| Matter of Shellard v Town Bd. of the Town of Queensbury |
| 2010 NY Slip Op 01567 [70 AD3d 1288] |
| February 25, 2010 |
| Appellate Division, Third Department |
| In the Matter of Frederick J. Shellard et al., Appellants, v TownBoard of the Town of Queensbury et al., Respondents. |
—[*1] Miller, Mannix, Schachner & Hafner, L.L.C., Glens Falls (Leah Everhart of counsel), forTown Board of the Town of Queensbury, respondent. Bartlett, Pontiff, Stewart & Rhodes, P.C., Glens Falls (Mark A. Lebowitz of counsel), forTop of the World Utililty Company, Inc., respondent.
McCarthy, J. Appeal from a judgment of the Supreme Court (Aulisi, J.), entered July 6, 2009in Warren County, which dismissed petitioners' application, in a combined proceeding pursuantto CPLR article 78 and action for declaratory judgment, to review a determination of respondentTown Board of the Town of Queensbury approving an increase in sewer rates.
Respondent Top of the World Utility Company, Inc.[FN*](hereinafter respondent) is a corporation that provides sewer service to a townhouse complex inthe Town of Queensbury, Warren County. The complex was approved to contain up to 170residential units, but currently has 69 built units, a sports complex, golf course and restaurant.Petitioner Frederick J. Shellard owns one of the townhouses in the complex and petitioner Top ofthe World Homeowners' Association, Inc. (hereinafter the Association) represents the owners ofall built units in the [*2]complex. Respondent informed theAssociation and respondent Town Board of the Town of Queensbury that it intended to increasethe sewer rates it charges. The Board discussed the issue at a workshop meeting, with petitionersand respondent present and participating. Both sides then submitted proposals to the Board byletter. At a regular meeting, the Board approved a resolution increasing the rate from $320 to$640 per unit. Petitioners commenced this combined declaratory judgment action and CPLRarticle 78 proceeding seeking, among other things, to annul the Board's resolution. SupremeCourt dismissed the petition/complaint. Petitioners appeal.
Initially, a rate-making decision is deemed a legislative act rather than an administrative one,rendering it reviewable through a declaratory judgment action rather than a CPLR article 78proceeding (see Matter of Lakeland Water Dist. v Onondaga County Water Auth., 24NY2d 400, 407-408 [1969]; Salem Hills Sewage Disposal Corp. v Village ofVoorheesville, 80 AD2d 479, 480 [1981]). Thus, the CPLR article 78 proceeding wasappropriately dismissed.
The Board adhered to the statutory requirements for approving a change in the sewer rate.Pursuant to statute and the offering plan for the complex, respondent was obligated to providesewer service at "fair, reasonable and adequate rates" agreed to between it and the Board(Transportation Corporations Law § 121). "Rates shall be reviewable at intervals of notmore than five years or at any time by petition of the corporation or motion by the localgoverning body on written notice after a period of ninety days. The petition of a corporationshall be determined within ninety days of its filing, and in the event a determination is notrendered within such period of time, the petition shall be deemed approved" (TransportationCorporations Law § 121). The statute's use of the word "petition" does not require averified petition such as is necessary to commence a legal proceeding; the letter fromrespondent's president was a sufficient request for the Board to act. As the statute does notexplicitly require a hearing, and even permits a rate increase to become effective by mereinaction, no formal hearing was required.
Despite a hearing not being required, the Board discussed the issue at two public meetingsand permitted interested parties to speak and submit written responses or proposals. The Boardwas not limited to considering information raised only at Board meetings, but could considerother information it received. Although the Board did not mention petitioners' alternativeproposal, that proposal actually suggested a higher per-unit rate of $660, albeit with the rateapplied to the 101 undeveloped units as well. Units upon which a residence could potentially bebuilt are not disposing of anything into the sewer system, so it was reasonable to apply the sewercharges only to those units actually capable of currently using the system (cf. Matter ofHeritage Hills Sewage Works Corp. v Town Bd. of Town of Somers, 54 AD3d 673, 674[2008]). Considering the lack of increases for over 20 years, plus financial data showing thatrespondent would be operating the sewer system at a loss even after the rate increase, the newrate appears fair, reasonable and adequate (see Transportation Corporations Law §121).
Petitioners' contention that the Board violated the Open Meetings Law (see PublicOfficers Law §§ 103, 104) is not preserved for our review, and is also not supportedby the record.
Supreme Court dismissed the petition/complaint, but did not issue a declaration as isrequired in a declaratory judgment action (see CPLR 3001). We therefore declare thatthe Board's resolution setting respondent's sewer rates is valid.[*3]
Cardona, P.J., Peters, Rose and Kavanagh, JJ., concur.Ordered that the judgment is modified, on the law, without costs, by declaring valid the July 8,2008 resolution adopted by respondent Town Board of the Town of Queensbury setting sewerrates for respondent Top of the World Utility Company, Inc., and, as so modified, affirmed.
Footnote *: The corporation's proper nameis apparently Top O' the World Sewer Company, Inc.