumentality involved. Such fees share common traits that distinguish them from taxes: they are charged in exchange for a particular governmental service which benefits the party paying the fee in a manner not shared by other members of society, and they are paid by choice, in that the party paying the fee has the option of not utilizing the governmental service and thereby avoiding the charge. City of Port Orange, 650 So.2d at 3 (citations omitted). Similarly, special assessments are charge[s] assessed against [the] property of some particular locality because that property derives some special benefit [from] the expenditure of [the] money. Workman Enters., Inc. v. Hernando County, 790 So.2d 598, 599 (Fla. 5th DCA 2001) (quoting Atlantic Coast Line R.R. Co. v. City of Gainesville, 83 Fla. 275, 91 So. 118, 121 (1922)). As the First District noted in the related case, [t]he boundary between special assessments and user fees is not always clear. City of Gainesville, 778 So.2d at 526. One leading authority has explained the difference between user fees and special assessments as follows: In determining whether a charge for connecting property with the municipal water service is a fee or an assessment, the name given to the charge is not controlling; it is the reason for the charge which controls its nature, and if it is a charge made for the improvement of a certain piece of property, it is an assessment. Similarly, charges for connection to or the use of a sewer generally are not deemed taxes. There is no bright-line test for distinguishing between a connection/use fee and a special assessment; generally, a fee is exchanged for a service rendered or a benefit conferred, and some reasonable relationship exists between the amount of the fee and the value of the service or benefit, while a special assessment is a specific levy designed to recover the costs of improvements that confer local and peculiar benefits upon property within a defined area. User fees are those which are charged only to the person actually using the service, and the amount of the charge generally is related to the actual goods or services provided and is a monthly charge rather than a one-time charge. 70C Am.Jur.2d, Special or Local Assessments § 2, at 631-32 (2000) (footnotes omitted), quoted in City of Gainesville, 778 So.2d at 526. We therefore consider various factors in determining whether the stormwater fees in this case constitute a user fee or a special assessment. These include: the name given to the charge; the relationship between the amount of the fee and the value of the service or benefit; whether the fee is charged only to users of the service or is charged to all residents of a given area; whether the fee is voluntary that is, whether a property owner may avoid the fee by refusing the service; whether the fee is a monthly charge or a one-time charge; whether the fee is charged to recover the costs of improvements to a defined area or infrastructure or for the routine provision of a service; whether the fee is for a traditional utility service; and whether the fee is statutorily authorized as a fee. None of these factors is controlling; nor are they necessarily exclusive. Rather, we must consider each factor in light of the circumstances as a whole in each particular case. In this case, considering all the circumstances, we conclude that the stormwater fees constitute a user fee, not a special assessment. The City itself calls the fee a user fee, which is not dispositive but is relevant. Moreover, the City charges the fees on a monthly basis, not as a one-time charge. The City's creation of a stormwater utility, as the statute authorized, is a strong factor militating in favor of finding the stormwater fees a user fee. The City establish[ed] stormwater management as a city utility enterprise in accordance with F.S. § 403.0893 and establish[ed] a program of user charges for stormwater management service to be charged to all developed property within the city that contributes stormwater runoff to the city's stormwater management systems to accomplish the functions of such utility. Gainesville, Fla., Code art. V, § 27-236. We have previously recognized that the creation of a statutorily-authorized utility strongly favors the validity of the fees imposed. In Pinellas County v. State, 776 So.2d 262, 268 (Fla.2001) (footnote omitted), we noted that where a governmental entity provides access to traditional utility services, this Court has not hesitated to uphold local ordinances imposing mandatory fees, regardless of whether the individual customer actually uses or desires the service. In a footnote, we cited stormwater management programs defined under section 403.031(17), Florida Statutes (1997) as one category of many statutorily-authorized programs imposing mandatory fees to recoup the costs of providing water service. Id. at 268 n. 11. In another footnote, we noted that water systems are equivalent to traditional utilities such as sewer systems. Id. at 268 n. 10. Also, in City of Port Orange, 650 So.2d at 4, we distinguished a transportation utility fee that we held to be a tax from stormwater utility fees, noting that storm-water utility fees are expressly authorized by section 403.031, Florida Statutes (1993). See also City of Dunedin v. Contractors & Builders Ass'n, 312 So.2d 763, 766 (Fla. 2d DCA 1975) (The imposition of fees for the use of a municipal utility system is not an exercise of the taxing power nor is it the levy of a special assessment.) (citing State v. City of Miami, 157 Fla. 726, 27 So.2d 118 (1946)), quashed on other grounds, 329 So.2d 314 (Fla.1976). Therefore, the fact that the City has created a statutorily-authorized utility to provide stormwater management services militates strongly in favor of finding that the stormwater fees are user fees. The State and DOT argue that the City's fee constitutes a special assessment because it is not voluntary. The evidence showed, however, that in most cases the fee is voluntary. The City requires only properties that actually use the system to pay the fee. Properties that are either undeveloped or implement ways to retain all stormwater on site are exempted. Therefore, property owners can avoid the fee either by not developing the property or by implementing a system to retain stormwater on site. See City of Gainesville, 778 So.2d at 525 (holding that [b]ecause a landowner can refuse the City's stormwater utility service and prevent liability for stormwater utility fees by containing runoff, the fees are neither a tax nor a special assessment). Nevertheless, the State and DOT argue that regarding apartment complexes in particular, because the City charges the fee to the tenants, not the owners, and because the tenants cannot avoid the fee, the fee is not voluntary as to those tenants. They rely on Port Orange, 650 So.2d at 3, in which we noted that [user fees] are paid by choice, in that the party paying the fee has the option of not utilizing the governmental service and thereby avoiding the charge. In this case, however, tenants may avoid the charge by choosing to live in multi-family dwellings that do not use the City's stormwater system. Even if we accept the proposition that tenants have no choice, although the voluntariness of the fee is one factor to consider, it is not dispositive. In Pinellas County, 776 So.2d at 268, we noted that we have upheld even mandatory fees for traditional utility services. A stormwater utility is similar to wastewater and sewer systems. Florida courts have upheld mandatory fees for such systems. See State v. City of Miami Springs, 245 So.2d 80 (Fla. 1971) (holding that a municipality may charge a mandatory fee for sewer service unrelated to actual use); Town of Redington Shores v. Redington Towers, Inc., 354 So.2d 942 (Fla. 2d DCA 1978) (holding that the subject sewer fee applied to unoccupied condominiums without regard to actual use); see also Stone v. Town of Mexico Beach, 348 So.2d 40 (Fla. 1st DCA 1977) (upholding a mandatory flat rate for garbage service, regardless of use); City of Riviera Beach v. Martinique 2 Owners Ass'n, 596 So.2d 1164 (Fla. 4th DCA 1992) (holding that the subject solid waste removal ordinance applied to unoccupied condominiums without regard to actual use). Therefore, where a statute authorizes a utility fee, such fees may be considered user fees even though mandatory. In Port Orange, we noted that the transportation utility fee at issue was not statutorily authorized and therefore was not analogous to stormwater utility fees or other utility fees authorized by statute. We did not suggest that utility fees will only be considered user fees if they are voluntary, only that, where not authorized by statute, a valid user fee involves an element of choice. Again, we emphasize that a court must consider all the circumstances together, and none in isolation, in determining whether a particular charge is a user fee or a special assessment.