The holding in the court’s own words
Construing the language of the charter liberally in favor of the city, as we must, and reading it as a whole, we conclude that the plain language of the city charter gives the PUC and the city council shared authority over the city’s utilities, including utility rates. We further conclude that the adoption of the flat-fee rate structure included in or dinance 122 does not violate the city charter. The city council did no t “set” any specific rates when it enacted this provision or otherwise infringe on the authority of the PUC under section 9. For these reasons, we conclude that no genuine issue of material fact precludes summary judgment with regard to any “illega l surcharge” claim based on section 9 of ordinance 122.
Quoted verbatim from the opinion — no paraphrase, nothing generated. Not yet human-reviewed. How we find the holding.
Cited by
- Moline Machinery, LLC, et al., Appellants, vs. City of Duluth, Respondent Minn. Ct. App. 2025
Authorities cited
Identified automatically; this list may not be exhaustive.
- 961 N.W.2d 220 not in our corpus
- 963 N.W.2d 164 not in our corpus
- Doe v. Archdiocese of Saint Paul & Minneapolis 817 N.W.2d 150
- City of Moorhead v. Minnesota Public Utilities Commission 343 N.W.2d 843
- In re Minnesota Power for Authority to Increase Rates for Electric Service in Minnesota 838 N.W.2d 747
- Firefighters Union Local 4725 v. City of Brainerd 920 N.W.2d 232
- 934 N.W.2d 101 not in our corpus
- 954 N.W.2d 584 not in our corpus
- Governmental Research Bureau, Inc. v. Borgen 28 N.W.2d 760
- American Family Insurance Group v. Schroedl 616 N.W.2d 273
- Bolen v. Glass 755 N.W.2d 1
- Thiele v. Stich 425 N.W.2d 580
- Crown Cork & Seal Co. v. City of Lakeville 313 N.W.2d 196
- A05-1200 not in our corpus
- 934 N.W.2d 347 not in our corpus
Opinion text
This opinion is nonprecedential except as provided by
Minn. R. Civ. App. P. 136.01, subd. 1(c).
STATE OF MINNESOTA
IN COURT OF APPEALS
A21-0680
Patti Amanda’s Inc.,
Appellant,
vs.
City of Biwabik, et al.,
Respondents.
Filed February 7, 2022
Affirmed
Cochran, Judge
St. Louis County District Court
File No. 69DU-CV-20-1352
John H. Bray, Bray & Reed, Ltd., Duluth, Minnesota (for appellant)
Shelley M. Ryan, Hoff Barry, P.A., Eden Prairie, Minnesota (for respondents)
Considered and decided by Bjorkman , Presiding Judge; Co nnolly, Judge; and
Cochran, Judge.
NONPRECEDENTIAL OPINION
COCHRAN, Judge
This appeal arises from appellant’s challe nge to rates charged for water and sewer
service provided to appellant’s rental property in the city of Biwa bik. Appellant argues
that the district court erred by granting su mmary judgment to respondents and against
appellant on appellant’s claim that respondents’ decision to charge a separate flat-fee base
2
rate for each apartment in appellant’s multi-unit building rather than a single flat-fee base
rate for the entire building results in rates that are “illegal.” We affirm.
FACTS
The following facts are undisputed. Appella nt Patti Amanda’s Inc. owns a rental
property in the city of Biwabik that contains five residential units and one commercial unit.
The building receives water and sewer services through a single connection to the main
line. Two commercial meters measure the wa ter, sewer, and electrical usage for all six
units—the units are not individually metered. In the past, appellant received one utility bill
each month that covered all six units. In January 2014, respondent Biwabik Public Utilities
Commission (the PUC) changed this practice and began billing appellant separately for
each unit. In addition to bein g separately billed, each unit is now charged a flat-fee base
rate along with the metered usage rate for each utility service.
Respondents city of Biwabik and the PUC (collectively, Biwabik) impose these
per-unit flat-fee base rates on all residential properties in the city. The per-unit flat-fee
base rates are intended to recover fixed costs such as the costs of building maintenance and
debt service. The per-unit flat-fee base rates are distinct from metered usage rates, which
separately recover the marginal costs of providing water and sewer service, such as the cost
of treatment chemicals and electricity. Acco rding to the city administrator, the per-unit
flat-fee base rates “keep the payment for services in line and in proportion with the service
provided.”
The per-unit flat-fee base rates imposed by Biwabik for its water and sewer service
reflect the rate structure set forth in the City of Biwabik ordinance 122. See Biwabik,
3
Minn., Code of Ordinances (BCO) no. 122, § 2, subds. 2-3 (2015). This ordinance governs
Biwabik’s water service and pr ovides that when multiple customers receive water from
one pipe connected to a service main, they will each “be billed separately by flat rate.” Id.,
subd. 2. In addition to imposing a flat-fee base rate on every resi dential property, the
ordinance also specifies that landlords of ap artment buildings will be charged the flat-fee
base rate for each apartment. Id., subd. 3. In practice, the utility rates charged by Biwabik
are periodically set by the PUC and then impos ed according to the ra te structure adopted
by the city council.
In April 2020, appellant initiated an action in district court, claiming that Biwabik
had imposed “illegal utility surcharges” on its pr operty. Appellant al so brought two tort
claims. Appellant sought an order from the district court “[ d]eclaring [the] surcharges to
be illegal” and damages in excess of $50,000.
In December 2020, the parties filed cr oss-motions for summary judgment.
Appellant argued that the flat-fee base rates set by the city council and charged to each unit
violated the city charter, city ordinance pr ovisions, and a state law that requires utility
charges to be proportionate, fair, and equitable. Appellant asserted that the per-unit flat-fee
base rates imposed on multi-unit dwellings we re unfair because they “subsidiz[ed] the
other residential customers of the [c]ity on the backs of its residential landlords and
similarly-situated businesses.” Biwabik argued, in turn, that the per-unit flat-fee base rates
comply with the terms of the city charter, city ordinances, and state law.
The district court granted summary judgment to Biwabik. The district court denied
appellant’s summary-judgment motion and found that appellant failed to present evidence
4
to support any of its claims. With regard to its “illegal surcharges” claim, the district court
concluded that appellant failed to provide any evidence that the rates exceeded statutory
authority or were unjust, unreasonable, or ineq uitable. Similarly, the district court also
found that appellant failed to provide evidence to support its tort claims.
This appeal follows.
DECISION
Appellant challenges the district court’ s grant of summary judgment to Biwabik
(and denial of summary judgme nt to appellant) on appellant’s claim that utility rates
charged by Biwabik are “illegal. ” Appellant does not challenge the district court’s
summary-judgment dismissal of the tort claims.
“We review a grant of summary judgment de novo.” City of Waconia v. Dock ,
961 N.W.2d 220, 229 (Minn. 2021). A district court must grant summary judgment if no
genuine issue of material fact exists and the moving party is entitled to judgment as a matter
of law. Minn. R. Civ. P. 56.01; Hagen v. Steven Scott Mgmt., Inc., 963 N.W.2d 164, 172
(Minn. 2021). To survive summary judgment, the nonmoving party must present specific,
admissible evidence that demonstrates a genuine issue of material fact. Doe v. Archdiocese
of St. Paul, 817 N.W.2d 150, 163 (Minn. 2012).
Appellant’s challenge to Bi wabik’s utility rates is limit ed to the per-unit flat-fee
base rates and does not extend to any metered usage rates. Even with regard to the per unit
flat-fee base rates at issue, appellant does not argue that any one specific rate is too high.
Rather, it challenges the adoption of the per-unit flat-fee rate structure and how the city
adopted the flat-fee base rates.
5
We generally accord substantial deferenc e to a decision of a government body
establishing utility rates where the government body is acting in a legislative capacity. See
City of Moorhead v. Mi nn. Pub. Utils. Comm’n , 343 N.W.2d 843, 846 (Minn. 1984)
(discussing deference granted to the Minn esota Public Utilities Commission when acting
in a legislative capacity). When a government body sets rates by “allocating costs between
utility customers and balancing various factors to achieve a fair and reasonable allocation
of these costs,” it operates in a legislative capacity. Id.; see also In re Application of Minn.
Power for Auth. to Increase Rates for Elec. Serv., 838 N.W.2d 747, 760 n.6 (Minn. 2013)
(stating that rate-design decisions—“the allocation of rates among various classes of utility
customers”—are considered a legislative function (quotation omitted)). We will uphold
an established rate system unless it is “shown to be in excess of statutory authority or
resulting in unjust, unreasonable, or discriminatory rates.” Moorhead, 343 N.W.2d at 846.
With the applicable standard of review in mind, we turn to the specific issues raised on
appeal.
I. The district court correctly concluded that Biwabik’s adoption of a flat-fee rate
structure did not violate the city charter.
Appellant first argues that Biwabik failed to comply with its ci ty charter when it
adopted the per-unit flat-fee rate structure and therefore the district court erred when it
granted summary judgment to Biwabik and ag ainst appellant on its “illegal surcharges”
claim. Specifically, appellant contends that the city char ter grants the PUC exclusive
authority to set utility rates an d that the city council imperm issibly encroached on that
authority when it took “actions to set and in crease the sewer and water rates.” Biwabik
6
responds that the city charter grants shared regulatory authority over utility rates to the city
council and the PUC. Biwabik further conten ds that the city coun cil acted within its
legislative authority granted under the city charter when it enacted ordinance 122, which
establishes a per-unit flat-fee rate structure. See BCO no. 122, § 2, subds. 2-3. The district
court agreed with Biwabik, concluding that the city charter “grants [the] PUC the authority
to set rates but does not grant it exclusive authority to do so.”
The issue raised by appellant with regard to the city charter presents a question of
statutory interpretation. City charters are interpreted according to the rules of statutory
construction. Firefighters Union Loc. 4725 v. City of Brainerd , 920 N.W.2d 232, 240
(Minn. App. 2018), aff’d on other grounds , 934 N.W.2d 101 (Minn. 2019). We review
questions of statutory construction de novo. State by Smart Growth Minneapolis v. City of
Minneapolis, 954 N.W.2d 584, 590 (Minn. 2021).
To interpret a city charter, we must ascertain and give e ffect to the intent of its
framers. Firefighters Union, 920 N.W.2d at 241. If the lang uage used in the city charter
is unambiguous, we apply its pl ain and ordinary meaning. See Governmental Rsch.
Bureau v. Borgen, 28 N.W.2d 760, 763 (Minn. 1947) (stating that if city charter language
“is unambiguous and clearly expressive of a de finite meaning or intent, there is no room
for construction, and the meaning or intent so expressed must govern”). A city charter is
unambiguous if its language “convey[s] a cert ain and specific meaning to the obvious
exclusion of other meanings.” Id. In determining whether a city charter is clear or
ambiguous, we read the document as a whole a nd “interpret each section in light of the
surrounding sections to avoid conflicting interpretations.” See Am. Fam. Ins.
7
Grp. v. Schroedl, 616 N.W.2d 273, 277 (M inn. 2000) (applying this principle to interpret
a Minnesota statute).
The City Charter
The city of Biwabik is a home-rule charter city. See Minn. Const. art. XII, § 4
(allowing “[a]ny local government unit . . . [to] adopt a home rule charter for its
government”). Its home-rule charter grants broad power to the city. See Biwabik, Minn.,
City Charter (BCC) (2021).
The charter provides that the city “sha ll have all powers which . . . may now or
hereafter be possible for a municipal corporation in this state.” Id. § 1.02.1 Included within
those powers is the power to legislate. See id.; Bolen v. Glass, 755 N.W.2d 1, 4-5 (Minn.
2008) (“The general rule is that, in matters of municipal concern, home rule cities have all
the legislative power possessed by the legislatur e of the state, save as such power is
expressly or impliedly withheld.”). The city charter further provides that it “shall be
construed liberally in favor of the [c]ity” and that “the sp ecific mention of particular
municipal powers in other sections of [the] charter does not limit the power of the [c]ity of
those thus mentioned.” BCC § 1.02. And, “[u]nless granted to some other officer or body,
all powers are vested in the [c]ity [c]ouncil.” Id.
1 We note that an updated city charter took effect on December 7, 2021. None of the
updates affect the provisions at issue in this case.
8
The city charter also includes language specifically addressing the roles of the city
and the PUC in providing utility service. Chapter 11 of the charter includes two relevant
sections, which provide the following:
Section 11.01 Acquisition a nd Operation of Utilities
The City may own and operate any water, gas, light, power,
heat, telephone, transportation or other public utility . . . .
Section 11.02 Regulation and Rates
The Biwabik Public Utilities [Commission] may fix rates,
fares, and prices for any muni cipal utility, prescribe the time
and manner of payment for such service, make other such
regulations as may be necessa ry, and prescribe penalties for
violation of such regulations. The Biwabik Public Utilities
[Commission] must report to the City Council and a public
hearing held before any rate increase.
Id. §§ 11.01-.02 (emphasis added). Section 2.07 also addresses utility service. It provides,
in relevant part, that the PUC “shall have the power to manage and operate
such . . . utilities as the [c]ity may own or acquire” and grants the PUC authority to set rates
to “meet the cost of production and transm ission of such [u]tilitie s consumed” but only
“[a]s allowed in [s]ection 11.02.” Id. § 2.07 (emphasis added).
Construing the language of the charter liberally in favor of the city, as we must, and
reading it as a whole, we conclude that the plain language of the city charter gives the PUC
and the city council shared authority over the city’s utilities, including utility rates. First,
section 11.01 of the city charter grants the city the authority to own and operate municipal
utilities. The next section, section 11.02, grants the PUC authority to operate and manage
those utilities for the city. Ta ken together, these sections provide for shared operational
authority between the city (or city council) and the PUC.
9
With regard to rates, section 11.02 provides that the PUC “may fix rates, fares, and
prices” but it also “ must report to the [c]ity [c]ouncil.” Id. § 11.02 (emphasis added).
Under the plain language of sec tion 11.02, the PUC is given th e discretion to “fix” rates.
Id. But those rates do not go into effect by action of the PUC alone. Rather, the PUC
“must report to the city council” first and “a public hearing [must be] held before any rate
increase.” Id. This language—that the PUC “must report to the city council”—necessarily
reflects shared authority over rates, with the PUC “fix[ing]” the rates and then reporting to
the city council for approval of the rates. This is the only reasonable interpretation of the
rate-making language contained in section 11.02, given that the charter must be construed
liberally in favor of the city and considering that the city owns the utilities and has shared
operational authority over the utilities with the PUC under the charter. Therefore, we agree
with the district court that the city charter authorizes the PUC to set rates but does not grant
it exclusive authority to do so.
Enactment of Ordinance 122
We further note that nothing in the charter precluded the city council from adopting
the flat-fee rate structure established in or dinance 122. This or dinance governs water
service. See BCO no. 122 (1989). In 2015, the city amended the ordinance to establish a
separately billed “fixed-rate fee” for water service to individual units within multi-unit
buildings. Id. § 2, subds. 2-3 (2015). Section 2 of the ordinance now provides, in relevant
part:
Subd. 2. Supply from one service. No more than one
house or building shall be supplied from one service
connection except by special permission of the city
10
representative and/or city co uncil. Whenever two or more
parties are supplied from one pi pe connection with a service
main, each building or part of a building shall be billed
separately by flat rate or indi vidual meters depending on the
plumbing the building will allow.
Subd. 3. Multi Units. Each residential unit or business
unit within a multi-re sidential or multi-business building will
be treated as a single family residential home or single
commercial business. If an apartment building or
condominium building has only one meter, each apartment or
condominium unit therein is cons idered the same as a single
family house. The landlord . . . will be charged for each
apartment or condominium unit the fixed-rate fee for single
family homes.
Id. (emphasis added). Ordinances are generally presumed valid. Bolen, 755 N.W.2d at 5.
2
By its terms, ordinance 122 does not fix any specific rates (i.e. dollar amounts).
Rather, it establishes a rate structure to be used by the PUC in fixing specific rates. In light
of the overlapping operational authority discussed above and the city’s broad retention of
legislative authority under the city charter, the city council properly exercised its legislative
authority when it adopted the per-unit flat-f ee rate structure included in section 2 of
ordinance 122.
In sum, the district court did not err when it concluded that the city charter “did not
grant sole authority to [the] PUC” to set utility rates. We further conclude that the adoption
of the flat-fee rate structure included in or dinance 122 does not violate the city charter. 3
2 Appellant does not argue that ordinance 122 is itself invalid, and counsel for appellant
acknowledged to the district court that the city’s method of charging per-unit flat-fee base
rates for utility access is not “per se illegal.”
3 Appellant also argues that s ection 5 of ordinance 122 conflic ts with the city charter and
that rates adopted under that au thority are therefore unlawful. See BCC no. 122, § 5
(stating that “each water user shall pay for wa ter used according to a rate schedule(s)
11
Accordingly, there is no basi s in the summary-judgment reco rd to support appellant’s
argument that Biwabik failed to comply with its own city charter.
II. Appellant’s argument that Biwabik faile d to comply with ordinance 122 does
not warrant reversal of the district court’s grant of summary judgment.
Appellant next argues that this court should reverse the grant of summary judgment
to Biwabik because “Biwabik’s actions [did] not comply with its own [c]ity [c]ode.”
Specifically, appellant argues that Biwabik faile d to comply with se ction 9 of ordinance
122. Section 9 provides, in relevant part, that the PUC “has jurisdiction over various areas
of this ordinance for the purposes of manage ment and rate setting a nd as such would be
substituted where the city council is now so designated.” BCO no. 122, § 9 (2015).
Appellant argues that this language means the PUC has exclusive authority over utility
rates and the city council violated section 9 when it “set the rates at issue in this case.” We
are not persuaded for two key reasons.
First, and foremost, appellant has presented no evidence to show that the city council
“set” any specific rate. The absence of such evidence from the record is not surprising. As
Biwabik notes in its brief, appellant has only challenged Biwabik’s rate structure, not any
particular flat-fee base rate. Therefore, th ere is no evidence in the record to support
appellant’s claim that the city council violated section 9 of ordinance 122 by setting rates
instead of the PUC.
established by resolution of th e city council”). We declin e to address this argument
because, as appellant conceded in oral argument before this court, section 5 applies only to
metered rates, not to the flat-fee base rates at issue here.
12
Second, to the extent that appellant conten ds that the city council “set” rates when
it adopted the per-unit flat-fee rate structure, that argument fails. The per-unit flat-fee rate
structure was adopted by the city council when it enacted ordinance 122 in its legislative
capacity. The city council did no t “set” any specific rates when it enacted this provision
or otherwise infringe on the authority of the PUC under section 9.
For these reasons, we conclude that no genuine issue of material fact precludes
summary judgment with regard to any “illega l surcharge” claim based on section 9 of
ordinance 122.
III. Appellant’s argument that Biwabik faile d to comply with public notice and
hearing requirements likewise does not warrant reversal of the district court’s
grant of summary judgment.
Appellant also argues that the per-unit fl at-fee base rates at issue here are void
because Biwabik did not comply with the procedural require ments for increasing rates.
Specifically, appellant asserts that Biwabik did not conduct public hearings or publish
notice of those hearings. See BCC § 11.02 (requiring that “a public hearing [be] held before
any rate increase”). Here again, Biwabik co unters that appellant does not challenge any
specific rate increase and therefore any applicable hearing and notice requirements are not
at issue. The district court agreed with Biwabik, stating that the “real crux” of appellant’s
argument was its objection to Biwabik’s method of charging flat-fee base rates for utility
services, not an objection to actual rates or any specific increase in existing metered rates.
Accordingly, it did not address appellant’s argument regarding the alleged procedural
violations in detail.
13
While appellant accurately points out that section 11.02 of the city charter requires
that “a public hearing [be] held before any rate increase,” the district court is correct that
appellant’s lawsuit does not challenge any sp ecific rate increases. Nowhere in its
complaint or in its summary-judgment pleadings does appellant reference any specific rate
increase.4 Therefore, the hearing require ment—and, by extens ion, any notice
requirement—is not at issue. Consequently , we decline to address this argument. See
Thiele v. Stich , 425 N.W.2d 580, 582-83 (Minn. 1988) (explaining that appellate courts
“may not consider matters not produced and received in evidence below”).
IV. Biwabik’s per-unit flat-fee utility rates do not violate Minn. Stat. § 444.075
(2020).
Lastly, appellant argues that Biwabik’s im position of a flat-fee base rate for each
apartment unit violates Minn. Stat. § 444.075 and, therefore, the district court erred by
granting summary judgment to Biwabik and against appellant. We are not convinced.
Section 444.075 authorizes municipalities to construct, maintain, and operate sewer
and water systems. Minn. St at. § 444.075, subd. 1a. Th e statute also authorizes
municipalities to impose “just and equitable charges” to pay for the construction,
maintenance, operation and use of the facilities. Id., subd. 3(a). The statute further permits
4 Appellant generally references seven rate increases in its brief but does not identify the
specific rate increases that it contends were approved. Nor does it identify when those rate
increases were approved. This lack of specificity reinforces the conclusion that appellant
is not challenging any specific ra te amount but instead is cha llenging the city’s selected
rate structure.
14
a municipality to impose three different types of charges to cover its costs: use, availability,
and connection. Id. The statute provides:
To pay for the construction, reconstruction, repair,
enlargement, improvement, or other obtainment, the
maintenance, operation and us e of the facilities, and of
obtaining and complying with permits required by law, the
governing body of a municipality or county may impose just
and equitable charges for the use and for the availability of the
facilities and for connections with them and make contracts for
the charges as provided in this section. The charges may be
imposed with respect to facilities made available by agreement
with other municipalities, countie s or private corporations or
individuals, as well as thos e owned and operated by the
municipality or county itself.
Id. (emphasis added). Case law establishe s that a municipality may “impose any
combination of use, availab ility and connection ch arges to finance mu nicipal sewer and
water facilities.” Crown Cork & Seal Co. v. City of Lakeville , 313 N.W.2d 196, 199
(Minn. 1981).
While charges for directly rendered serv ices must “be as nearly as possible
proportionate to the cost of furnishing the service,” those charges need not be exact. Minn.
Stat. § 444.075, subd. 3(b); see also Daryani v. Rich Prairie Sewer & Water Dist. ,
No. A05-1200, 2006 WL 619058, at *4 (Minn. App. Mar. 14, 2006) (stating that “perfect
equality in establishing a rate system is not expected, nor ca n quality be measured with
mathematical precision”), rev. denied (Minn. May 24, 2006).
5 Rather, such charges must
5 We note that Daryani is not a precedential opinion an d therefore not binding authority,
but it is persuasive in this context. See Minn. R. Civ. App. P. 136.01, subd. 1(c)
(establishing that nonprecedential opinions are not generally binding authority but may be
cited as persuasive authority).
15
be reasonable given “all costs of the establis hment, operation, maintenance, depreciation
and necessary replacements of the system, and of improvements, enlargements and
extensions necessary” to adequately serve the city, including any debt obligations. Minn.
Stat. § 444.075, subd. 3g.
Appellant argues that the flat-fee base rates charged by Biwabik for each apartment
in its multi-unit building do not meet these statutory requirements because they effectively
require multi-unit buildings to “subsidize” other users without linking the flat-fee base rates
to the city’s actual costs. In other words, appellant contends that the per-unit flat-fee base
rates are not proportionate to the cost of furn ishing service and are not just and equitable.
The district court rejected this argument, co ncluding that appellant failed to offer any
evidence that the per-unit flat -fee base rates established by Biwabik were inequitable,
unjust, or unreasonable. The di strict court also found that there was no evidence that the
per-unit flat-fee base rates violated any law. We agree with the district court’s conclusion
that there is no evidence in th e record to support appellant ’s argument that Biwabik’s
per-unit flat-fee base rates violate section 444.075.
First, as is apparent from the plain language of section 444.075, municipalities have
broad authority to establish different rate st ructures for sewer and water services. The
statute specifically authorizes a combination of use, availability, and connection fees. Id.,
subd. 3(a). Biwabik therefore operated within its authority by imposing a flat-fee base rate,
as part of its utility-rate structure, to recover costs associated with making sewer and water
services available to all users—including those who live in apartments.
16
Second, appellant’s argument that Bi wabik’s rate structure violates the
proportionality requirement of section 444.075 misses the mark. The statute does require
that charges for sewer and water “service rendered . . . be as nearly as possible
proportionate to the cost of furnishing the service.” Minn. Stat. § 444.075, subd. 3(b). The
term “proportionate” is a synonym for the term “proportional,” which means “[f]orming a
relationship with other parts or quantities” or being “[p]roperly related in size, degree, or
other measurable character istics; corresponding.” The American Heritage Dictionary of
the English Language 1413 (5th ed. 2018); see Hagen, 963 N.W.2d at 173 (stating that
when interpreting a statute containing undefine d terms, courts “may refer to dictionary
definitions to discern its plain meaning”). Applying that definition here, the proportionality
requirement necessarily app lies only to specific dollar amounts charged, because
proportionality to cost can only be determined by reference to a specific dollar amount.
But, as discussed above, appellant’s compla int does not challenge the imposition of any
specific dollar amount charged for sewer or water service. Likewise, appellant’s
summary-judgment filings do not challe nge any specific flat-fee base rate. 6 Rather,
appellant’s “illegal surcharges” claim is directed to the city’s per-unit flat-fee rate structure,
which imposes flat-fee base rates on each dwelling unit receiving water and sewer service.
6 Counsel for appellant asserted at oral argument before this court that the per-unit flat-fee
base rates are “excessive” per se because appe llant currently pays more than $500 per
month in flat-fee base rates for its six-unit re ntal property. Because appellant made this
argument for the first time at oral argument, we decline to consider it. See Getz v. Peace,
934 N.W.2d 347, 353 n.3 (Minn. 2019) (declining to address an argument made for the
first time on appeal during oral argument).
17
Therefore, the proportionality requirement of section 444.075 , subdivision 3(b), is not at
issue in this case.
Third, appellant has offered no evidence to show that Biwabik’s flat-fee rate
structure results in charges that are not “jus t and equitable.” Biwabik, on the other hand,
has provided evidence of its reasons for implementing the per-unit flat-fee base rates. The
city administrator explained that imposing fl at-fee base rates on all units ensures that all
units with access to the sewer and water systems contribute towards the cost of operating
and maintaining the systems. The city administrator further explained in affidavits and
through deposition testimony that the per-unit flat-fee base rates imposed were determined
by considering “the cost to run the [utility] sy stem as a whole.” Th is included the fixed
costs of building maintenance and debt service on financing for infrastructure
improvements obtained through a federal loan. The city administrator also testified that
the city consulted with utility experts at the Minnesota Rural Water Association to establish
the flat-fee base rates. Therefore, the dist rict court did not err when it concluded that
appellant “has failed to provide any evidence that the rate[s] . . . [are] unjust, unreasonable
or inequitable” or otherwise violate the law.
In sum, we affirm the district court’s grant of summary judgment to Biwabik and
denial of summary judgment to appellant. Because appellant failed to present any evidence
that Biwabik violated its city charter, its own ordinances, or Minn. Stat. § 444.075 by
adopting and implementing a per-unit flat-fee ra te structure, the district court properly
granted summary judgment on appellant’s “illegal surcharges” claim.
Affirmed.