Hornstein v. Lynn Township Sewer Authority

866 A.2d 1192, 2005 Pa. Commw. LEXIS 29
CourtCommonwealth Court of Pennsylvania
DecidedJanuary 25, 2005
StatusPublished
Cited by1 cases

This text of 866 A.2d 1192 (Hornstein v. Lynn Township Sewer Authority) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hornstein v. Lynn Township Sewer Authority, 866 A.2d 1192, 2005 Pa. Commw. LEXIS 29 (Pa. Ct. App. 2005).

Opinion

OPINION BY

Senior Judge JIULIANTE.

Alex S. Hornstein appeals from the September 24, 2003 order of the Court of Common Pleas of Lehigh County (trial court) that denied Hornstein’s appeal from the Lynn Township Sewer Authority’s (Authority’s) adoption of Resolution No. 3 of 2002 (Resolution 3-02), which established a sewer tapping fee of $4,000.00 per connection to the Authority’s sewer system. For the reasons that follow, we affirm.

Hornstein is the owner and developer of a residential subdivision known as Madison Park North (MPN) in Lynn Township (Township). When completed, MPN will contain 104 townhouse units and two apartment buildings with 6 dwelling units each.

Hornstein obtained final approval for MPN on November 3, 1998. The Authority approved plans for MPN’s interior sewer collection system. The record also reflects that pursuant to the terms of a January 31, 1995 Subdivision Improvement/Maintenance Agreement (Subdivision Agreement) between' Hornstein and the Township, Hornstein was to be exempt from the payment of any tapping fees for houses in MPN from September 19, 1994 through September 19, 1999. On May 22, 1995, the Authority became a party to the Subdivision Agreement. Later in 1995, the Township transferred ownership of the sewer system back to the Authority.1

On October 11, 1995, the Authority enacted Resolution No. 2 of 1995 (Resolution 2-95), which established a tapping fee of [1195]*1195$4,000.00 per connection based upon calculations in a 1995 report by F & M Associates, Inc. (F & M), the Authority’s engineer at that time. On June 30, 1998, however, the Authority’s Board voted to adopt its “Connection Management Plan,” which limited the number of sewer permits per developer to 10 per year and also limited to 20 the total number of connections to the system that would be available during each one-year period until additional treatment capacity was provided.

On December 31, 1999, Hornstein filed 10 applications for sewer tapping permits for MPN. Prior to filing the applications, Hornstein was advised that there would be a tapping fee of $4,000.00 for each of the ten sewer permits. At the time of filing, Hornstein deposited, under protest, $40,000.00 with the request that the Authority consider his argument that the tapping fee was improper and, therefore, that the permits should be issued without the payment of any tapping fee.

At a January 18, 2000 meeting, the Authority’s Board voted to deny Homstein’s request for issuance of the permits without payment of the tapping fee and also denied his request that the $40,000.00 be refunded to him. Section 4 of the former Municipality Authorities Act of 1945 (the 1945 Act), Act of May 2, 1945, P.L. 382, formerly 53 P.S. § 306, established standards for calculating tapping fees. Although Section 4 has been repealed effective June 19, 2001, it is nevertheless applicable to Hornstein’s sewer applications.2

On February 16, 2000, Hornstein appealed the Authority’s imposition of the tapping fee to the trial court. Following a bench trial at which both parties presented evidence, the trial court concluded that in light of the existing problem of inadequate facilities to accommodate new development, the Authority had a rational basis for enacting the Connection Management Plan and imposing a tapping fee to recover permissible costs.

With regard to the method of calculating the tapping fee, however, the trial court determined that Hornstein’s appeal had merit. Specifically, the trial court determined that pursuant to Section 4B(t)(l)(iii)(E)(II) of the 1945 Act, formerly 53 P.S. § 306B(t)(l)(iii)(E)(II), a tapping fee cannot include the cost of upgrading the facilities to benefit existing customers. F & M, the Authority’s engineering firm, supplied the report upon which the Authority based its $4,000.00 tapping fee.

F & M’s report, which was incorporated into Resolution 2-95, listed the component parts of the tapping fee, ie., capacity part-existing, capacity part-future and collection part-existing. The total of the three component parts was $4,984.86. The Authority, though, reduced the tapping fee to $4,000.00.

The trial court noted that the capacity part-future component of the fee, which amounted to $2,011.25, covered the costs of upgrades that would benefit both new users and present users. Pursuant to Section 4B(t)(l)(iii)(E)(II) of the 1945 Act, however, the portion of the upgrade cost that benefited existing users should have been excluded.

[1196]*1196Inasmuch as the trial court could not determine what portion, if any, of the $2,011.25 capacity part-future component that actually benefited existing customers was included in the $4,000.00 fee, the trial court invalidated the fee. As a result, the trial court remanded the matter to the Authority to properly recalculate the tapping fee.

On remand, the Authority directed its current engineering firm, ARRO Consulting, Inc. (ARRO), to recalculate the tapping fee. ARRO concluded that the maximum tapping fee the Authority could charge is $6,055.00 based on the following three components: (1) collection part-existing — $3,600.00, (2) capacity part-existing — $2,055.00 and (3), capacity part-future — $400.00.

In determining the collection part-existing component, ARRO determined the historical cost to construct the existing collection part of the system and “trended”3 that cost to September 1995, the date for which the trial court directed the Authority to recalculate the tapping fee. After determining the trended cost of the collection part ($1,877,775.65), ARRO reduced that amount by the amount of a federal grant ($657,141.25) that was received for funding those facilities. The outstanding debt ($68,545.86) was also deducted from the trended cost of the collection part.

That amount ($1,152,088.60) was then divided by 80,000 gallons per day (gpd), which was the system capacity in 1995. This resulted in a collection cost of $14.40 per gpd. ARRO then multiplied the $14.40 by 250 gpd to determine the amount each owner of an “equivalent dwelling unit” (edu) should be charged per day.

ARRO based the 250 gpd/edu amount on a 1990 census figure reflecting 2.79 people per dwelling unit in the Township. This figure was multiplied by 100 gpd, a figure included in the Department of Environmental Protection’s (DEP’s) Domestic Wastewater Facilities Manual (DEP Manual).4 This resulted in a figure of 250 gpd/edu. Multiplying the $14.40 by 250 gpd/edu, ARRO determined that the Authority could charge a maximum of $3,600.00 per tapping fee for the collection part-existing component.

With regard to the capacity part-existing component, ARRO took the historical cost to construct the existing treatment facility and trended it to 1995. After determining the trended cost ($1,084,095.30), ARRO again deducted a federal grant ($386,858.75) and outstanding debt ($39,-573.55). That figure was divided by the 1995 capacity of 80,000 gpd, which resulted in a figure of $8.22 per gpd per person. The 250 gpd/edu was then multiplied by $8.22, which resulted in a maximum chargeable amount per tapping fee for capacity part-existing of $2,055.00.

ARRO also calculated that the Authority could charge per tapping fee for capacity part-future. ARRO concluded that a charge of $400.00 could be charged for the capacity part-future component.

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866 A.2d 1192, 2005 Pa. Commw. LEXIS 29, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hornstein-v-lynn-township-sewer-authority-pacommwct-2005.