Opinion
No. DBD-CV-08-4008478 S
May 25, 2010
MEMORANDUM OF DECISION
PROCEDURAL BACKGROUND
The parties in this action are the plaintiff, Ridgefield Housing Authority and the defendant, Ridgefield Water Pollution Control Authority. The plaintiff is the housing authority of the Town of Ridgefield and the defendant is the water pollution control authority of the Town of Ridgefield. The plaintiff constructed four new buildings in Ridgefield for low income housing, each comprising five apartment units, known as the Prospect Ridge Expansion, and requested sewerage hookup for the units. In 2008, the defendant assessed the plaintiff a sewerage hookup fee of $5700 per unit for a total due of $114,000.
The plaintiff alleges in this action that the defendant acted illegally in violation of General Statutes §§ 8-119gg, 7-249, 7-250 and 7-255 by assessing a sewer hookup fee of $5700 for each unit in the Prospect Ridge Expansion. The plaintiff claims that the sewerage hookup fee is in actuality a special benefit assessment and it is exempt from special benefit assessments payable to a municipality pursuant to § 8-119gg. The plaintiff also claims that even if a sewerage hookup fee is not a per se special benefit assessment, the purpose of the fee was to recoup capital costs of construction and expansion and such a fee is incorporated within the meaning of that term in § 8-119gg. The defendant claims that it is not subject to § 8-119gg, as it is not a municipality, and contends that the $5700 per unit sewer hookup fee is a connection fee which is excluded from § 8-119gg. The plaintiff is seeking a permanent injunction enjoining the defendant from seeking any further hookup fee payments from the plaintiff without interfering with the plaintiff's connection with and use of the sewerage system. The plaintiff is also seeking a refund of its sewer payments in excess of a fair and reasonable connection fee. A permanent injunction hearing was held in this matter on March 30, 2010.
II THE EVIDENCE
At the hearing the plaintiff offered evidence of the statutory history relating to municipal sewer systems, the power and authority of water pollution control authorities, and the history of "payments in lieu of taxes" (referred to as PILOT) payments by local housing authorities in Connecticut. (See Trial Exs. 2, 5, 6, 8, 9, 10, 11 12.). The plaintiff also introduced evidence of a 1976 PILOT agreement between the Housing Authority of the town of Ridgefield and the town of Ridgefield, which provided in relevant part that "the town of Ridgefield has determined that the Local Authority shall pay to said municipality in lieu of property taxes, special benefit assessments and sewerage system use charges the sum of ten percent (10%) of the shelter rent paid by tenants for each occupied dwelling unit of the Project and the Local Authority agrees to make the Town of Ridgefield such payment in lieu of taxes, assessments and charges." (Trial Ex. 13.)
Evidence was also admitted that showed that beginning in 1988, the town of Ridgefield was ordered by the Connecticut Department of Environmental Protection to expand its sewerage system plant. The town of Ridgefield then proceeded to explore various avenues for raising capital to pay for the mandated sewer expansion. Ms. Sue Manning, the former first selectman of the town of Ridgefield and former chairman of the defendant, testified for the defendant regarding the history in Ridgefield of the sewer hookup fees at issue in this case. Legal notices and minutes of meetings relating to the construction and expansion of the sewer treatment plant and charges for sewer hookups were also introduced into evidence. (See Trial Exs. B, D, G, F, H, I, J, K, L, M, N, O P.)
In a January 1988 letter from the town of Ridgefield legal counsel to Ms. Manning, sewerage usage, impact fees, special benefit assessment fees and general taxation of the entire population of Ridgefield were evaluated as options for raising the necessary capital to cover the costs of the sewer plant construction and expansion. (Trial Ex. 14.) No decision was reached at that time as to which avenue to pursue for funding the construction and expansion. The term hookup fee was not used in connection with this evaluation.
As of late 1990, the town of Ridgefield had not yet resolved how to fund the construction and expansion of the sewer plant. On November 19, 1990, the Ridgefield board of selectmen received a memorandum from a Robert Stout, a staff member of the town of Ridgefield, discussing various options for raising capital to pay the town's anticipated $700,000 yearly debt service for the aforesaid sewer expansion. (Trial Ex. 15.) The board of selectmen again examined the options available to it, including a special benefit assessment, impact fees and the absorption of the costs of the expansion by the general public through property taxes. Id. The recommendation made to the board of selectmen in 1990 was that "impact fees appear to be the fairest method of allocating costs, charging only those who actually use the plant" and special benefit assessments would be difficult to allocate. The term "hookup fee" was not used in this evaluation either as a proposal for recouping the capital costs of the sewer expansion. At the time these various options were being evaluated and discussed, the town of Ridgefield was in fact charging new sewer users a hookup fee of $750 for connecting to the system in Ridgefield, the purpose of such fee being to process permit applications and connection inspections. (Trial Exs. C, D).
On December 13, 1990, the defendant held a meeting and its members discussed sewer fee structures. Robert Stout was present and according to the minutes stated "an equitable fee structure must be created to pay for the new plant's debt service." (Trial Ex. B.) Four methods of determining the effects of the new plant were discussed: "1) follow pre-referendum brochure as closely as possible; 2) determine and charge an impact fee to recover total capital cost; 3) use special assessments; and 4) create a special tax district." (Trial Ex. B.) No decision was reached at that meeting as to which approach to take.
On March 13, 1991, the defendant convened again and decided to appoint a five-member committee, known as the Sewer Financing Advisory Committee, to study sewerage repayment options. (Trial Ex. 17.) On May 22, 1991, the defendant held another meeting and the Sewer Financing Advisory Committee reported back to the defendant on the capital breakdown of the sewer expansion and proposed fees of $823 and $5881 for new users over a twenty-year period. (Trial Ex. 19.) Frank Dolan, a member of the Sewer Financing Advisory Committee, submitted a minority report in which he stated "he agreed with the fee structure, but that the Committee's recommendations are a departure from the method of collecting fees which is currently in place. He recommended continuing with the beneficial assessment approach . . ." Id. According to the minutes, Alan Kerr, town counsel to Ridgefield, stated that "benefit assessments are normally used when a sewer district is expanded, not when the plant is enlarged. It might be difficult to defend this method of charging to the court." Id. No decision was reached on the recommendations of the Sewer Financing Advisory Committee at this meeting.
On January 18, 1992, legal notice was published in the Ridgefield Press that the defendant was planning to hold a meeting on Monday, January 27, 1992, to discuss recommendations of the Sewer Financing Advisory Committee to allocate the costs of the loan repayment of the state mandated upgrade and expansion of the South Street Sewer Treatment plant. (Trial Ex. F.) The notice stated that the committee recommended the "following fee structure as one that fairly apportions the costs of services based upon the actual burden placed upon the South Street Sewerage Treatment plant by the various user groups within Ridgefield . . ." Id. The notice further provided that a "new user" would pay an "impact fee" of between $823-$5881. ( Id.) Nowhere in the notice did the defendant nor the town of Ridgefield call the fee to be assessed a "hookup" fee.
The January 27, 1992 meeting did in fact occur and the defendant subsequently met on February 5, 1992, to discuss the public hearing on sewer fees. (Trial Ex. G.) The minutes reflect that "some assumptions were changed because the majority of opinion at the public hearing favored increasing the cost of future hook-ups." Id. On March 11, 1992, the defendant held a meeting in the Ridgefield town hall. With respect to the agenda item of "loan repayment," Gary Dufel, a staff member for the town of Ridgefield, "explained that the two options have been refined for repaying the loan for capital expenses at the sewer plant. The first would be to pay for the expansion out of the tax base. The second places more criteria into future hook-up costs. The first year $650,000 will be needed. A sewer hook-up would cost $5800 . . ." (Trial Ex. I.) A member of the defendant moved that the proposals be taken to a public hearing on April 2, 1991 [sic] and that motion carried. Id.
Eight days later on March 19, 1992, legal notice was published pursuant to § 7-255 for a public hearing on April 2, 1992, "to discuss proposed fees and charges for hook-up and use of the public sewer system, which charges will be utilized to pay for the sewer plant upgrade and expansion." (Trial Ex. J.) Two options were proposed for exploration and evaluation at that hearing. Option 1 was a "yearly loan repayment of $650,000 from general tax revenues and . . . option 2 was a yearly loan repayment of $445,850 paid by sewer users plus $126,000 paid by future users, plus $78,150 paid from general revenues." (Trial Ex. J.) On April 8, 1992, the defendant met at the Ridgefield town hall and discussed the sewer loan repayment plan. (Trial Ex. K.) A motion was made by a member of the defendant to adopt option 1, payment through general tax revenues, and seconded by another member. Id. That motion failed. Another member of the board, then moved to approve option 2 as set forth above, and that motion was carried by three members of the defendant, including Ms. Manning. Id. After option 2 was adopted, Ms. Manning then passed out two additional proposals, one of which related to developers of large projects paying such sewer costs over a period of time. Id. On April 8, 1992, the "hookup" fee at issue in this case was adopted by the defendant.
Approximately two weeks later, on April 23, 1992, legal notice was published in the Ridgefield Press by Ms. Manning, chairman of the defendant, pursuant to § 7-255, "that the following charges were adopted by the WPCA of the Town of Ridgefield on Wednesday April 8, 1992 and a copy of said charges were filed in the office of the Ridgefield Town Clerk on Monday April 20, 1992." (Trial Ex. M.) The legal notice clearly reflected that the charges enumerated were to pay for the annual capital cost of $650,000 for the sewer plant expansion. Id. Incorporated into this capital cost recovery plan was the $5700 sewer hookup fee at issue in this case. Id.
On January 24, 2008, the plaintiff applied to the Ridgefield building inspector for a certificate of occupancy for the first two buildings in Prospect Ridge. By a letter dated January 25, 2008, the building inspector refused to issue a certificate of occupancy on the grounds that "all the required sign offs have not been completed." The sign off at issue was from the defendant. The defendant had presented the plaintiff with a statement for payment in the amount of $5700 for a sewer hookup fee for each of the five dwelling units in each of the four buildings in Prospect Ridge for a total fee due of $114,000. The defendant refused to sign off with the building inspector because the plaintiff had failed to pay a sewer hookup fee for each of the units. The defendant permitted the plaintiff to pay the sewer hookup fee in either one lump sum payment or over a ten-year period of time at a rate of $570 per year per unit with a three percent additional charge on the declining balance. The plaintiff paid an initial installment of $2850 per building for a total of $11,400 for the first year installment of the sewer hookup fee to obtain certificates of occupancy and to permit the low income families on their list to move into the Prospect Ridge buildings. (Trial Ex. X.)
III DISCUSSION
The plaintiff is seeking a permanent injunction enjoining the defendant from seeking any further hookup fee payments from the plaintiff without interfering with the plaintiff's connection with and use of the sewerage system and is also seeking a refund of its sewerage payments in excess of a fair and reasonable connection fee. "A party seeking injunctive relief has the burden of alleging and proving irreparable harm and lack of an adequate remedy at law." (Internal quotation marks omitted.) Brennan v. Brennan Associates, 293 Conn. 60, 86, 977 A.2d 107 (2009). In addition, to obtain a permanent injunction, the party must demonstrate actual success on the merits rather than likelihood of success, as is required when a preliminary injunction is requested. Amoco Production Co. v. Gambell, 480 U.S. 531, 546, n. 12, 107 S.Ct. 1396, 94 L.Ed.2d 542 (1987). In ordering a permanent injunction, "[T]he relief granted must be compatible with the equities of the case." (Internal quotation marks omitted.) Castonguay v. Plourde, 46 Conn.App. 251, 267, 699 A.2d 226, cert. denied, 243 Conn. 931, 701 A.2d 660 (1997).
In order to issue a permanent injunction, the court must first address two issues in this case. The first is whether the defendant is a municipality under § 8-119gg and the second is whether the $5700 fee charged per unit to the plaintiff is an assessment under §§ 7-249 and 8-119gg. A review of the legislative history is warranted in this case to understand the purpose of the statutes at issue and the intent of the legislation.
A. Municipality Pursuant to § 8-119gg
Section § 8-119gg provides in relevant part: "In lieu of real property taxes, special benefit assessments and sewerage system use charges otherwise payable to a municipality, a housing authority approved by the Commissioner of Economic and Community Development for state financial assistance for a low income housing project, shall pay each year, to the municipality in which any of its housing projects for low income families are located, a sum to be determined by the municipality with the approval of the Commissioner of Economic and Community Development . . ." Chapter 128 of the General Statutes, entitled the "Department of Economic and Community Development: Municipal Housing Projects," under which § 8-119gg falls, defines municipality as "any city, borough or town. The municipality means the particular municipality for which a particular housing authority is created." (Internal quotation marks omitted.) General Statutes § 8-39(1).
Section 8-119gg is one of several statutes enacted by the Connecticut legislature to address the balance between a housing authority's limited revenue stream, the contributions it makes to a community, and the need to pay for municipal services. Section § 8-119gg applies to low income housing projects; General Statutes § 8-119a applies to housing projects for the elderly; and General Statutes § 8-71 applies to moderate rental housing projects. These statutes are known as "PILOT," or payment in lieu of taxes statutes, and provide that in lieu of real or property taxes, special benefit assessments and sewage use system charges otherwise payable to the municipality, a housing authority will make an annual payment to the municipality in an amount to be determined by the municipality with the approval of the Commissioner of Economic and Community Development, such an amount is not to exceed a percentage of shelter rent per annum specified in the applicable statute. See §§ 8-119gg, 8-119a, 8-71.
The Connecticut attorney general's office has opined on this subject, stating that "the purpose of this provision [§ 8-71] is obvious. It implicitly recognizes that local housing authorities do not operate for a profit and that to minimize their expenses and to enable them to provide moderate rental housing within the financial reach of families of low income . . . a reduction in their property tax burdens (including special benefit assessments and sewage system use charges) was necessary while still balancing the municipality's need for revenue to provide services to the authority." (Citation omitted; internal quotation marks omitted.) Opinions, Conn. Atty. Gen. No. 84-128, pp. 474-75 (November 15, 1984) (Trial Ex. 6).
The clear intent of the forgoing legislation, including § 8-119gg, is to control the expenses of a municipal housing authority, an entity with a limited income stream, by putting a cap on payments for various municipal charges, including special benefit assessments and sewage usage charges. The first issue that arises in this case is whether the defendant, a water pollution control authority, is a municipality for purposes of § 8-119gg and is therefore bound by § 8-119gg.
There are few appellate court cases that address the issue of what constitutes a municipality for purposes of Chapter 128 and its corresponding housing authority statutes. In Metropolitan District v. Housing Authority, 12 Conn.App. 499, 506, 531 A.2d 194, cert. denied, 205 Conn. 814, 533 A.2d 568 (1987), the housing authority of the city of Hartford claimed it was exempt from sewer services charges under § 8-71, a statute comparable to § 8-119gg. The Appellate Court found that the Metropolitan District, which provided sewer services, was not a municipality as defined in General Statutes § 8-39, for it was not a city, borough or town and that the municipality in that case was the city of Hartford. See Id., 506-07. The Appellate Court went further and found "General Statutes § 8-71 creates an accommodation between municipalities and tax exempt housing authorities in order to reimburse the municipality for lost tax revenue. That statute, however, does not concern an independent, coexistent municipal entity. It does not refer to the Metropolitan District, and therefore nothing in the statute absolves the respondent [housing authority] of its obligation to pay for sewer services." Id., 507.
The plaintiff argues in its post-trial memorandum that the Metropolitan District case is distinguishable from the case at bar as the Metropolitan District was not the particular municipality for which a particular housing authority was created, since that municipality was the city of Hartford. (Plaintiff's Mem. p. 13.) Thus, the plaintiff argues there was no municipality to which a payment in lieu of taxes could be made. The court agrees. The Metropolitan District is a municipal corporation chartered by the General Assembly in 1929 to provide potable water and sewerage services on a regional basis in this state, and provides such services regionally to multiple towns in Connecticut. See Metropolitan District v. Housing Authority, supra, 12 Conn.App. 504.
The plaintiff also makes a similar argument with respect to another well cited water pollution control authority case, Housing Authority v. Water Pollution Control Authority, Superior Court, judicial district of New London, Docket No. 102447 (September 24, 1993, Hendel, J.). In that case, the town of Griswold and its housing authority and the Borough of Jewett City and its water pollution control authority were separate municipal corporations, and a payment in lieu of taxes to the town of Griswold would not have offset the expenses of Jewett City.
The facts present in this case with respect to the defendant are distinguishable from the Metropolitan District v. Housing Authority and the Housing Authority v. Water Pollution Control Authority cases and holdings therein. General Statutes § 7-247 allows a municipality, by ordinance, to designate its legislative body or create a new board to be the water pollution control authority. The defendant was established in this manner in the Ridgefield code of ordinances and is the means by which the town of Ridgefield operates its sewer system. (Trial Ex. A; Stipulation of Facts 2, 3.) The Ridgefield code of ordinances describes the defendant as the sewer authority for the town. (Trial Ex. A.) The defendant issues its assessments for sewage usage and assessment fees through the town of Ridgefield tax collector and such payments are made to the town of Ridgefield tax collector. (Trial Exs. FF and RN.) The defendant only serves the town of Ridgefield and its office and meetings are conducted in the town of Ridgefield buildings.
The plaintiff also persuasively argues that the legislature did not intend to put a cap on sewerage system use charges only when the system is operated by a municipality, but not when it is operated by a water pollution control authority, because in 1949 there were no water pollution control authorities. It was not until the 1955 supplement to the General Statutes that Section 313d of the 1955 supplement allowed a municipality to create a new board or commission by ordinance to be known as the sewer authority. (Plaintiff's Mem. p. 15.) In Public Act 78-154, "sewer authority" became "water pollution control authority." (Trial Ex. 8; Plaintiff's Mem. p. 15.)
This court agrees with the plaintiff that the only reasonable interpretation of these statutes, consistent with the legislative history, is that the legislature intended that the taxes and related charges to be paid by a housing authority to its municipality be capped at a percentage of housing authority income, so that the housing authority would not be bankrupted by excess charges. It would defeat the purpose and intent of § 8-119gg to control the expenses of a housing authority if the municipality could exempt itself from that statute by operating its sewer operations through a town sewer authority.
It should be noted that nowhere in the defendant's post-trial memorandum dated May 4, 2010, does it attempt to refute the position taken by the plaintiff that the defendant is a municipality under § 8-119gg.
In this case, the 1976 PILOT agreement that the plaintiff relies upon is between the housing authority of the town of Ridgefield and the municipality of the town of Ridgefield. This court finds that the defendant, a board created by the town of Ridgefield, is a municipality and is bound by the aforesaid 1976 PILOT agreement and § 8-119gg.
B. Hookup Fee
The plaintiff next argues that the sewer hookup fee it was charged is essentially a special benefit assessment, and, as such, it is exempt from paying such an assessment under § 8-119gg to the defendant. The defendant argues that a hookup fee is a charge for connection with a sewerage system allowed by § 7-255, is not a special benefit assessment, and thus the plaintiff is not exempt from paying such fee under § 8-119gg.
"It is well settled that a municipality has wide discretion in connection with the decision to supply sewerage . . . Although this discretion is not absolute, [t]he date of construction, the nature, capacity, location, number and cost of sewers and drains are matters within the municipal discretion with which the courts will not interfere, unless there appears fraud, oppression or arbitrary action." (Citation omitted; internal quotation marks omitted.) Archambault v. Water Pollution Control Authority, 10 Conn.App. 440, 444, 523 A.2d 931 (1987). The two relevant statutes which pertain to the parties' arguments are §§ 7-249 and 7-255.
Section 7-249 provides a means by which a municipality or water control pollution authority may recoup the costs of a sewer expansion and maintenance. Section 7-249 provides in relevant part: "[A]t any time after a municipality, by its water pollution control authority, has acquired or constructed, a sewerage system or portion thereof, the water pollution control authority may levy benefit assessments upon the land and buildings in the municipality, which in its judgment, are especially benefitted thereby . . . Such assessment may include a proportionate share of the cost of any part of the sewerage system, including the cost of preliminary studies and surveys, detailed working plans and specifications. construction costs . . . or any other expenses incidental to the completion of the work . . . No assessment shall be made against any property in excess of the special benefit to accrue to such property." Section 7-255 provides in relevant part: "[T]he water pollution control authority may establish and revise fair and reasonable charges for connection with and for the use of a sewerage system. The owner of property against which any such connection or use charge is levied shall be liable for payment thereof."
Sections 7-249 and 7-25 5 clearly differentiate between special benefit assessments for sewer construction and expansion costs and sewage connection and usage fees.
A state of Connecticut Department of Environmental Protection publication entitled "Methods of Capital Cost Recovery on Water Pollution Control Projects" defines a benefit assessment as "the charge a municipality or wastewater district places against a property to recover the cost of capital expenditures for the acquisition, construction, or upgrading of wastewater collection, conveyance or treatment facilities." (Trial Ex. II, p. 2.) "In general, the statute [§ 7-249] allows a water pollution control authority (WPCA) to levy benefit assessments on properties that are especially benefitted by the sewerage system." Id., p. 3.
The Department of Environmental Protection publication also defines "connection charge" as referenced in General Statutes § 7-255 as "a charge that may be levied at the time of connection with the sewer and is generally in addition to the benefit assessment." (Trial Ex. II, p. 3.) "The first, which exists while the debt for the sewer system is still active, generally covers the municipal cost of processing a permit to connect, including the inspection of the connection." (Emphasis added.) Id. It appears that the $750 charge that the town of Ridgefield charged for hookup to the sewer system prior to the expansion at issue in this case fits this description. (See Trial Exs. C, D.) The publication goes on to say "[t]he second, which usually occurs after the capital debt for the sewer has been paid off, covers both the permit processing costs and lump sum payment in lieu of a benefit assessment. In the latter case, the funds collected in lieu of a benefit assessment are available for use for any capital costs within the existing or proposed municipal sewer system." (Emphasis added.) Id.
In this case, the town of Ridgefield spent years exploring the means by which it could raise capital to pay the debt service on the loan for the construction of the state mandated sewer system expansion. The defendant, in its post-trial memorandum, admits that the Sewer Financing Advisory Committee of the town of Ridgefield, when looking at the funding for the sewer expansion and construction, recommended "a connection fee to be charged to the new users, who would be utilizing the additional capacity . . . to recover only that portion of the capital project, 14.0% of the total project cost . . ." (Defendant's Mem. p. 7; Trial Exs. F, O.)
There is no dispute that the $5700 hookup fee adopted by the defendant was to be used to pay for the capital costs associated with the sewer expansion and construction. There is also no dispute that this fee was to be assessed prior to the capital debt for the sewer being paid off. Section 7-249 specifically provides that after a municipality, by its water pollution control authority, has acquired or constructed a sewerage system it may levy benefit assessments upon the lands and buildings in the municipality which in its judgment are especially benefitted thereby to recoup the costs of construction. Section 7-255 has no such language and specifically provides that a water pollution control authority may establish and revise fair and reasonable charges for connection with and use of a sewerage system.
The defendant cites to Cyr v. Coventry, 216 Conn. 436, 441, 582 A.2d 452 (1990), for the proposition that the town of Ridgefield had many options to fund the construction and expansion of the sewer extension project, including connection and usage charges. In Cyr, the court held that "numerous means of funding the sewer project were available to the defendants; see e.g., General Statutes § 7-255(a) (connection and use charges), § 7-264 (borrow upon credit of municipality), and § 7-273a (service charges); an assessment of benefits was not required in order to comply with the order." Cyr v. Coventry, supra, 216 Conn. 441. However, it should be noted that in Cyr, the town of Coventry imposed an assessment of benefits pursuant to § 7-249, and not § 7-255, to fund the sewer construction and expansion project in the town.
This court has reviewed other cases regarding the construction and expansion of sewer projects in which all of the towns funded the construction through an assessment of benefits pursuant to § 7-249 and not § 7-255. See Shoreline Care Ltd. Partnership v. North Branford, 231 Conn. 344, 650 A.2d 142 (1994); Bridge Street Associates v. Water Pollution Control Authority of Suffield, 15 Conn.App. 140, 543 A.2d 1351 (1988); Anderson v. Litchfield, 4 Conn.App. 24, 492 A.2d 210 (1985). In Paley v. Hebron, Superior Court judicial district of Tolland, Docket No. CV 95 57797 (November 28, 1997, Klaczak, J.), the court noted that in using a special benefit assessment formula, it may happen that the town cannot fully recoup the cost of the sewer system from the property owner and that a town may have to recoup the costs from other fees associated with its sewerage system, including connection and usage fees.
In this case, the defendant instead of attempting to recoup any costs under § 7-249, chose to charge users a $5700 lump sum fee pursuant to § 7-255, and called it a hookup fee. The defendant asserts that the fee charged pursuant to § 7-255 was proper and that the court should construe the plain and unambiguous language of § 7-255. (Defendant's Mem. p. 10.)
The issue that arises in this case is does the name that the defendant has called the fee, a "hookup fee," control whether the plaintiff is exempt from paying such fee under § 8-119gg or whether the clear purpose and intent of the fee controls over the name.
As stated above, § 8-119gg is one of several statutes enacted by the Connecticut legislature to address the balance between a housing authority's limited revenue stream, the contributions it makes to a community, and the need to pay for municipal services. "Local housing authorities do not operate for a profit and to minimize their expenses and enable them to provide moderate rental housing within the financial reach of families of low income a reduction in their property tax burdens, including special benefit assessments and sewerage system use charges, was necessary while still balancing the municipality's need for revenue to provide services to the authority." See, Opinions, Conn. Atty. Gen. No. 84-128, pp. 474-75 (November 15, 1984); (Trial Ex. 6). The clear intent of the forgoing legislation, including § 8-119gg, is to control the expenses of a municipal housing authority by putting a cap on payments for various municipal charges, including special benefit assessments and sewage usage charges. The purpose and intent of a special benefit assessment is to pay for the construction and expansion of sewer systems.
In this case, the defendant does not dispute that the $5700 hookup fee was a fee attributable to the increased capacity utilized by new users joining the system, and that the fee was to pay for fourteen percent of the capital project cost of the sewer expansion. The purpose of this fee, as described by the defendant, falls clearly within the scope of what a special benefit assessment fee would be as it would be the charge a municipality or wastewater district places against a property to recover the cost of capital expenditures for the acquisition, construction, or upgrading of the sewer facilities and which is levied on properties that are especially benefitted by the sewerage system. (Trial Ex. II pp. 2-3.) The plaintiff, a housing authority that provides low income housing, was assessed, in total, a $114,000 fee to "connect" with the Ridgefield sewer system. The defendant has admitted this fee was not simply for the connection to the sewer system, but to repay the capital costs incurred as a result of the increased usage by the plaintiff.
The court finds that while the defendant called this a "hookup" fee, this is the type of fee, which in the ordinary course would have been billed as an assessment, and the type of fee that the legislature intended that housing authorities be exempt from paying. Ironically, it appears that the defendant agrees. On the town of Ridgefield's tax collector's office web page it clearly states that "Sewer use and ` assessment (hook-up)' charges are also billed and collected from this office." (Trial Ex. NN.) The town of Ridgefield itself calls this hookup fee an assessment. It should also be noted that, prior to the sewer plant expansion at issue in this case, that new sewer users in the town of Ridgefield were charged a $750 connection fee. As set forth above, the typical purpose of a connection fee is to compensate the municipality for the cost of processing a permit to connect, including the inspection of the connection. See Trial Ex. II. It appears that the previous $750 connection fee was deemed at that time to be a reasonable and fair fee for that purpose.
The court finds that the $5700 "hookup" fee charged per unit to the plaintiff on the Prospect Ridge project was in actuality a sewerage assessment, not a connection fee, and as such is covered by § 8-119gg. "A party seeking injunctive relief has the burden of alleging and proving irreparable harm and lack of an adequate remedy at law." (Internal quotation marks omitted.) Brennan v. Brennan Associates, 293 Conn. 60, 86, 977 A.2d 107 (2009). In the context of a permanent injunction, irreparable harm is shown by success on the merits. In granting a permanent injunction, "the relief granted must be compatible with the equities of the case." Castonguay v. Plourde, 46 Conn.App. 251, 267, 699 A.2d 226, cert. denied, 243 Conn. 931, 701 A.2d 660 (1997). In this case, the plaintiff has successfully established that the defendant is a municipality pursuant to General Statutes § 8-119gg and that the $114,000 fee charged to it by the defendant was in actuality a sewerage assessment. This court finds based on the facts in this case, the equities clearly lie in favor of the plaintiff.
IV CONCLUSION
For the reasons discussed above, the court concludes that the plaintiff has met its burden and that the plaintiff is entitled to a permanent injunction enjoining the defendant from seeking any further hookup fee payments from the plaintiff without interfering with the plaintiff's connection with and use of the sewerage system. The court also orders the defendant to refund to the plaintiff the sewerage payments it has made that are in excess of a fair and reasonable connection fee.