Rogue Valley Sewer Services v. City of Phoenix

A franchise fee imposed upon a local government entity by ordinance of a municipality is permissible under the "home-rule" if the ordinance does not violate the state constitution, if it does not violate the criminal laws of the state, and if it is authorized by the municipality's charter; so long as the ordinance does not impose a duty on or impair the power of the local government entity.

Rogue Valley Sanitation (RVS) appeals a judgment affirming the trial court judgment in favor of the City of Phoenix (City). RVS challenges whether the trial court erred in deciding that the City had acted within its “home-rule” authority by imposing a 5% franchise fee on RVS, a sanitary authority with the status of a local quasi-municipality. RVS had provided sewer sanitation services to the City from 2004-2006 as part of an intergovernmental agreement. In 2006, residents of the City annexed the city into RVS’s service area. In 2010, the residents voted to pass an ordinance imposing the 5% franchise fee on RVS, which RVS challenged at trial, subsequently leading to this matter. RVS challenged the authority of the City to impose such a franchise fee under the “home-rule” authority, and, argued that even if the City did have the authority, the 5% franchise fee was unreasonable. The Court concluded that the franchise fee was permissible under the “home-rule” because: (1) it was authorized by the City’s charter; (2) the ordinance did not impose a duty on or impair the power of another governmental entity; and (3) the ordinance was not preempted by the state Constitution or other state statutes. The Court rejected the issue of reasonableness as unpreserved. Affirmed.