Legal Updates for PA Municipal Liability
Legal Updates for Pennsylvania Municipal Law - September 2019
Supreme Court of Pennsylvania Overturns City’s Attempt to Collect “Maintenance Fee” from Public Utility
Local municipalities are faced daily with unique challenges that require them to test the limits of their authority. One such example comes from a recent decision of the Supreme Court of Pennsylvania in the matter of PP&L Electric Utilities v. City of Lancaster and Pennsylvania PUC, No. 55 MAP 2017 (Aug. 20, 2019). Lancaster is a city of the third class and a home rule municipality. In an effort to increase oversight and cover expenses for road maintenance and public services, the city enacted an ordinance that sought to impose municipal requirements on state-regulated utilities that use the city’s rights-of-way to deliver services. The ordinance included, among other provisions, imposition of an annual maintenance fee on the utility companies.
The regulation of public utilities has long been entrusted exclusively to state law. More specifically, administrative and regulatory oversight is vested in the Pennsylvania Public Utilities Commission (PUC). PP&L Electric Utilities is a public utility company governed by the PUC.
PP&L filed a petition for review with the Commonwealth Court, seeking declaratory and injunctive relief against the city. PP&L argued that the Pennsylvania Public Utilities Code vests exclusive regulatory authority in the PUC. In response, the city contended that the ordinance was duly enacted and consistent with its police powers granted to it by the legislature.
The Commonwealth Court agreed with PP&L and overturned most of the ordinance provisions. The court found that the PUC was the exclusive body for overseeing public utilities within the Commonwealth of Pennsylvania and that the City of Lancaster lacked specific statutory authority to impose administrative oversight beyond what the PUC mandates. However, the Commonwealth Court upheld the imposition of a “maintenance fee” as a reasonable regulation of a utilities’ use of local rights-of-way. Both parties appealed the Supreme Court of Pennsylvania.
The Supreme Court affirmed, in part, and reversed, in part, finding that the entire ordinance was preempted by state law, including the maintenance fee provision. The court ruled in favor of the PUC’s exclusive authority to regulate public utilities, which includes the imposition of regulatory fees. This precedential decision means that local governments are unable to impose additional administrative oversight or fees on public utility providers beyond what the PUC mandates. Moreover, municipalities are left bearing the burden of maintaining, at least in part, easements over, on and above utility lines. While the City of Lancaster may have had the best interests of its residents in mind when it passed the ordinance, this case serves as a prime example of state preemption over local governments.
In the Zone…An Update on Local Zoning Law
The primary purpose of a local zoning hearing board is a noble one: to ensure that zoning ordinances are followed and that property is utilized in the most efficient and appropriate way possible. At times, however, the limits of authority granted to a local zoning hearing board can be skewed. Take, for example, the matter of Sugarloaf Township v. Sugarloaf Township Zoning Hearing Board, 18-CV-8424 (Luzerne Cnty., Feb. 1, 2019).
A local property owner erected a fence on what he believed to be the boundary of his property. After some complaints by local residents to the township, the property owner was cited for illegally erecting a fence on a township right-of-way. The property owner appealed to the zoning hearing board, which, after taking evidence and hearing argument, granted the property owner a variance allowing the fence to stay where it was, even though it was erected partially on township property. The township then appealed the decision to the Luzerne County Court of Common Pleas and sought reversal of the board’s decision granting the variance. The court granted the appeal and overturned the board’s decision , finding that the zoning hearing board may not allow a trespass by calling it a variance. The board had exceeded its own limitations by essentially giving away township property.
This case should serve as a reminder to both municipalities and zoning boards that a variance can only be granted as to an applicant’s parcel of property and that zoning boards lack the authority to “give away” property. Zoning laws have no application to the resolution of real estate disputes between parties.
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