Court Opinion

ID: 4650103
Source: CourtListenerOpinion
Date Created: 2021-01-08 16:11:58.10263+00
Date Added: 2024-06-11T08:01:30.711430
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Alan Ziegler, Nicolas Bene, Lissette                  :
Chevalier, Jose Munoz, and Efrain                     :
Caban, Individually and on Behalf of                  :
all Similarly Situated Persons                        :
                                                      :
                    v.                                : No. 1777 C.D. 2019
                                                      : Argued: December 7, 2020
The City of Reading and Reading                       :
Area Water Authority                                  :
                                                      :
Appeal of: City of Reading                            :

BEFORE:         HONORABLE MARY HANNAH LEAVITT, President Judge1
                HONORABLE PATRICIA A. McCULLOUGH, Judge
                HONORABLE MICHAEL H. WOJCIK, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION
BY JUDGE WOJCIK                                                      FILED: January 8, 2021

                This case returns to us for the third time following our remand to the
Court of Common Pleas of Berks County (trial court) in the City of Reading v.
Ziegler, 216 A.3d 1192 (Pa. Cmwlth. 2019) (Ziegler II),2 for additional calculations
of the cost of City of Reading’s (City) recycling program to include leaf and yard
waste collection costs, prior years’ deficits, or anticipated program costs. In this
appeal, the City challenges the trial court’s November 6, 2019 order reentering

       1
         The decision in this case was reached before January 4, 2021, when Judge Leavitt served
as President Judge.

       2
           See also Ziegler v. City of Reading, 142 A.3d 119 (Pa. Cmwlth. 2016) (Ziegler I).
declaratory judgment in favor of Appellees (Residents)3 upon determining that the
City’s residential curbside recycling fee is inconsistent with the Municipal Waste
Planning, Recycling and Waste Reduction Act (Act 101).4 The City argues that the
trial court abused its discretion by not complying with this Court’s remand directive
and by considering the City’s accounting practices as evidence that the City’s
recycling fees violated Act 101. Upon review, we affirm.

                                         I. Background
                The protracted history of this case may be summarized as follows. The
City is a third-class city located in Berks County, operating under a home rule
charter.5 The Reading Area Water Authority (RAWA)6 is a municipal authority
created under the Municipality Authorities Act.7                  The City delegated the
responsibility for solid waste planning and plan implementation under Section
303(d) of Act 101, 53 P.S. §4000.303(d), to RAWA. Residents either reside in or
maintain a place of business in the City and have paid recycling fees to the City or
RAWA.
                Under Act 101, cities of the third class operating under a home rule
charter with populations over 10,000 are required to implement a recycling program.

       3
         The Residents are Alan Ziegler, Nicholas Bene, Lissette Chevalier, Jose Munoz, and
Efrain Caban, individually and on behalf of all similarly situated persons.

       4
           Act of July 28, 1988, P.L. 556, No. 101, as amended, 53 P.S. §§4000.101-4000.1904.

       5
         The City is also designated as financially distressed under the Municipalities Financial
Recovery Act, commonly referred to as Act 47, Act of July 10, 1987, P.L. 246, No. 47, as amended,
53 P.S. §§11701.101-11701.712.

       6
           RAWA is not participating in this appeal.

       7
           53 Pa. C.S. §§5601-5623.
                                                 2
Section 1501(a) of Act 101, 53 P.S. §4000.1501(a). Pursuant thereto, the City
enacted ordinances establishing its recycling program. In March 2014, the City
revised its recycling program by enacting Ordinances 20-2014 and 21-2014, which
are the subject of this litigation.
                Ordinance 20-2014 amended Chapter 496, Part 2 of the City’s Code of
Ordinances (Code), which pertains to the storage and collection of solid waste.
Specifically, Ordinance 20-2014 eliminated a separate recycling fee and instituted a
“Curbside Waste Collection Fee” (Curbside Fee) to cover the combined costs of
collecting municipal waste, recyclable materials, and organic waste. Ordinance 21-
2014 amended Chapter 212 of the City’s Code governing fees by setting the
Curbside Fee at $303.10 per property per year. Imbedded in the Curbside Fee is a
$91.83 user fee for recyclables (Recycling Fee). The Recycling Fee applies to
owners of residential properties with four or fewer units. Although owners are
permitted to opt out of the City’s curbside municipal waste service by securing the
services of a private hauler, they are not permitted to opt out of the City’s curbside
recycling service.
                In June 2014, Residents filed a three-count class action Complaint
against the City and RAWA, challenging the assessment and collection of a service
fee for curbside recycling. In Count I, Residents sought a declaratory judgment that
the Recycling Fee currently assessed and collected by the City is in violation of the
laws of the Commonwealth, namely, Act 101 and the Solid Waste Management Act
(SWMA).8 By joint request and agreement of the parties, the trial court considered
only Count I and deferred disposition of the other two counts.

       8
           Act of July 7, 1980, P.L. 380, as amended, 35 P.S. §§6018.101-6018.1003.
                                                3
              On December 5, 2014, the trial court ruled that the Recycling Fee was
permissible and entered an order granting judgment in favor of the City. The trial
court later amended its order to facilitate interlocutory appeal to this Court.
              On appeal, an en banc panel of this Court vacated the order and
remanded the matter to the trial court for further analysis consistent with our then-
recent decision in Waste Management of Pennsylvania, Inc. v. Department of
Environmental Protection, 107 A.3d 273 (Pa. Cmwlth. 2015), in which we held that
recycling fees are not per se prohibited, but the program costs are subject to scrutiny
to ensure that they are fiscally sound and in compliance with Act 101. See Ziegler
I, 142 A.3d at 139. In particular, we directed the trial court to consider whether the
City’s Recycling Fee will have a negative impact on the recycling program’s
financial self-sufficiency, as that term is used in Act 101, or a deleterious effect on
the efficiencies of the City’s recycling program. Id. The remand also contemplated
input on these questions from the Department of Environmental Protection (DEP).
Id. at 130.
              On remand, the trial court interpreted this Court’s opinion “to mean that
if the [R]ecycling [F]ee is permitted without limits, it will relieve the City of an
incentive to increase the program’s efficiency and pursue other appropriate sources
of funding.” Ziegler II, 216 A.3d at 1197 (citation omitted). “[W]hether recycling
fees violate state law depends upon the particular implementation and amount of
such fees because the ultimate financial self-sufficiency of the [recycling] program
and making sure the program is as efficient as it could be are . . . obvious purposes
of Act 101.” Id. (internal quotations and citation omitted). “If a recycling fee works
against those purposes, it is inconsistent with Act 101 and thus preempted.” Id.

                                           4
(internal quotations and citation omitted). The trial court then held additional
evidentiary hearings and considered the parties’ briefs and arguments. Id.
             Based on the evidence and arguments presented, the trial court found
that in the years 2014-2016, the Recycling Fees collected, standing alone, without
including grants or sales of recyclables, exceeded the total costs of the City’s
recycling program, and generated a surplus. Although the trial court noted that the
City’s program operated at a deficit in some years, it was unclear what efforts, if
any, the City made to operate the program efficiently. Ultimately, the trial court
concluded that the Recycling Fees the City imposed enabled it to operate its
recycling program without properly pursuing Act 101’s purposes of efficiency and
self-sufficiency. Thus, the trial court entered declaratory judgment in favor of
Residents on Count I of their Complaint. Ziegler II, 216 A.3d at 1197-1200.
             From the decision, the City appealed to this Court. The City argued,
inter alia, that the trial court disregarded credible evidence proving the City’s
compliance with Act 101. Specifically, the City challenged the trial court’s failure
to include leaf and yard waste, past deficits, and anticipated costs in the calculation
and analysis of the recycling program’s efficiency. We agreed with the City on this
particular point. We vacated and remanded for further calculations to permit the
inclusion of such costs in the calculations, but otherwise affirmed in all other
respects. Ziegler II, 216 A.3d at 1207.
             On remand, the trial court conducted evidentiary hearings. However,
the trial court noted that its efforts to address the issues on remand “were frustrated
by the lack of credible evidence from the City to support its claim that the recycling
program was run with sufficient fiscal efficiency to comply with Act 101.” Trial
Court Op., 11/6/19, at 2-3. The trial court continued that “[s]everal hearings were

                                          5
abbreviated or continued at the request of counsel for the City due to changes in City
personnel and difficulty obtaining information and locating records and documents
pertaining to recycling costs and measures taken to maximize the financial efficiency
of the recycling program.” Id. at 3. The trial court found that City’s witnesses
offered little knowledge or answers regarding the City’s leaf and yard waste, past
deficits, and anticipated costs. Id. at 3-4. Ultimately, the trial court concluded that
the City failed to present evidence to prove the efficiency of its recycling program
through credible, reliable testimony or evidence sufficient to satisfy Act 101 under
the Waste Management criteria. Id. at 4. The trial court continued: “There was no
credible evidence in this case that: 1) the recycling program’s expenses for the years
resulting in deficits; or 2) leaf and yard waste costs; or 3) $1.2 million for the new
containers, were fiscally sound expenditures, nor that the fees were set in
consideration of, or to cover these expenses.”              Id. at 5-6.    “Despite multiple
continuances to afford the City an opportunity to produce evidence to support its
position, no such credible evidence was presented.” Id. at 6. Thus, the trial court
reaffirmed the declaratory judgment previously entered in favor of the Residents that
the City’s Recycling Fee was contrary to Act 101. Id. at 6. This appeal follows.9

                                          II. Issues
              On appeal, the City argues that the trial court abused its discretion by
failing to comply with this Court’s remand directive to include the costs for leaf and
yard waste collection, prior years’ deficits, and anticipated program costs in the

       9
          Our review in a declaratory judgment action is limited to determining whether the trial
court’s findings are supported by substantial evidence, whether an error of law was committed, or
whether the trial court abused its discretion. Pennsylvania Independent Waste Haulers Association
v. Township of Lower Merion, 872 A.2d 224, 227 n.13 (Pa. Cmwlth. 2005).
                                               6
calculation of the self-sufficiency and efficiency of the City’s recycling program. In
addition, the City contends that the trial court abused its discretion by considering
the City’s accounting practices as evidence that the City’s Recycling Fees violated
Act 101.

                                  III. Discussion
                         A. Compliance with Remand Order
              The City argues that the trial court failed to make the required
calculations in violation of this Court’s remand decision and Pa. R.A.P. 2591.10 This
Court remanded the matter to the trial court to recalculate the cost of the City’s
recycling program by factoring in the cost of leaf and yard waste collection, past
years’ deficits, and anticipated program costs. Despite this Court’s clear directive,
the trial court failed to make the calculations it was directed to make. Instead, the
trial court rejected and admonished the City’s evidence. This Court did not invite
the trial court to provide an explanation as to why it did not believe the City’s
evidence. The trial court erroneously disregarded these costs in rendering its
decision. By failing to make the required calculations, the trial court abused its
discretion.
              As fact-finder, the trial court maintains exclusive province over matters
involving the credibility of witnesses and the weight afforded to the evidence. In re
Penn-Delco School District, 903 A.2d 600, 608 (Pa. Cmwlth. 2006), appeal denied,
921 A.2d 499 (Pa. 2007). The trial court “is free to believe all, part, or none of the
evidence presented,” and is likewise free “to make all of the credibility

       10
          Pa. R.A.P. 2591 states, in relevant part: “On remand of the record the court or other
government unit below shall proceed in accordance with the judgment or other order of the
appellate court . . . .”
                                              7
determinations, and to resolve conflicts in the evidence.” Boro Construction, Inc. v.
Ridley School District, 992 A.2d 208, 218 n.16 (Pa. Cmwlth. 2010). As a result, this
Court is prohibited from making contrary credibility determinations or reweighing
the evidence in order to reach an opposite result. Penn-Delco, 903 A.2d at 608. In
fact, we are bound by the findings of the trial court that have adequate support in the
record so long as the findings do not evidence capricious disregard of competent and
credible evidence. Leon E. Wintermyer, Inc. v. Workers’ Compensation Appeal
Board (Marlowe), 812 A.2d 478, 487 (Pa. 2002); Ziegler II, 216 A.3d at 1202-03.
             In Ziegler II, the City argued that the trial court abused its discretion by
capriciously disregarding evidence and arguments relating to the City’s Recycling
Fee and program costs, namely, costs associated with leaf and yard waste, past
deficits, and anticipated costs. We reiterated that “[t]he purpose of the Ziegler [I]
test is to determine the efficiency of the recycling program. The trial court found
that the [Recycling] [F]ees covered all costs of recycling and generated surpluses
and, thus, were contrary to Act 101.” Ziegler II, 216 A.3d at 1204. However, the
trial court’s calculations did not consider “key data regarding actual costs of the
program, such as leaf and yard waste collection costs, prior years’ deficits or
anticipated program costs.” Id. By disregarding such evidence, we determined that
“the trial court did not capture an accurate and complete picture of the program’s
efficiency.” Id. Thus, we vacated the trial court’s order and remanded for “proper
consideration of this evidence and further calculations that include the disregarded
data.” Id. (emphasis added).
             On remand, the trial court afforded the City the opportunity to present
evidence regarding the impact of the City’s leaf and yard waste collection costs, past
deficits, and anticipated costs on its recycling program costs. The trial court fully

                                           8
considered the evidence presented. However, the trial court determined that the
City’s evidence was not competent or credible and fell short of satisfying Act 101
under the Waste Management standard for efficiency. The trial court chronicled the
City’s delays and continuances, difficulty in locating records and documents
pertaining to recycling and efforts to maximize efficiency, witnesses who lacked
knowledge or answers regarding the same, and its general failure to present reliable
evidence to prove the efficiency of its recycling program. The City offered no
evidence specifying how it actually set the amount of user fees. “There was no
credible evidence in this case that: 1) the recycling program’s expenses for the years
resulting in deficits; or 2) leaf and yard waste costs; or 3) $1.2 million for the new
containers, were fiscally sound expenditures, nor that the fees were set in
consideration of, or to cover these expenses.” Trial Court Op., 11/6/19, at 5-6. The
trial court ultimately concluded that there was a “lack of credible evidence from the
City to support its claim that the recycling program was run with sufficient fiscal
efficiency to comply with Act 101.” Trial Court Op., 11/6/19, at 2.
             The trial court, as fact-finder, properly exercised its discretion over
evidentiary weight and credibility determinations. See Boro Construction, 992 A.2d
at 218 n.16. We are bound by the trial court’s credibility determinations. See Penn-
Delco, 903 A.2d at 608. There is no support for the City’s position that the trial
court was required to accept any evidence proffered by the City, without considering
its veracity or reliability, and apply it to the calculation. See Ziegler II. The City
had alleged that these costs, if proven, would justify its Recycling Fees. Id. The
trial court followed our remand order by providing the City an opportunity to present
evidence and by fully considering the same before reaching its determination.
Ultimately, the trial court determined that, despite numerous opportunities, the City

                                          9
failed to offer credible evidence regarding these other costs to justify its Recycling
Fees and defend the efficiency of its recycling program. We discern no abuse of
discretion in this regard.

               B. Consideration of the City’s Accounting Practices
             Next, the City contends that the trial court abused its discretion by
considering the City’s accounting practice of including certain costs, which were
unquestionably recycling costs, in the General Fund, rather than the recycling
enterprise fund when calculating the efficiency and self-sufficiency of the City’s
recycling program. This is nothing more than a red herring used by the trial court to
justify its failure to adhere to the directive of this Court’s remand order. “[T]his is
a declaratory judgment action, not an accounting exam.” Appellant’s Brief at 21.
Regardless of how the City accounted for its recycling costs, if the trial court factored
them into its calculation, it would not have found a surplus, and the burden would
have remained with the Residents, who failed to prove that the City’s fee was
actually inconsistent with Act 101.
             In particular, the City takes issue with the trial court’s statement:

             There was no credible evidence in this case that: 1) the
             recycling program’s expenses for the years resulting in
             deficits; or 2) leaf and yard waste costs; or 3) $1.2 million
             for the new containers, were fiscally sound expenditures,
             nor that the fees were set in consideration of, or to cover
             these expenses. In fact, the leaf and yard waste disposal
             costs, which should have properly been included as
             recycling expense, had actually been intentionally covered
             by property tax revenues so residents could realize a tax
             deduction.

Trial Court Op., 11/6/19, at 5-6.

                                           10
             Act 101 does not require the City to account for its costs in a particular
way. However, “[o]nce the Residents presented evidence tending to show that the
ordinances had a negative effect on the efficiency and self-sufficiency of the
recycling program, it was up to the City to rebut this evidence.” Ziegler II, 216 A.3d
at 1202. Despite multiple opportunities, the City simply failed to offer credible
evidence that costs related to recycling and accounted for elsewhere in the budget
were legitimately covered by its Recycling Fee or were otherwise factored into the
program’s efficiencies.

                                  IV. Conclusion
             Accordingly, we affirm.

                                       MICHAEL H. WOJCIK, Judge

                                         11
         IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Alan Ziegler, Nicolas Bene, Lissette        :
Chevalier, Jose Munoz, and Efrain           :
Caban, Individually and on Behalf of        :
all Similarly Situated Persons              :
                                            :
               v.                           : No. 1777 C.D. 2019
                                            :
The City of Reading and Reading             :
Area Water Authority                        :
                                            :
Appeal of: City of Reading                  :

                                  ORDER

            AND NOW, this 8th day of January, 2021, the order of the Court of
Common Pleas of Berks County, dated November 6, 2019, is AFFIRMED.

                                       __________________________________
                                       MICHAEL H. WOJCIK, Judge