                                                                         FILED
                                                                   Sep 11 2019, 8:37 am

                                                                         CLERK
                                                                    Indiana Supreme Court
                                                                       Court of Appeals
                                                                         and Tax Court




ATTORNEYS FOR APPELLANTS                             ATTORNEYS FOR APPELLEE
J. Christopher Janak                                 L. Rachel Lerman
Paul D. Vink                                         Barnes & Thornburg LLP
Bradley M. Dick                                      Los Angeles, California
Bose McKinney & Evans LLP                            Nicholas K. Kile
Indianapolis, Indiana                                Barnes & Thornburg LLP
ATTORNEY FOR AMICI CURIAE THE                        Indianapolis, Indiana
NATIONAL ASSOCIATION OF HOME                         Kristi L. Fox
BUILDERS AND INDIANA BUILDERS                        Fox Law Offices, LLC
ASSOCIATION                                          New Albany, Indiana
Jason A. Lopp                                        ATTORNEYS FOR AMICI CURIAE
McNeely Stephenson                                   ACCELERATE INDIANA
New Albany, Indiana                                  MUNICIPALITIES AND INDIANA
                                                     MUNICIPAL LAWYERS, INC.
                                                     Douglas D. Church
                                                     Alexander P. Pinegar
                                                     Church Church Hittle & Antrim
                                                     Noblesville, Indiana



                                            IN THE

    COURT OF APPEALS OF INDIANA

Knob Hill Development LLC;                                 September 11, 2019
ASB LLC; RPO Construction,                                 Court of Appeals Case No.
Inc.; Written Builders LLC;                                18A-MI-2123
Appellants-Petitioners,                                    Appeal from the Floyd Superior
                                                           Court
        v.                                                 The Hon. Susan L. Orth, Judge




Court of Appeals of Indiana | Opinion 18A-MI-2123 | September 11, 2019                      Page 1 of 20
      Town of Georgetown, Indiana,                               Trial Court Cause No.
                                                                 22D01-1803-MI-307
      Appellee-Respondent.




      Bradford, Judge.


                                           Case Summary                    1



[1]   Knob Hill Development LLC; ASB LLC; RPO Construction, Inc.; and

      Written Builders LLC (“Builders”) are all real-estate developers who

      appeal from the trial court’s refusal to invalidate a 2018 ordinance passed

      by the Town of Georgetown (“the Town”) setting charges for new

      customers of the Georgetown Municipal Sewage Works (“the System”).

      Builders contend that the system development charge (“SDC”), a/k/a

      connection fee, in the ordinance is arbitrary, capricious, and contrary to law.

      Builders also contend that a provision of the ordinance that automatically

      increases the SDC 2% each year is contrary to law. Because we disagree with

      Builders’ first contention but agree with the second, we affirm in part, reverse in

      part, and remand with instructions.


                             Facts and Procedural History




      1
        We heard oral argument in this case on August 21, 2019, in the Court of Appeals courtroom in
      Indianapolis. We would like to commend all counsel on the high quality of their written and oral advocacy.




      Court of Appeals of Indiana | Opinion 18A-MI-2123 | September 11, 2019                         Page 2 of 20
[2]   Builders each own property that is or will be connected to the System, which

      was constructed in the early 1990’s and had its flow treated by the City of New

      Albany at the time. In 1994, the Town received approximately $3.8 million in

      grants (“the 1994 Grant”) and, in 1998, the federal government forgave

      approximately $1.25 million in loans to the Town (“the 1998 Loan

      Forgiveness”). In 2004, the Town adopted an ordinance to finance expansions

      to the System, which began charging SDCs per equivalent dwelling unit

      (“EDU”) upon connection. The SDCs were initially set at $2300 and $4800 per

      EDU for new in-town and out-of-town connections, respectively, to increase

      $100 per year after 2004.

[3]   In or around 2011, the Town determined that it should build its own treatment

      plant, which it did, with the plant having an initial capacity of 350,000 gallons

      per day. The Town received a $3.5 million grant pursuant to the American

      Recovery and Investment Act (“the ARRA Grant”) to fund construction of the

      treatment plant. In the years since, the Town has almost outgrown the plant’s

      original capacity and is in the process of expanding it to treat 700,000 gallons

      per day. The Town has devoted $3.1 million borrowed from the Indiana State

      Revolving Fund and over $900,000 in Town funds to the expansion. On

      February 20, 2018, the Town adopted Ordinance Nos. G-18-03 and G-18-04,

      which established monthly sewer user fees and new SDCs, respectively.

      Ordinance No. G-18-04 imposed a new SDC of $7140 per EDU for both in-

      town and out-of-town customers with the SDC to increase 2% each year.




      Court of Appeals of Indiana | Opinion 18A-MI-2123 | September 11, 2019   Page 3 of 20
[4]   On March 1, 2018, Builders filed a petition objecting to the rates and charges

      set in Ordinance Nos. G-18-03 and G-18-04. On June 19, 2018, the trial court

      conducted an evidentiary hearing. Doug Baldessari had advised the Town

      regarding the SDCs in Ordinance No. G-18-04 and testified at the hearing.

      Baldessari relied on the Water Environment Federation manual, “Financing

      and Charges for Wastewater Systems,” (“the WEF Manual”) which included

      the following guidance for setting SDCs:

              Increasingly, in response to the stated goal to charge new
              customers for the full cost of growth, and thereby avoid the
              subsidization of new customers by existing customers, many state
              laws allow utilities to implement a combined fee approach. This
              approach is rapidly gaining favor in many jurisdictions. It
              generally applies when the current system facilities could serve
              future customers and a portion of the wastewater capital
              improvement program is also related to growth. The combined fee
              approach includes two separate elements
                   (1) System reimbursement component. Includes a portion for
                       new customer to pay for an equitable share of existing
                       facilities.
                   (2) Incremental new capacity component (also referred to as
                       growth-related improvement component). Includes future
                       facilities that will be constructed to accommodate growth.
      Plaintiff’s Ex. 3 p. 192.

[5]   With this guidance in mind, Baldessari testified that he had used a combined

      method in which the new SDC would be determined by adding (1) the value of

      the utility divided by the number of existing EDUs to (2) the net cost per EDU

      to finance new development. Baldessari’s calculations, dated February 8, 2018,

      are shown below:



      Court of Appeals of Indiana | Opinion 18A-MI-2123 | September 11, 2019    Page 4 of 20
           GEORGETOWN (INDIANA) MUNICIPAL SEWAGE
                                    WORKS
          CALCULATION OF EQUIVALENT DWELLING UNITS
                       AND NET EQUITY PER EDU
        Equivalent Dwelling Unit - Current:

           Annual Operating revenues (12 months ended 10/31/17
           unaudited)
           Collection and treatment              $1,064,200
           Divided by l2 months                          12
           Monthly revenues                          88,683
           Divided by average residential bill
           (4,000 gallons per month)                  58.30
             Equivalent Dwelling Units - Current               1,521

        Existing System Equity
        Total estimated existing system
        equity at 12/31/17                                               $8,607,778
        Divided by existing number of
        Equivalent Dwelling Units (EDUs)                                     1,521
        Equity per existing EDU                                             $5,659

        [….]

              GEORGETOWN (INDIANA) MUNICIPAL SEWAGE
                                WORKS
              CALCULATION OF ESTIMATED COSTS PER EDU
                    TO SERVE NEW DEVELOPMENT
                        (Per Consulting Engineers)

        Capacity and Growth Projects

        Projects Necessary to Increase Capacity:
         Future WWTP Expansion (add 350,000 gpd)                         $3,000,000
         Future Upgrades to East Lift Station                               200,000
         Future Upgrades to West Lift Station                               200,000
         Future Upgrades to Misc. Small Lift Stations                       200,000


Court of Appeals of Indiana | Opinion 18A-MI-2123 | September 11, 2019           Page 5 of 20
                 Net cost of projects to serve new development                 3,600,000
                 Divided by estimated number of proposed EDUs (l)                  1,145

                   Net Cost Per EDU to Serve New Development                     $3,144

              [….]

                    GEORGETOWN (INDIANA) MUNICIPAL SEWAGE
                                   WORKS
                     SUMMARY OF CALCULATED CAPACITY FEES

              Equity per existing user                                           $5,659
              Net cost per EDU to serve new development                           3,144
               Calculated System Development Charge                              $8,803
               Rounded (Use)                                                     $8,800
               Current Fee - Inside Town 2018                                    $5,100
               Current Fee - Outside Town 2018                                   $7,140
               Proposed Fees - Inside and Outside Town                           $7,140
      Plaintiff’s Ex. 5 pp. 2–4.

[6]   When calculating the total value of the utility, Baldessari testified that grants

      given to a utility for the purposes of keeping rates down at the time, such as the

      1994 Grant, the 1998 Loan Forgiveness, and the ARRA Grant (collectively,

      “the Grants”), did not have to be left out. Baldessari testified that the SDC set

      by Ordinance G-18-04 “doesn’t make the inside-of-town customers pay for

      growth that they don’t share in[,]” Tr. Vol. II p. 91, and that leaving items such

      as the ARRA Grant out of the calculations would likely leave the Town short of

      the SDCs needed for growth-related improvements in the future. While

      Baldessari’s calculations indicated that the new SDC should be $8800, he

      ultimately recommended a new SDC of $7140 for all new users.



      Court of Appeals of Indiana | Opinion 18A-MI-2123 | September 11, 2019          Page 6 of 20
[7]   On August 13, 2018, the trial court (1) upheld Builders’ objection to Ordinance

      No. G-18-03 because it failed to specify the percentage rate differential between

      in-town and out-of-town users as required by Indiana Code section 8-1.5-3-8.1

      and (2) overruled Builders’ objection to Ordinance No. G-18-04 on the basis

      that the Town had a rational basis for setting the SDCs as they did. The

      Builders appeal, claiming that Ordinance No. G-18-04 is arbitrary, capricious,

      and contrary to law in setting the base SDC and violates due process because it

      provides for an automatic 2% yearly increase in the SDC.


                                  Discussion and Decision
[8]   Builders requested that the trial court enter findings of fact and conclusions of

      law pursuant to Indiana Trial Rule 52(A). (Appellants’ App. Vol. II p.41.). In

      such cases, our standard of review is two-tiered. In re Paternity of B.M., 93

      N.E.3d 1132, 1135 (Ind. Ct. App. 2018). “First, we determine whether the

      evidence supports the findings, and second whether the findings support the

      judgment.” Id. “The trial court’s findings and conclusions will be set aside only

      if they are clearly erroneous.” Id. “In reviewing the trial court’s entry of special

      findings, we neither reweigh the evidence nor reassess the credibility of the

      witnesses.” Id. “Rather we must accept the ultimate facts as stated by the trial

      court if there is evidence to sustain them.” Id. “Conclusions of law are

      reviewed de novo.” 11438 Highway 50, LLC v. Luttrell, 81 N.E.3d 261, 265 (Ind.

      Ct. App. 2017), trans. denied.

[9]   As the Indiana Supreme Court recognized some time ago,




      Court of Appeals of Indiana | Opinion 18A-MI-2123 | September 11, 2019    Page 7 of 20
               rate-making is a legislative, not a judicial function, and even if a
               statute attempted to lodge such power in a court it would be
               unconstitutional. Although we have a constitutional system of
               government in which the judiciary is said to be supreme in
               determining the jurisdiction and limits on the powers of the other
               branches of the government, as fixed by the constitution and laws,
               yet this supremacy does not extend to the point where we may
               substitute our judgment for, or control the discretionary action of
               the executive or legislative branches, so long as their action is
               within the sphere and jurisdiction fixed by the statutes and
               constitution.
       Pub. Serv. Comm’n v. City of Indpls., 131 N.E.2d 308, 312 (Ind. 1956).

[10]   It is well-settled that we will invalidate a rate-making ordinance only if it is

       arbitrary, capricious, or contrary to law. Bd. of Dirs. of Bass Lake Conservancy

       Dist. v. Brewer, 839 N.E.2d 699, 701 (Ind. 2005). We will find a municipal

       entity’s legislative action arbitrary or capricious only if it is “patently

       unreasonable.” S. Gibson Sch. Bd. v. Sollman, 768 N.E.2d 437, 441 (Ind. 2002).

       “Judicial review of whether a governmental agency has abused its rulemaking

       authority is highly deferential[,]” Ind. High Sch. Athletic Ass’n, Inc. v. Carlberg, 694

       N.E.2d 222, 234 (Ind. 1997), and we “will not intervene in a local legislative

       process[if it is] supported by some rational basis.” Borsuk v. Town of St. John,

       820 N.E.2d 118, 122 (Ind. 2005). “A court is not permitted to substitute its own

       judgment for the municipality’s discretionary authority; it may only determine

       whether the municipality is acting within its statutory authority.” Bass Lake

       Conservancy Dist., 839 N.E.2d at 701 (citation omitted).




       Court of Appeals of Indiana | Opinion 18A-MI-2123 | September 11, 2019        Page 8 of 20
[11]   “A municipality may […] acquire, construct, improve, operate, and maintain

       sewage works under this chapter[.]” Ind. Code § 36-9-23-2. As for setting rates,

       Indiana Code subsection 36-9-23-25 provides, in part, as follows:

               [T]he municipal legislative body shall, by ordinance, establish just
               and equitable fees for the services rendered by the sewage works,
               and provide the dates on which the fees are due.
                    [….]
                    (d) The municipal legislative body may use one (1) or more of
                    the following factors to establish the fees:
                        (1) A flat charge for each sewer connection.
                        (2) The amount of water used on the property.
                        (3) The number and size of water outlets on the property.
                        (4) The amount, strength, or character of sewage discharged
                        into the sewers.
                        (5) The size of sewer connections.
                        (6) Whether the property has been or will be required to pay
                        separately for any part of the sewage works.
                        (7) Whether the property, although vacant or unimproved,
                        is benefited by a local or lateral sewer because of the
                        availability of that sewer. However, the owner must have
                        been notified, by recorded covenants and restrictions or
                        deed restrictions in the chain of title of the owner’s property,
                        that a fee or assessment for sewer availability may be
                        charged, and the fee may reflect only the capital cost of the
                        sewer and not the cost of operation and maintenance of the
                        sewage works.
                        (8) The cost of collecting, treating, and disposing of garbage
                        in a sanitary manner, including equipment and wages.
                        (9) The amount of money sufficient to compensate the
                        municipality for the property taxes that would be paid on




       Court of Appeals of Indiana | Opinion 18A-MI-2123 | September 11, 2019        Page 9 of 20
                        the sewage works if the sewage works were privately
                        owned.
                        (10) Any other factors the legislative body considers
                        necessary.
       Ind. Code § 36-9-23-25.

[12]   Of note, it is undisputed that the System is not subject to the jurisdiction of the

       Indiana Utility Regulatory Commission (“IURC”). “Nothing in the case law

       or in the applicable statutes mandates a certain type of rate-making method for

       municipal utilities that have removed themselves from the jurisdiction of the

       IURC.” In re City of Clinton Water Works Rate Schedule Adopted Sept. 9, 1997, 707

       N.E.2d 807, 810 (Ind. Ct. App. 1999), trans. denied. “Indeed, when a municipal

       utility removes itself from that jurisdiction, […] the IURC’s authority is

       replaced by local control.” Id. (citing Stucker Fork Conservancy Dist. v. IURC, 600

       N.E.2d 955, 959 n.9 (Ind. Ct. App. 1992)). Utilities that are not subject to

       IURC jurisdiction are not limited to methodologies generally accepted by the

       IURC when setting rates. See id. (“Thus, we conclude that the City in support

       of its rate increase was not limited to methodologies generally accepted by the

       IURC.”).

[13]   Builders contend that (1) the 2018 SDC is arbitrary and capricious because it

       took into account the Grants and previously-paid SDCs, (2) the methodology

       for calculating the 2018 SDC violates relevant Indiana case law, and (3) the

       2018 SDC impermissibly provides for an automatic yearly increase without a

       hearing on each increase.




       Court of Appeals of Indiana | Opinion 18A-MI-2123 | September 11, 2019    Page 10 of 20
                         I. Whether the 2018 SDCs Included
                       Improper Costs Passed on to New Users
[14]   Builders contend that including the Grants and previously-paid SDCs in the

       total value of the utility when calculating the 2018 SDCs was arbitrary,

       capricious, and contrary to law. The Town argues that it was appropriate to

       include those items when calculating the total value of the utility.

                                               A. The Grants
[15]   Builders argue that inclusion of the Grants in the calculations of the 2018 SDCs

       was arbitrary and capricious. Specifically, Builders argue that including the

       Grants in the calculations (1) is essentially a double recovery for the Town and

       (2) conflicts with Indiana law because the grants are not “costs” that can passed

       on to users of new connections.

[16]   As for Builders’ double-recovery argument, inclusion of the Grants is a method

       of determining the value of the utility for purposes of calculating the equity

       portion of the combined method for setting the SDC, a method which

       Baldessari testified was appropriate. While it is true that a higher total value for

       the System results in a higher SDC using the combined method, Baldessari

       testified that this was not double payment. Baldessari testified that requiring

       new customers to pay for all of the new plant, as well as putting them on an

       equal equity footing with existing customers, constitutes “paying their fair

       share” and is consistent with the WEF Manual. Tr. Vol. II p. 80. The trial

       court was entitled to credit this expert testimony and did, a decision we will not

       second-guess. See, e.g., Hopkins v. State, 579 N.E.2d 1297, 1303–04 (Ind. 1991)



       Court of Appeals of Indiana | Opinion 18A-MI-2123 | September 11, 2019   Page 11 of 20
       (“Any battle of qualified experts, as in the instant case, or other conflict as to

       the reliability of evidence is to be resolved by the trier of fact, whose finding in

       this regard will be upheld on review as long as the favorable evidence

       adequately supports it, as with any sufficiency question.”) (citations omitted).

[17]   As for Builders’ argument that Indiana law stands for the proposition that the

       Grants are not costs that can be passed on to the new customers, they cite to

       Indiana Code subsection 36-9-23-25(e), which provides that

               [t]he municipal legislative body may exercise reasonable discretion
               in adopting different schedules of fees, or making classifications in
               schedules of fees, based on variations in:
                    (1) the costs, including capital expenditures, of furnishing
                    services to various classes of users or to various locations; or
                    (2) the number of users in various locations.
[18]   Builders argue that the Town is impermissibly making new customers pay the

       Town for the Grants while exempting existing customers, claiming that this is

       not a valid variation in the cost of furnishing service that can justify the 2018

       SDC. This argument is little more than a variation on the double-payment

       argument, and, as mentioned, Baldessari opined that including the grants in the

       connection-fee calculation was not considered double payment. We conclude

       that including the Grants when calculating the 2018 SDC did not violate

       Indiana Code section 36-9-23-25(e).

                                  B. The Previously-Paid SDCs
[19]   Builders argue that the approximately $1.26 million in previously-paid SDCs

       were contributions in aid of construction (“CIAC”) and should not have been




       Court of Appeals of Indiana | Opinion 18A-MI-2123 | September 11, 2019          Page 12 of 20
       used to calculate the 2018 SDC. The Town, however, argues that the

       previously-paid SDCs were properly considered revenue, not CIAC, and were

       therefore rightfully included in the calculations. The Town also argues that any

       requirement that SDCs must be treated as CIAC only applies in cases governed

       by the IURC, which all agree has no jurisdiction in this case.

[20]   “CIAC has been described as ‘donations provided at no cost to the utility.’

       CIAC may come from state or local governments, customers, or developers as

       incentives to upgrade utilities to accommodate larger customers without

       burdening existing customers.” Ind. Office of Util. Consumer Counselor v. Lincoln

       Utils., Inc., 834 N.E.2d 137, 143 (Ind. Ct. App. 2005) (citation omitted), trans.

       denied. In support of their argument that previously-paid SDCs must be treated

       as CIAC, Builders cite to Indiana Code subsection 8-1-2-6(b), which provides

       that, in general, “no account shall be taken of construction costs unless such

       costs were actually incurred and paid as part of the cost entering into the

       construction of the utility” when valuing a utility. Builders also cite to several

       cases in which it was held that previously-paid SDCs were CIAC and could not

       be used in calculating future SDCs. Section 8-1-2-6, however, only applies to

       utilities under the jurisdiction of the IURC, and all of the cases arose in contexts

       governed by the IURC. As mentioned, it is undisputed that the System is not

       subject to the jurisdiction of the IURC. Consequently, the law relied upon by

       Builders does not stand for the proposition that the Town must abide by the

       same restriction.




       Court of Appeals of Indiana | Opinion 18A-MI-2123 | September 11, 2019   Page 13 of 20
[21]   That said, Builders also argue that Baldessari’s testimony that previously-paid

       SDCs are not CIAC was unsupported by any authority. Baldessari, however,

       testified that previously-paid SDCs were not considered CIAC for municipally-

       owned utilities like the System and that “the WEF [Manual] even states that

       that’s generally considered that they’re user charges.” Tr. Vol. II p. 50.

       Baldessari’s reliance on the WEF Manual to support his conclusion on this

       point was not challenged at the hearing. Again, Builders are requesting that we

       reweigh the evidence on this point, which we will not do. See Hopkins, 579

       N.E.2d at 1303–04.

           C. Whether Imposing an SDC that Places the Burden of
           Improvements on New Users is Contrary to Indiana Law
[22]   Builders also argue that imposing an SDC that does not spread the burden of

       improvements to current System users is contrary to Indiana law. Builders rely

       on one non-IURC case to support this argument, Common Council of City of

       Crown Point, Lake Cty. v. High Meadows, Inc., 173 Ind. App. 138, 362 N.E.2d

       1166 (Ind. Ct. App. 1977). In High Meadows, landowners challenged the city’s

       ordinance which sought to increase fees charged to connect to the city’s sewer

       system. Id. at 138, 362 N.E.2d 1167. The trial court sustained the challenge.

       Id. On appeal, we noted that while municipal sewage connection charges were

       not necessarily limited to recoupment of the cost of the inspection and the

       actual work performed, the charges levied under the ordinance in question

       exceeded the city’s statutory authority. Id. at 139, 362 N.E.2d 1166, 1167.

       Specifically, we concluded that although the city could have established a

       connection rate or charge that included amounts to be used for future


       Court of Appeals of Indiana | Opinion 18A-MI-2123 | September 11, 2019   Page 14 of 20
       improvements to the system, such charges could not have been levied only

       upon new users when there was an established group of users of the same

       system who would not have been subject to the charges. Id. at 143, 362 N.E.2d

       1166, 1169.

[23]   As the Town points out, however, High Meadows was based on statutes which

       have been superseded by subsequent legislation, including the Home Rule Act,

       as recognized by more recent judicial analysis. In the 1998 case of Taylor v. Fall

       Creek Regional Waste District, 700 N.E.2d 1179 (Ind. Ct. App. 1998), trans. denied,

       we recognized that the statute at issue in High Meadows, former Indiana Code

       section 19-2-5-20, afforded less discretion to sewage utilities than the one at

       issue in Fall Creek, Indiana Code section 13-26-11-2(a), which applies to

       regional sewage utilities, was enacted in 1996, and allows the utility to

       determine rates based on a number of factors, including “(7) A combination of

       these or other factors that the board determines is necessary to establish

       nondiscriminatory, just, and equitable rates or charges.”

[24]   A few years after High Meadows was decided, the General Assembly replaced

       Indiana Code sections 19-2-5-19 through -21 with Indiana Code section 36-9-

       23-25, the statute at issue in this case. As was the case with the statute at issue

       in Fall Creek, section 36-9-23-25 provides a municipality with more discretion

       than section 19-2-5-20 afforded. Indeed, subsection 36-9-23-25(d) allows even

       more discretion to municipalities than subsection 13-26-11-2(a) does to regional

       authorities, as the municipal legislative body may use one or more of several




       Court of Appeals of Indiana | Opinion 18A-MI-2123 | September 11, 2019    Page 15 of 20
       listed factors, including “[a]ny other factors the legislative body considers

       necessary.”

[25]   Moreover, High Meadows predates the Indiana Home Rule Act, enacted in 1980.

       High Meadows was decided pursuant to the so-called “Dillon Rule,” which

       presumed that local governments possess only those powers expressly

       authorized by statute.

               Like many other states, Indiana historically adhered to the Dillon
               Rule that a municipal corporation could exercise only the
               following powers:
                    First, those granted in express words; second, those
                    necessarily or fairly implied in, or incident to, the powers
                    expressly granted; third, those essential to the declared
                    objects and purposes of the corporation—not simply
                    convenient, but indispensable.
               Tippecanoe Cnty. v. Ind. Mfr.’s Ass’n, 784 N.E.2d 463, 465 (Ind.
               2003) (citing Dillon, Municipal Corporations (1st ed. 1872)
               (emphasis in original)). A corollary rule of construction required
               that a court resolve any reasonable doubt concerning the existence
               of a power against the corporation and enjoin the corporation
               from exercising it. See id.
               Under the Dillon Rule, a person who simply found himself on the
               wrong side of some local action could easily challenge that action
               by essentially arguing that it was ultra vires. See, e.g., City of S. Bend
               v. Chicago, S.B. & N.I. Ry. Co., 179 Ind. 455, 458, 101 N.E. 628, 629
               (Ind. 1913) (“[T]he charter of South Bend delegated no power for
               the enforcement of the ordinance in controversy….”). The
               resulting legal landscape handcuffed municipal corporations,
               preventing them from taking a wide range of governmental actions
               we might find commonplace today. See, e.g., Pittsburgh, C., C. & St.
               L. Ry. Co. v. Town of Crown Point, 146 Ind. 421, 45 N.E. 587 (1896)
               (town could not enforce ordinance requiring railroad to post



       Court of Appeals of Indiana | Opinion 18A-MI-2123 | September 11, 2019        Page 16 of 20
               watchmen and maintain gates at crossings at railroad’s expense
               because statute authorizing ordinances to prevent nuisances did
               not provide so specifically).
               Recognizing the disadvantages of the Dillon Rule, the Legislature
               abrogated it in 1971, when it passed the Indiana Powers of Cities
               Act. Act of April 14, 1971, P.L. 250–1971, § 1, 1971 Ind. Acts
               955, 967. The Legislature expanded the applicability of this
               reforming principle in 1980, when it passed the Indiana Home
               Rule Act. Act of February 27, 1980, P.L. 211–1980, § 1, 1980 Ind.
               Acts 1657, 1659–62 (codified as amended at Ind. Code §§ 36-1-3-1
               to -9 (2007)). In addition to reaffirming the abrogation of the
               Dillon Rule, the Home Rule Act provides that in general, a unit is
               presumed to possess broad powers of local government, unless the
               Indiana Constitution or a statute expressly denies the unit that
               power, or expressly grants it to another entity. Ind. Code § 36-1-3-
               5 (2007)[.]
       Kole v. Faultless, 963 N.E.2d 493, 495–96 (Ind. 2012). Since 1980, then, the

       presumption has been that any doubt as to the existence of a power “shall be

       resolved in favor of its existence.” Ind. Code § 36-1-3-3(b).

[26]   Given the greater discretion granted to the Town by Indiana Code subsection

       36-9-23-25(d), along with the presumption that a municipality is presumed to

       have a power that has not been expressly taken away, we conclude that High

       Meadows no longer stands for the broad proposition that the burden of future

       growth in a sewer system cannot be placed primarily on new users. It seems to

       us that when the Town was deciding what the 2018 SDC would be, planning

       for future growth easily qualifies as “[a]ny other factor[] the legislative body

       considers necessary.” Ind. Code § 36-9-23-25(b)(10).




       Court of Appeals of Indiana | Opinion 18A-MI-2123 | September 11, 2019    Page 17 of 20
                               II. Annual Increase in the SDC
[27]   Finally, Builders contend that the automatic yearly 2% increase in the SDC in

       Ordinance No. G-18-04 violates Indiana law. Indiana Code section 36-9-23-26

       provides, in part, as follows:

               (a) After the introduction of the ordinance establishing fees under
               section 25 of this chapter, but before it is finally adopted, the
               municipal legislative body shall hold a public hearing at which
               users of the sewage works, owners of property served or to be
               served by the works, and other interested persons may be heard
               concerning the proposed fees.
               [….]
               (b) After the hearing, the municipal legislative body shall adopt the
               ordinance establishing the fees, either as originally introduced or
               as modified.
               [….]
               (d) The municipal legislative body may change or readjust the fees
               in the same manner by which they were established.
       As the Indiana Supreme Court has recognized, the statute requires that “a

       municipal legislative body must hold a public hearing before revising sewer

       rates.” Farley Neighborhood Ass’n v. Town of Speedway, 765 N.E.2d 1226, 1231

       (Ind. 2002).

[28]   We have little trouble concluding that Builders are correct on this point. The

       2% annual increase in the SDC is a revision of a fee, one that occurs without a

       public hearing. The Georgetown Town Council, even though it passed only

       one ordinance, is nonetheless revising the fee each year without a hearing. “If

       there is a constitutional or statutory provision requiring a specific manner for

       exercising a power, a unit wanting to exercise the power must do so in that


       Court of Appeals of Indiana | Opinion 18A-MI-2123 | September 11, 2019   Page 18 of 20
       manner.” Ind. Code § 36-1-3-6. So, the Georgetown Town Council may only

       “change or readjust the fees in the same manner by which they were

       established[,]” Indiana Code section 36-9-23-26(d), i.e., following a public

       hearing. We conclude that the automatic 2% annual increase in the SDC in

       Ordinance No. G-18-04 violates Builders’ due process rights and is invalid.

[29]   The Town argues, without reliance on authority, that the Builders’ challenge to

       the automatic increase in the SDC should be rejected as speculative because the

       Town could enact a new ordinance at some point in the future. The Town also

       argues that the automatic-increase clause is not yet ripe for review because it set

       the 2018 SDC lower than Baldessari’s original proposed SDC and it will take

       several years of automatic increases for the SDC to reach that figure. We find

       neither of these arguments to be compelling. Put simply, whether there may be

       a new ordinance in ten years or whether Builders should count themselves

       lucky that the SDC was not set higher in the first place are things that have

       nothing to do with whether the Town has the authority to revise the SDC

       without a hearing, which it does not.


                                                Conclusion
[30]   We conclude that the base SDC set by Ordinance No. G-18-04 is neither

       arbitrary, capricious, nor contrary to Indiana law. Ordinance G-18-04’s

       automatic 2% yearly increase in the SDC, however, violates relevant Indiana




       Court of Appeals of Indiana | Opinion 18A-MI-2123 | September 11, 2019   Page 19 of 20
       law because it provides for a fee increase without a hearing. 2 It is not disputed

       that one such automatic increase has already occurred, so we remand with

       instructions for the trial court to enjoin the Town from collecting the additional

       2% unless and until an increase in the SDC has been approved and enacted

       following a public hearing.3

[31]   The judgment of the trial court is affirmed in part and reversed in part, and we

       remand with instructions.


       Altice, J., and Tavitas, J., concur.




       2
         Our disposition of the claim regarding the automatic increase has no effect on the other provisions of
       Ordinance No. G-18-04. “If any section of this code now enacted or subsequently amended or its application
       to any person or circumstances is held invalid, the invalidity does not affect other sections that can be given
       effect without the invalid section or application.” GEORGETOWN, IND., CODE OF ORDINANCES § 10.06(A).
       3
        In addition to nine enumerated powers (which do not include ordering an injunction), Indiana Rule of
       Appellate Procedure 66(C)(10) empowers us to “grant any other appropriate relief” in disposing of an appeal.




       Court of Appeals of Indiana | Opinion 18A-MI-2123 | September 11, 2019                           Page 20 of 20
