Opinion ID: 2373639
Heading Depth: 3
Heading Rank: 3

Heading: Associates Failed to Meet its Burden

Text: ¶ 31 We next address whether the district court erred in holding that Associates met its burden of proving that the City's inspection fee was unconstitutional. The district court concluded that Associates met its burden because the City's procedure for enacting the inspection fee was unreasonable. But this was not the proper analysis. As discussed above, the party challenging a municipal fee bears the burden of demonstrating that the fee itself is unreasonable. City of N. Logan, 1999 UT 63, ¶ 8, 983 P.2d 561. In other words, the challenger must demonstrate that the fee is being used to raise revenue for general governmental purposes. See V-1 Oil Co., 942 P.2d at 911. There are two methods by which a challenger can meet this burden. First, it can establish that the fee was enacted for the purpose of raising revenues for the general fund. See Weber Basin Home Builders Ass'n v. Roy City, 26 Utah 2d 215, 487 P.2d 866, 867-68 (1971). Second, the challenger can demonstrate that the fee is unreasonable because it is disproportionate to the cost of the services rendered or to the government's costs of regulating and policing a business or activity. V-1 Oil Co., 942 P.2d at 911. ¶ 32 Here, the district court concluded that the City's inspection fee was enacted for a proper purpose. Specifically, it found that the civil inspection fee was enacted to compensate the City for the costs of conducting civil inspections. Associates does not challenge this finding. Therefore, to meet its burden, Associates must establish that the City's civil inspection fee is unreasonable. And because the fee is a regulatory fee, Associates must establish that the City's civil inspection revenues exceed its civil inspection expenses by an unreasonable amount. Associates failed to meet this burden. Although Associates presented evidence that the City's civil inspection revenues exceeded its costs, the district court found Associates' evidence unreliable and concluded that the City's inspection costs exceeded its revenues for the five-year period from July 1, 1998, to June 30, 2003. Associates did not present reliable evidence disputing the City's costs/revenue analysis, nor did it present evidence showing how application of a different fee would have led to a more reasonable result. Because Associates failed to show that the City's civil inspection fee was adopted for the purpose of subsidizing its general governmental expenses or that the revenues generated from the fee were excessive, Associates did not meet its burden. We therefore reverse the district court's ruling that the City's inspection fee is unconstitutional.