Opinion
No. 59102-9-I.
January 7, 2008.
Appeal from a judgment of the Superior Court for Snohomish County, No. 05-2-10648-2, George N. Bowden, J., entered October 23, 2006.
Affirmed by unpublished opinion per Schindler, A.C.J., concurred in by Grosse, J., and Coleman, J. Pro Tem.
Outlook Ridge LLC, Rolling Ridge LLC, and Sierra Ridge LLC (collectively "Outlook Ridge") wanted to develop the property they owned and obtain plat approval for a 275 lot subdivision earlier than the planned completion of Cross Valley Water District's construction projects to provide water service to the property. To facilitate development, Outlook Ridge entered into a developer extension agreement with the Cross Valley Water District (the District). The District agreed to provide water service to Outlook Ridge by temporarily purchasing water from an adjacent water district, the Silver Lake Water and Sewer District (Silver Lake). Outlook Ridge agreed to pay a connection fee to the District and to construct the water lines necessary to connect to the planned water facilities and to the Silver Lake water supply. In return, the District agreed to provide water service to Outlook Ridge, assume ownership of the water facilities Outlook Ridge installed, and maintain the water system. After obtaining plat approval and selling all of the lots, Outlook Ridge sued the District to obtain a refund of the water connection fee, alleging the District did not have the authority under former RCW 57.08.005(10) to require Outlook Ridge to pay a fee. On cross motions for summary judgment, the trial court dismissed the lawsuit against the District. We affirm.
The essential facts are undisputed. Cross Valley Water District (District) is a special purpose municipal corporation in Snohomish County, operating under chapter 57 RCW. Under former RCW 57.08.005, a water and sewer district has the exclusive right to provide water and sewer service to properties located within a district's geographic boundaries. The Outlook Ridge property is located in the Seattle Hill/Lowell-Larimer Road area (Seattle Hill area) and is entirely within the boundaries of the District. The adjacent Silver Lake Water and Sewer District (Silver Lake) borders the District next to the Seattle Hill Road.
As a result of inquiries in the early 1990's about obtaining water and sewer service to the Seattle Hill area, the District and Silver Lake entered into an interlocal agreement. RCW 57.08.007 provides in pertinent part:
Except upon approval of both districts by resolution, a district may not provide a service within an area in which that service is available from another district or within an area in which that service is planned to be made available under an effective comprehensive plan of another district.
Although the District had a water main located near the Seattle Hill area on the Lowell-Larimer Road, water service had not been extended to the area. But the District planned to construct water facilities necessary to serve the Seattle Hill area. By contrast, the District had no plans to extend sewer service to the Seattle Hill area. Silver Lake wanted the District to provide water service to some of the areas located within its district and had the sewer capacity to serve the Seattle Hill area. In the 1994 Interlocal Agreement, Silver Lake agreed to provide sewer service for the Seattle Hill area and the District agreed to provide water service to certain parts of the Silver Lake District. Silver Lake agreed to sell water to the District for the Seattle Hill area.
The water Silver Lake sold to the District originates from the City of Everett.
At about the same time, the District, Silver Lake and the Alderwood Water and Wastewater District entered into a separate interlocal agreement to design and construct water transmission facilities to increase the water supply from the City of Everett to the three water districts. The cost of the "Clearview Project" to construct the new transmission lines and other water facilities was approximately $43 million.
Both the Clearview Project and the District's planned capital improvements to provide water service to the Seattle Hill area were approved and adopted by the District in the 1999 Comprehensive Water System Plan (comprehensive plan). When the projects were completed, the District would obtain water for the Seattle Hill area from the Clearview Water Supply Agency.
On September 21, 1999, the District adopted Resolution 1999-9-24, requiring property owners in the Seattle Hill area to pay an equitable share of the cost for construction of water facilities. The water connection fee consists of two components: (1) a pro rata share of the cost of the facilities that the District planned to construct within the next ten years, and (2) a pro rata share of the cost of the local facilities necessary to provide water service to the property.
In 2001, the District and Silver Lake reexecuted the Interlocal Agreement for water and sewer service. The Interlocal specifically acknowledges each District "has the sole lawful authority to provide water and sewer service to properties within its jurisdiction." As to the Seattle Hill area, which is identified in the Agreement as "Area B," the District gave Silver Lake permission to provide sewer service to customers and property in that area. Silver Lake agreed to assume all responsibilities to maintain and operate the sewer system. The District retained the exclusive authority to provide water service to the Seattle Hill area except for 20 lots in the Waldenwood Subdivision. In Section 6 of the Interlocal, Silver Lake agreed to sell water to the District and the District assumed responsibility for construction and maintenance of the water facilities.
Outlook Ridge's reliance on a portion of the enforcement provision for delinquent payments in the Interlocal to argue that the District agreed Silver Lake had the authority to provide water service to the subdivision is unpersuasive.
Subject to the provisions of Section 8, Silver Lake agrees to wholesale water to Cross Valley sufficient to serve all customers and properties within Area "B." Any and all costs of construction, maintenance and repair of facilities required to wholesale water to Cross Valley, such as master meter(s), shall be paid solely by Cross Valley. Such facilities shall be constructed in accordance with Silver Lake standards and specification. Nothing herein shall require Cross Valley to purchase water from Silver Lake. Provided, however, that both water and sewer shall be provided by Silver Lake for that area delineated by the number 1 within Area "B" set forth on Exhibit "C" incorporated herein, which comprises approximately 20 lots of Waldenwood Subdivision, Phase II.
Outlook Ridge LLC, Sierra Ridge LLC, and Rolling Ridge LLC, (collectively "Outlook Ridge") were formed for the purpose of developing the property they owned in the Seattle Hill area and obtaining plat approval for three residential subdivisions consisting of 275 lots — the Outlook Ridge, McKinney Heights, and Sierra Ridge subdivisions. After obtaining plat approval, the developers planned to sell the lots to homebuilders.
As a condition of plat approval, Outlook Ridge had to obtain a certification of water and sewer service availability. The District and Silver Lake agreed to provide water and sewer service to Outlook Ridge in accord with the 2001 Interlocal Agreement.
RCW 58.17.110(1) requires proposed plats to have "appropriate provisions . . . for . . . potable water supplies, sanitary wastes. . . ."
In May 2003, Outlook Ridge entered into a developer extension agreement with the District as authorized by RCW 57.22.010. RCW 57.22.010 provides in pertinent part:
If the district approves an extension to the system, the district shall contract with owners of real estate located within the district boundaries, at an owner's request, for the purpose of permitting extensions to the district's system to be constructed by such owner at such owner's sole cost where such extensions are required as a prerequisite to further property development.
The developer extension with Outlook Ridge is expressly subject to the terms of the 2001 Interlocal between the District and Silver Lake. In the Deve loper Extension Agreement and Technical Specifications for Water Main Construction, (DEA), Outlook Ridge requested permission to construct an extension for the water facilities necessary to provide water service to the subdivision. Outlook Ridge agreed to construct a 12-inch water line, approximately 1300 feet in length along the Seattle Hill Road, to connect to the Silver Lake water line. Outlook Ridge also agreed to construct a water main extension along the Lowell-Larimer Road and a 12-inch water main to the northwest, along Seattle Hill Road, to connect to the District's planned water facilities. Outlook Ridge also agreed to convey title to the water facilities it constructed to the District. In Section 3 of the DEA, Outlook Ridge expressly agrees to pay the District a connection fee prior to proceeding with construction.
CONNECTION FEE CHARGE
The District presently has a connection fee charge for all property in its boundary. Payment of the connection charge will be required prior to notice to proceed with construction. Developer hereby agrees to pay all connection fee charges if property included in this agreement is sold prior to District acceptance of the facilities.
The District agreed to assume ownership of the water lines installed by Outlook Ridge and "to maintain and operate the water system and to provide water service" to Outlook Ridge.
In July 2003, Outlook Ridge entered into a separate developer extension agreement with Silver Lake. In the DEA with Silver Lake, Outlook Ridge agreed to construct the sewer facilities and Silver Lake agreed to provide sewer service and repair and maintain the sewer system. In addition to paying the sewer connection fee, Outlook Ridge also agreed to pay Silver Lake a fee when a builder requested a water service connection.
Because Outlook Ridge agreed in the DEA to pay the construction costs to connect to the District's water facilities, the District did not charge the local connection fee. The District only charged Outlook Ridge the pro rata share of the cost for the water facility projects approved in the comprehensive plan. On September 10, 2003, Outlook Ridge paid the District the connection fee as required by the DEA under protest. On May 28, 2004, Outlook Ridge conveyed the water lines it constructed and installed to the District. The bill of sale states,
[t]he condition of this conveyance is the adoption of a resolution by District accepting the water facilities and the agreement of District to operate and maintain the water facilities and provide water service from and after the date of said acceptance.
By the end of 2004, Outlook Ridge had sold all 275 lots to home builders. In December 2004, Outlook Ridge sent a letter to the District demanding a refund of the water connection fees arguing that Outlook Ridge was not connected to the District's water system. The District rejected the request for a refund, stating:
Your letter contains a fundamental misapprehension as to an essential fact. In several occasions you indicate that your clients are not connected to Cross Valley's system. This is incorrect. Water serviced [sic] is being provided through lines owned and operated by Cross Valley. All of your clients entered into Cross Valley's standard developer extension agreement. In those agreements, your clients each agreed to install a certain number of feet of water pipe and appurtenances in accordance with the terms of the agreements and the District's general conditions and specifications. One of those conditions was that the improvements constructed pursuant to the developer extension agreement would be deeded to the District upon completion. At that time, the subject water lines became subject to the control, use and operation of the District and its regulations. Thus, all of the properties developed by your clients have or will connect to Cross Valley's water system.
You are correct in your letter when you state that the water being provided to your clients' properties comes from Silver Lake Water District. This does not mean, however, that the water is being provided through facilities owned by Silver Lake. Once the water line serving your clients' properties crosses the boundary between Silver Lake Water District and Cross Valley Water District, it enters into lines owned and operated by Cross Valley.
. . .
You are also correct when you state your clients' properties are not presently directly connected to the bulk of Cross Valley's general facilities. However, the installation of lines that will make that direct connection have already been planned. Cross Valley is in the process of obtaining construction permits for those lines. That project may be completed in the current construction season, but most probably will be completed in 2006.
In May 2005, the Clearview Project was completed. Thereafter, the District began construction of a major transmission line to connect the Seattle Hill area and Outlook Ridge to the Clearview Project.
On August 5, 2005, Outlook Ridge sued the District for a refund of the water connection fee. On cross motions for summary judgment, the court granted the District's motion, dismissed the lawsuit, and awarded the District attorney fees. Outlook Ridge appeals summary judgment dismissal of the lawsuit arguing that the District did not have the any authority under former RCW 57.08.005(10) to impose a water connection fee.
We review summary judgment de novo. Wright v. Safeco Ins. Co. of America, 124 Wn. App. 263, 270, 109 P.3d 1 (2004). Summary judgment is properly granted when the pleadings and affidavits show there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. CR 56(c). By filing their cross motions for summary judgment, the parties concede there were no material issues of fact. Tiger Oil Corp. v. Dep't of Licensing, 88 Wn. App. 925, 930, 946 P.2d 1235 (1997). The statutory authority of a municipal corporation is an issue of law that we review de novo. Okeson v. City of Seattle, 159 Wn.2d 436, 445, 150 P.3d 556 (2007).
RCW 57.08.005 sets forth the powers of water-sewer districts. Former RCW 57.08.005(10) provides in pertinent part that a district has the power,
[t]o fix rates and charges for water, sewer, and drain service supplied and to charge property owners seeking to connect to the district's systems, as a condition to granting the right to so connect, in addition to the cost of the connection, such reasonable connection charge as the board of commissioners shall determine to be proper in order that those property owners shall bear their equitable share of the cost of the system. For the purposes of calculating a connection charge, the board of commissioners shall determine the pro rata share of the cost of existing facilities and facilities planned for construction within the next ten years and contained in an adopted comprehensive plan and other costs borne by the district which are directly attributable to the improvements required by property owners seeking to connect to the system.
The court's primary goal is interpreting a statute is to ascertain and carry out the intent of the legislature. Parkland Light Water Co. v. Tacoma-Pierce County Bd. of Health, 151 Wn.2d 428, 432, 90 P.3d 37 (2004). The intent must be derived primarily from the language of the statute itself. If the statute's meaning is clear on its face, we give effect to that plain meaning. Dep't of Ecology v. Campbell Gwinn LLC, 146 Wn.2d 1, 9, 43 P.3d 4 (2002). Plain words do not require construction and the court should assume the legislature means exactly what it says. We will not add language to an unambiguous statute. Certification v. Atkinson, 147 Wn.2d 16, 20, 50 P.3d 638 (2002). City of Kent v. Jenkins, 99 Wn. App. 287, 290, 992 P.2d 1045 (2000).
A municipal corporation has only those powers expressly granted and necessarily implied from the declared object and purpose of the corporation. Washington Public Util. Dist's. Util. Sys. v. PUD 1, 112 Wn.2d 1, 6, 771 P.2d 701 (1989). Title 57 sets forth an express legislative mandate to liberally construe chapter 57 RCW to carry out its purposes and objectives. RCW 57.02.030. The purpose of the statute as set forth in the preamble is to create and empower water districts to regulate and control the use, distribution, pricing and financing of the supply. See Laws of 1929 ch. 114, pmbl.
Outlook Ridge concedes that the District had the authority under former RCW 57.08.005(10) to impose a connection charge. But Outlook Ridge contends that because it was not connected to the District's "existing" water system and the water was supplied by Silver Lake, the District did not have the authority to impose a water connection fee.
Former RCW 57.08.005(10) explicitly authorizes the District the right to impose a connection charge on "property owners seeking to connect to the district's systems, as a condition to granting the right to so connect." The plain language of the statute does not limit a connection charge to the cost of an "existing system." And in addressing calculation of a connection charge, the legislature makes a distinction between charges for existing facilities and charges for facilities planned for the future. In addition to a charge for the "cost of existing facilities," the statute expressly allows a water district to impose a connection charge for the pro rata share of the cost of "facilities planned for construction within the next ten years and contained in an adopted comprehensive plan." RCW 57.08.005(10).
It is also well established under the caselaw that the District has the authority to impose a connection fee for the cost of future facilities. See Irvin Water Dist. No. 6 v. Jackson Partnership, 109 Wn. App. 113, 130, 34 P.3d 840 (2001); Landmark De v, Inc. v. City of Roy, 138 Wn.2d 561, 572, 980 P.2d 1234 (1999).
RCW 57.08.005(4) also gives a water district the authority to purchase water from another water district. RCW 57.08.005(4) provides in pertinent part, "[a] district shall have the following powers . . . [t]o purchase and take water from any municipal corporation, private persons, or entity."
Here, there is no dispute that the District had the exclusive authority to provide water service to the Seattle Hill area and to Outlook Ridge. Nor is there any dispute that the District's comprehensive plan approved construction of the Clearview Project and Seattle Hill/Lowell-Larimer Road project in order to provide additional capacity to serve the Seattle Hill area. To facilitate Outlook Ridge's request to proceed with development before completion of the planned improvements, the District agreed to temporarily purchase water from Silver Lake and enter into a DEA with Outlook Ridge. And in the DEA, Outlook Ridge requested permission to construct and install water lines to connect to the District's water system.
CROSS VALLEY WATER DISTRICT APPLICATION FOR PERMISSION TO CONSTRUCT EXTENSION TO WATER DISTRIBUTION SYSTEM
The undersigned, hereafter referred to as "Developer", hereby makes application to the Cross Valley Water District, hereafter referred to as "Water District", for permission to construct and install an extension in the easement and franchise areas of the Water District and/or on easements which are subject to approval of the Water District and to connect the same to the water distribution system of the Water District and makes the following representations and agreements, to wit:
1. LOCATION OF EXTENSION
The proposed extension will be installed in road franchise areas and/or easements on the other approved rights-of-way and shall be for the use and benefit of the property hereafter described which property is owned by the Developer and/or other persons who are contributing to the costs of said extension; that said other owners join in this application and are referred to as 'additional owners,' . . .
Outlook Ridge also agreed to construct a water line to connect to Silver Lake's water supply, to construct water lines to connect to the planned Clearview and Seattle Hill/Road Lowell Larimer projects, and to pay the District a connection fee. In exchange, the District agreed to accept ownership of the water facilities constructed by Outlook Ridge, "to maintain and operate the water system and to provide water service" to the subdivision. As agreed in the DEA and the Bill of Sale, the District owns the water lines that connect Outlook Ridge to the water supply. And, the water the District temporarily purchased from Silver Lake is provided to Outlook Ridge through a water system owned and operated by the District.
Relying on Holmes Harbor Sewer District v. Holmes Harbor Home Building, LLC, 155 Wn.2d 858, 123 P.3d 823 (2005), Outlook Ridge also argues that the water connection fee is unlawful. Holmes Harbor is distinguishable. In Holmes Harbor, the court held that the District could not impose monthly sewer charges for unimproved lots that were not connected to the sewer system and had no guaranteed right to connect. Holme s Harbor, 155 Wn.2d at 866. But here, unlike in Holmes Harbor, water was supplied to the plat through water lines owned and maintained by the District and the District guaranteed it would supply water to Outlook Ridge.
Outlook Ridge also argues that imposition of the connection fee is an unconstitutional tax. Specifically, Outlook Ridge contends that under Samis Land Co. v. City of Soap Lake, 143 Wn.2d 798, 806, 23 P.3d 477 (2001), the District cannot show there is a "direct relationship" between the connection charges imposed and services received by Outlook Ridge. But the connection charge is directly related to the planned projects to provide water service to Outlook Ridge. Outlook Ridge also argues the fee is an unlawful taking under the Fifth Amendment of the federal constitution. But Outlook Ridge only provides a conclusory, two sentence argument in support of this argument. "Passing treatment of an issue or lack of reasoned argument is insufficient to merit judicial consideration." Palmer v. Jensen, 81 Wn. App. 148, 153, 913 P.2d 413 (1996), remanded on other grounds1, 132 Wn.2d 193, 937 P.2d 193, 937 P.2d 597 (1997).
On this record, we conclude that the District had the authority to impose a water connection fee under RCW 57.08.005(10) and affirm the summary judgment dismissal. Upon compliance with RAP 18.1, the District is entitled to reasonable attorney fees under the DEA.
The DEA provides:
In the event either District or Developer employs an attorney to enforce or defend any claim or cause of action arising out of or relating to this Application, or any appeal therefrom, then in such event, the prevailing party shall be entitled to recover from the losing party, and the losing party shall pay, all of the prevailing party's reasonable costs and attorneys' fees incurred therein.