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Town of Marana v. Pima County - 6/14/2012

Arizona Court of Appeals Division One Holds That Municipalities Have the Right To Provide Sewer Services and That Municipalities Must Get Specific Authority From Voters To Acquire A Particular Plant or Property From a Public Utility.


In 1979 the Town of Marana entered into an intergovernmental agreement (IGA) with Pima County for the construction and operation of sewage facilities for Marana. The IGA allowed either Marana or the county to terminate the agreement with six months’ notice with “ownership of all property relating to flow-through sewer facilities” remaining with the county and Marana retaining “the remainder of the sewer system . . . that is not a flow-through system.” In a 1988 special election in  Marana, voters authorized Marana to build and operate a “municipal wastewater and sewer system,” but Marana did not build a system and instead continued to rely on the sewer service provided by the county pursuant to the IGA.

On July 11, 2007 Marana gave six months’ notice to the county that it was terminating the IGA. Less than two weeks later, the county designated the Marana Wastewater Reclamation Facility (MWRF) and its surround area as a public park, thus preventing Marana from annexing the MWRF. Marana filed a complaint on October 17, 2007 in Pima County Superior Court seeking a declaratory injunction and special action relief allowing Marana to take possession of the MWRF and the rest of the Marana sewer facilities. On December 4, 2007, Marana enacted an ordinance purporting to annex the MWRF. On December 20, 2007, the Pima County Board of Supervisors filed a lawsuit challenging the annexation. The superior court consolidated the cases and granted Marana’s motion to transfer the venue to Maricopa County.

The trial court granted partial summary judgment in favor of the town finding 1) that the town’s 1988 special election had fulfilled the statutory requirement that Marana receive voter authorization to acquire and operate a sewer system; 2) that following termination of the IGA, Marana had the right to ownership of “non flow-through sewer system in the town”; 3) that without a valid IGA the county did not have authority to provide sewer service in Marana and that Marana had authority to provide such service. The court held an evidentiary hearing to determine which parts of the sewer system were “flow-through.” The court concluded that Marana was “entitled to receive transfer of all sewer lines” in Marana except for two sewer lines. The court then held a bench trial at which it determined that the MWRF was not part of the sewer facilities covered by the IGA, that the county’s designation of the MWRF and surrounding land as a park was proper, and that the town’s annexation of the MWRF was unlawful. Pima County and the Town of Marana both appealed.

The Court of Appeals affirmed “the superior court’s rulings that the Town has the paramount statutory authority to provide sewer service to its residents, the scope of the IGA did not encompass the MWRF, and the Town’s annexation of the area including the MWRF was invalid.” The court explained that Marana was statutorily authorized to cancel the IGA, that Marana “has the right to operate and maintain a sewer system to serve its residents,” and that the county did not have the power to compel Marana to accept the county’s sewer service. The court held that, under the terms of the IGA, Marana acquired all non flow-through sewer facilities when it canceled the IGA. Because Marana did not acquire the MWRF, however, the court also held that Marana did not have the authority to “offer wastewater treatment of its residents’ sewage, without first purchasing the MWRF from the County.” The court held that “the superior court did not err by finding that the County acted within its authority” in designating the MWRF and its surrounding land as a park and that Marana’s “subsequent annexation of the area, without approval from the County Board of Supervisors, was therefore defective and invalid.”

The court reversed the superior court’s decision that Marana’s 1988 special election had satisfied the statutory requirement that voters authorize a municipal sewer system. The court held that under A.R.S. § 9-514, the county was operating as a public utility by providing sewage services, and that the statute therefore required Marana’s voters to specifically authorize Marana’s acquisition of “a particular plant or property” and that the general authorization given in the 1988 special election was not enough to fulfill the statute’s requirements. The court deferred to the superior court’s factual findings and affirmed its findings that certain parts of the sewer “remained the County’s property upon termination of the IGA.”

Judge Hall authored the opinion; Judges Orozco and Gemmill concurred.

Posted by: James Rogers

Posted On: 7/6/2012