Arizona Court of Appeals Division One Holds That Municipalities Have No Duty To Provide Public Utility Services To Nonresidents Absent A Statutory Requirement or Contractual Undertaking.

The developers argued that the City had installed water and sewer lines immediately adjacent to the property and thus made it impossible for the developers to obtain service from any other provider.  The City moved to dismiss on the grounds that it had no contract to provide services to the property and therefore no legal duty to do so, even if its actions made it impossible for the developers to obtain services.  The superior court granted the motion to dismiss, and the developers timely appealed.

The Court of Appeals affirmed.  Municipalities cannot discontinue public utility services to nonresidents once they undertake to provide them, A.R.S. § 9-516(C), but they have no duty to provide the services unless required by a statute or a contractual obligation.  Building water and sewer lines adjacent to unincorporated property may make it possible for the City to provide services, but it does not constitute an undertaking that creates an obligation to do so.

The Court also rejected the developers’ use of Barbaccia v. County of Santa Clara, 451 F. Supp. 260 (N.D. Cal. 1978), in support of their contention that the City must provide services because its actions made obtaining alternative services impossible.  In Barbaccia the court held that a municipality “cannot hide behind the fiction that its power and responsibility stops at its borders” when it uses its governmental powers to block utility service to the unincorporated property.  However, Barbaccia involved a claim for an unconstitutional taking, which the developers had not alleged in this case, and in any even no authority supports the proposition that an improper taking permits the courts to compel a municipality to provide utility services to nonresidents.

Judge Brown authored the opinion; Judges Johnsen and Gemmill concurred.