City of Arvada v. City and County of Denver

663 P.2d 611
CourtSupreme Court of Colorado
DecidedJune 6, 1983
Docket80SA538
StatusPublished
Cited by19 cases

This text of 663 P.2d 611 (City of Arvada v. City and County of Denver) is published on Counsel Stack Legal Research, covering Supreme Court of Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Arvada v. City and County of Denver, 663 P.2d 611 (Colo. 1983).

Opinion

HODGES, Chief Justice.

This is an appeal from three trial court rulings granting summary judgments. We affirm. Because the procedural and factual background of the case is lengthy and complex, it is discussed in three phases to correspond with each of the trial court’s rulings.

PHASE I

In 1965 the Denver Water Board (the Board) contracted to sell Arvada up to *613 19,000 acre feet of water per year. Arvada agreed to pay for this water at the rates set forth in a schedule attached to the contract. Because the contract was of an indefinite duration, the parties agreed that the Board would have the right to periodically revise the schedule. 1

In 1972 the Board adopted Operating Rule 2.101 which assessed a “system development charge” (SDC) against all persons and entities coming into the system after January 1,1973. Before the Rule went into effect, Arvada filed a complaint for a declaratory judgment exempting it from the provisions of the new rule. Pending resolution of this suit, the parties agreed that Arvada would collect the SDC and place the funds in an escrow account.

On February 20, 1974, judgment was entered awarding the escrowed funds to the Board, the trial court having concluded that while the SDC could not be assessed against Arvada, it could be assessed against each individual resident. Arvada appealed this judgment on behalf of its individual users. In City of Arvada v. City and County of Denver, 36 Colo.App. 146, 539 P.2d 1294 (1975), the court of appeals held that these parties should have been joined before judgment was entered against them. It therefore vacated the judgment and ordered Arvada to refund the escrowed SDC charges to the users who paid them. On appeal we affirmed, City and County of Denver v. City of Arvada, 192 Colo. 88, 556 P.2d 76 (1976), except for that section of the court of appeals’ decision ordering a refund of the escrowed SDC funds. We remanded the case for a trial on this issue with the users joined as parties in interest.

On remand the trial court established the following classes pursuant to C.R.C.P. 23:

Class I — all water users- in the Arvada service area.
Class II — all persons who originally paid an SDC but later transferred their property.
Class II-A, Intervenors — all persons who currently own property upon which an SDC was assessed, whether or not they originally paid the charge.

On Motions for Summary Judgment the trial court ruled that the Board could not assess an SDC against Arvada’s individual users. The Board’s objection to this ruling constitutes the subject matter of the present appeal. Before addressing this particular issue, however, we note that the Board never appealed the trial court’s 1974 ruling that the SDC could not be assessed against the City of Arvada. Consequently, that ruling is res judicata and we only address the applicability of the SDC against individual users within the City of Arvada. We hold that the trial court correctly concluded that the fee may not be assessed against these individuals.

By the terms of Rule 2.101, the SDC is to be assessed only against users who come into the system after January 1, 1973. Since Arvada’s service contract was entered into in 1965, it clearly cannot be assessed a development fee, and since the rights of individual residents to the use of water are derived through and are the same as Arva-da’s, those individuals are also exempt from payment of the fee. As stated earlier, the 1965 contract gave Arvada the right to receive a maximum of 19,000 acre feet per year. With respect to that amount, Arvada is an “old” connector and as long as its residents use no more than this amount, they too are old connectors.

It should also be noted that under the 1965 contract, Arvada receives its water at a single, metered delivery point. Denver has no further responsibilities and performs no additional services once the water is delivered to that point. Arvada provides *614 the remaining treatment, storage and transmission facilities necessary to deliver potable water to its residents. These facts further support our conclusion that the 1965 contract never contemplated that Arvada’s individual users could be charged a development fee directed against new connectors to the Denver water system.

PHASE II

The facts relevant to Phase II of this appeal are as follows: In 1975, two years after the Board first imposed its SDC, Arvada’s City Council passed an ordinance imposing a one-time development fee on all persons connecting into the Arvada water system after April 1, 1975. The fee had two parts: a flat fee of $550 per residential unit and a sliding scale fee dependent upon the size of the meter being installed. The schedule setting forth the latter graduated fee was identical to the schedule used by the Denver Water Board in computing its SDC. Arvada has been depositing the graduated development fee into the escrow account mentioned earlier. Therefore, if the Board’s appeal is unsuccessful, those development fees collected since 1975 will belong to the City of Arvada and not the individuals who originally paid them. These individuals have therefore challenged the validity of that portion of Arvada’s development fee which corresponds to the Denver SDC. These Appellants allege that the fee is unconstitutional, unauthorized and so excessive, arbitrary and unreasonable as to be invalid.

With respect to Arvada’s authority to impose a development fee, we affirm the trial court’s ruling that Arvada was properly authorized to enact the fee ordinance. Subsection 31-35-402(l)(f), C.R.S.1973 (1977 Repl.Vol. 12), gives municipalities the power

“[t]o prescribe, revise, and collect in advance or otherwise, from any consumer or any owner or occupant of any real property connected therewith or receiving service therefrom, rates, fees, tolls, and charges or any combination thereof for the services furnished by, or the direct or indirect connection with, or the use of, or any commodity from such water facilities or sewerage facilities or both, including, without limiting the generality of the foregoing, minimum charges, charges for. the availability of service, tap fees, disconnection fees, reconnection fees, and reasonable penalties for any delinquencies ...; and in anticipation of the collection of the revenues of such water facilities or sewerage facilities, or joint system, to issue revenue bonds to finance in whole or in part the cost of acquisition, construction, reconstruction, improvement, betterment, or extension of the water facilities or sewerage facilities, or both; and to issue temporary bonds until permanent bonds and any coupons appertaining thereto have been printed and exchanged for the temporary bonds;

(Emphasis added).

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Bluebook (online)
663 P.2d 611, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-arvada-v-city-and-county-of-denver-colo-1983.