Contractors & Builders Ass'n v. City of Dunedin

Rule of Law:

A municipal utility connection fee is a valid user fee rather than an unauthorized tax only if the ordinance imposing the fee explicitly restricts the use of the collected funds to capital expansion costs necessitated by the new users.

Facts:

• The City of Dunedin enacted ordinances imposing connection fees for its municipal water and sewerage system.
• The ordinances required owners of property to pay these fees as a condition of connecting to the city's water and sewer services, typically upon issuance of a building permit for new construction.
• These fees were levied in addition to standard meter installation charges.
• The stated purpose of the fees was to raise money for 'capital improvements to the [water and sewerage] system as a whole.'
• The Contractors and Builders Association of Pinellas County, along with local landowners, were subject to these fees for new developments.

Procedural Posture:

• Contractors and Builders Association of Pinellas County sued the City of Dunedin in Circuit Court (trial court), seeking a declaratory judgment that the city's connection fees were invalid.
• The Circuit Court ruled in favor of the plaintiffs, finding the fees were an ultra vires attempt to impose a tax and enjoining the city from collecting them.
• The Circuit Court also ordered the city to refund fees, but only to those who had paid under protest.
• The City of Dunedin, as appellant, appealed the decision to the District Court of Appeal, Second District.
• The District Court of Appeal reversed the trial court's judgment, upholding the ordinance.
• The District Court of Appeal then certified that its decision passed upon a question of great public interest, allowing for discretionary review by the Supreme Court of Florida.