Graham v. City of Lakewood Village

796 S.W.2d 800, 1990 Tex. App. LEXIS 2628, 1990 WL 165365
Court of Appeals of Texas·Decided September 5, 1990·No. No. 2-89-276-CV·Published

Opinion

OPINION

ASHWORTH, Justice.

Appellants, plaintiffs below, appeal a judgment rendered after a non-jury trial which held they were responsible for monthly charges imposed by a municipality on their vacant lots because of the availability of water service.

We reverse and remand.

Beginning in 1969, Lakewood Village Subdivision was developed by Lakewood Village Development Company. Appellants are the successors of such company. Lakewood Village Development Company constructed a water and sewer system to service the lots in two of the three phases of the subdivision and by deed restrictions required that each home receive such service. Each lot in the two phases has a water meter box and sewer connection tap. In 1977, the City of Lakewood Village was incorporated as a Type B General Law City. In November, 1988, the city voted to purchase the water and sewer system, and in March, 1989, adopted an ordinance setting the sum of $25 per month as a minimum fee for water service and established a “standby fee” of $25 per month for all vacant lots that have water and sewer service immediately available. The ordinance provided that if a residential homestead exists on a lot and the owner owns additional contiguous vacant lots, then up to three of such additional vacant lots may be exempted from such fees. Such ordinance set the connection fee at $250 while it previously had been $1800.

Appellants, as owners of approximately fifty-eight vacant lots, brought suit seeking a declaratory judgment that such ordinance is unconstitutional and an injunction against its enforcement.

Appellants’ first point of error contends the trial court erred in declaring the $25 fee against a non-user is a legal fee, not an illegal tax, within the meaning of TEX.LOCAL GOV’T CODE ANN. § 51.032 and §§ 402.001 et seq. (Vernon 1988 and Supp.1990).

The trial court filed extensive findings of fact and conclusions of law. Appellants’ first point is directed toward conclusion of law number six which states the standby fee in question is not an illegal tax, but rather a fee enacted as part of a utility rate ordinance. At the request of appellants, the trial court filed an additional conclusion of law number one which states the standby fee is a fee for the use of the water and sewer system of the city. We must consider these two conclusions together in order to rule on appellants’ first point of error.

[802] The key issue in this appeal is whether the city has the authority to charge a monthly fee to the owners of vacant lots because of the availability of water and sewer service as distinguished from water furnished or use of sewer services.

We examine the pertinent sections of the Texas Local Government Code for guidance in determining the issue and emphasize language which we consider to distinguish between availability and use. Section 402.001 provides that a municipality may purchase, construct, or operate utility systems and regulate the same. Lines of the system may be extended outside the city; water, sewer, gas, or electric service may be added to persons outside the city. Section 402.002 provides a municipality may buy, own, construct inside or outside the city limits, and maintain and operate utilities and receive compensation for services furnished. The City may make or purchase utilities and sell them to the public. Section 402.0025 provides for the collection of charges for utility services furnished. Section 402.002 provides for payment of annual sums by the city to a school district to compensate for taxes lost if the city takes over an existing public utility. Section 402.011 empowers a city owning its own water system to condemn private property to bring water into the city. Section 402.012 provides that cities located in a water district or which have a contract with a water district for untreated water may acquire or construct water treatment facilities and transportation systems, issue bonds, impose charges for use of the facilities and levy taxes for payment of the bonds and operation and maintenance of the facilities. Section 402.013 applies to cities of more than 1000 that own and operate a water system. Such cities are empowered to acquire interests in property by eminent domain if necessary, to furnish adequate and wholesome water supplies.

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Graham v. City of Lakewood Village, 796 S.W.2d 800, 1990 Tex. App. LEXIS 2628, 1990 WL 165365 (Tex. Ct. App. 1990).

796 S.W.2d 800 (Graham v. City of Lakewood Village) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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