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City of Key West v. Key West Golf Club Homeowners

Florida Court of Appeals, Third District

May 31, 2017

City of Key West, Appellant/ Cross-Appellee,
Key West Golf Club Homeowners', etc., et al., Appellees/Cross-Appellants.


          An Appeal from the Circuit Court for Monroe County Lower Tribunal No. 09-822-K, David J. Audlin, Jr., Judge.

          Johnson, Anselmo, Murdoch, Burke, Piper & Hochman, P.A., and Michael T. Burke and Hudson C. Gill (Fort Lauderdale), for appellant/cross-appellee.

          Smith Oropeza, P.L., and Barton W. Smith and Ashley N. Sybesma, for appellees/cross-appellants. Before SALTER, EMAS, and LOGUE, JJ.


          LOGUE, J.

         This case comes before us on rehearing. We grant rehearing, withdraw our previous opinion, and issue this opinion in its stead.[1]

         Key West Golf Club Homeowners' Association, Inc. (Association), Key West Golf Club, LLC (Golf Course), and Key West HMA, LLC (Hospital) brought suit seeking a declaration that the City of Key West's stormwater utility fee was illegal as applied to their properties. After a bench trial, the court agreed and entered a judgment exempting the properties from future stormwater utility fees. We reverse.

         The undisputed record at trial reveals that the Association, Golf Course, and Hospital contributed to the need for the stormwater utility by discharging stormwater. They also benefited from both the stormwater utility's flood control and pollution control measures. While the trial court apparently found that the amount of the fee had no reasonable relationship to the benefits received, it considered only the costs of the flood control measures and failed to consider the substantial, City-wide stormwater anti-pollution services which comprise a large part of the stormwater management system at issue. In City of Gainesville v. State, 863 So.2d 138, 145 (Fla. 2003), the Florida Supreme Court upheld a method of establishing stormwater fees virtually identical to the method used here by the City. For these reasons, we hold that the City acted within its lawful authority by subjecting the properties to the stormwater utility fees.


         The State has authorized municipalities to create stormwater utilities in order to fund stormwater management. See §§ 403.0891, .0893, 163.3202(d), Fla. Stat. (2001). The purpose of these laws is to control flooding and to prevent pollution-the latter being deemed by the Legislature as "a menace to public health and welfare." See § 403.021(a). The need to mitigate the effects of stormwater discharge is particularly heightened in the municipality of Key West. It is part of the Florida Keys which the Legislature has designated "as an area of critical state concern" in order to, among other things, "[p]rotect and improve the nearshore water quality." § 380.0552 (2)(i) & (3), Fla. Stat.

         In 2001, the City established a stormwater utility as authorized by Chapter 403 of Florida Statutes. See Key West, Fla. Code § 74.365. One purpose of the utility was to improve "the water quality in the stormwater and surface water system and its receiving waters." Key West, Fla. Code § 74.362. Tracking the ordinance upheld in City of Gainesville, the fee at issue is based on the amount of impervious surface area, such as buildings and parking lots, on a property. A larger impervious surface area results in a higher utility fee because the larger such areas, the less stormwater is absorbed into the ground and the more stormwater is discharged. The ordinance exempts certain property, including property that retains its stormwater runoff.[2] The ordinance establishes a sliding scale for the amount of the utility fee based upon the amount of water retained on site.[3] The fees do not go into the general fund, but are segregated in a separate account dedicated to plan, construct, operate, and maintain the City's stormwater management system on a city-wide, unitary basis for present and future needs.

          In 2003, the City began billing the Association, Golf Course, and Hospital for the stormwater utility fee. In 2009, the Association, Golf Course, and Hospital filed suit against the City, essentially claiming that they received little or no benefit from the stormwater utility.

         The Association, Golf Course, and Hospital are located on Stock Island, which is immediately east of the island of Key West. Stock Island is bisected by U.S. Highway 1 (US 1). The portion of Stock Island north of U.S. 1 is within the municipal boundaries of the City of Key West. The main road providing access to the northern portion of Stock Island is College Road. College Road forms a horseshoe-shaped loop which generally runs along the water's edge on the perimeter of northern Stock Island. Each end of the loop intersects U.S. 1.

         Enclosed within the loop formed by College Road are all or part of the properties of the Association, Golf Course, and Hospital and also a tidal salt marsh. The submerged land under the salt marsh is largely owned by the City, although part is leased to the Golf Course and part is owned by the Hospital. The Association, Golf Course, and Hospital properties have injection wells, retention ponds, and catch basins. They stipulated, however, that the properties did not retain stormwater at levels that would qualify them for a fee exemption or reduction under the ordinance. Instead, they discharge stormwater into the salt marsh or Gulf. The water discharged into the salt marsh drains out to the Gulf of Mexico by means of seven culverts cut through College Road.

         At trial, the undisputed testimony of numerous witnesses was that without the seven culverts that allow the salt marsh to flow into the Gulf, the salt marsh would back up and the Association, Golf Course, and Hospital properties would flood. In addition, without the culverts and also the storm drains and outlets along College Road that divert stormwater coming onto the road into either the salt marsh or ...

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