Argued: September 11, 2013
BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE BERNARD L. McGINLEY, Judge HONORABLE BONNIE BRIGANCE LEADBETTER, Judge HONORABLE ROBERT SIMPSON, Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ANNE E. COVEY, Judge
ROBERT SIMPSON, Judge
In this appeal of interest to counties and municipal authorities statewide, we are asked whether a municipal authority tasked with planning and implementing municipal waste disposal for Monroe County may set the "tipping fees" at private landfills. These fees cover disposal costs in the landfills as well as administrative costs and costs of other aspects of the county-wide waste disposal plan. Because the municipal authority does not own or operate the landfills which accept Monroe County's municipal waste, our inquiry is more complicated. While we agree with several arguments advanced by the Appellant, we affirm in part the decision of the Court of Common Pleas of Monroe County (trial court), which denied a declaratory challenge to a portion of the fee.
Monroe County Municipal Waste Management Authority (Authority), is a creation of the Municipality Authorities Act (Authorities Act), 53 Pa. C.S. §§ 5601-5623, and is delegated the responsibility for solid waste planning and plan implementation in Monroe County (County) under Section 303(d) of the Municipal Waste Planning, Recycling and Waste Reduction Act (Act 101). In this role the Authority develops and implements an Act 101 Waste Management Plan, which is eventually approved by the County and the Department of Environmental Protection (DEP).
Authority administers an Integrated Waste Management System through the Plan in which it requires: 1) that all waste haulers operating in the County are registered; 2) that waste haulers and municipalities provide waste stream reduction data; 3) that municipal solid waste generated in the County be disposed of at permitted waste disposal facilities with which the Authority has negotiated contracts; 4) initiatives for waste stream reduction, including operation and maintenance of the Authority's recycling facility and other community programs for recycling; 5) a litter control and highway deer carcass removal program; 6) a municipal police department which conducts enforcement and assists other law enforcement agencies in such duties; and, 7) the maintenance of staff, equipment, and facilities.
In Act 101, the General Assembly addressed the municipal solid waste industry in order to provide a comprehensive program of ensuring adequate planning and implementation of future disposal capacity as well as encouraging more recycling efforts. Act 101 requires counties to adopt a solid waste management plan and to submit the plan to DEP for approval. Act 101 requires that the counties revise the plan every 10 years. In order to secure DEP approval, the plan must provide for county-wide solid waste management and must ensure at least 10 years of available disposal capacity. The plan also designates those waste disposal facilities that are permitted by DEP under the Solid Waste Management Act (SWMA),  to receive municipal solid waste generated within the county.
In order to fulfill its obligations of securing disposal capacity, the Authority previously entered into contracts known as "Disposal Service Agreements" with privately-owned landfills. These Agreements obligate the landfill to accept a specified amount of solid waste generated in the County each year. The prior Disposal Service Agreements set the maximum price for the "tipping fee" that the landfill may charge the waste haulers. The "tipping fee" includes state-mandated fees set forth in Act 101 and other solid waste laws. The "tipping fee" may vary depending on the hauler, the time of year, market conditions, the volume of waste a particular hauler regularly delivers to the facility, the payment history of the hauler and whether or not the hauler pre-pays the "tipping fee."
The County's first Act 101 Plan was adopted in 1991, and it was revised in 1998. Pursuant to that Plan, the Disposal Service Agreements included a $7 per ton administrative fee to be collected by the landfill from waste haulers. The landfill then passed this cost on to the generator of the waste through customer billing.
In 2004, when revising the 1998 Plan, the Authority entered into Disposal Service Agreements with six landfills to provide for disposal capacity for County-generated waste through 2014. The Disposal Service Agreements negotiated in 2004 continued the requirement that the landfill remit the $7 per ton administrative fee for waste "tipped" at the facility. The administrative fee generated approximately $1 million dollars of revenue annually for the Authority. However, although the 2004 Act 101 Plan was approved by the County and submitted to DEP, it was never approved by DEP.
In 2010, DEP notified the Authority that it had not undertaken a "full and complete" 10 year revision of its Plan since 1998. DEP further warned that the administrative fees imposed on the disposal of County waste "may be preempted by Act 101." Reproduced Record (R.R.) at 244a. This is the genesis of the current controversy.
After the Authority appealed the letter to the Environmental Hearing Board, it entered into an agreement with DEP which extended the 1998 Plan through 2014 and required the Authority to submit a plan revision by June 30, 2013.
II. 2012 Requests for Proposals
Accordingly, in May 2012 the Authority issued a nationwide Request for Proposals (RFP) seeking bids from waste disposal facilities with sufficient capacity to accept all or part of County waste generated between the years 2015 and 2025. The Authority determined that the prior method of assuring disposal capacity was no longer adequate, that the Disposal Service Agreements did not guarantee disposal capacity, and that the Agreements did not make provisions for disposal capacity at competitive rates. It concluded that it would seek to purchase its own landfill capacity or "air space" from the landfills.
In a departure from its previous methods, the Authority proposed to enter into a Standard Purchase Agreement with the landfills in which the facility would sell to the Authority "an irrevocable license (legally an easement), to utilize available and permitted airspace solely for the disposal of Monroe County [municipal solid waste]" and that the Authority (and not the landfill owner) would set the "'tipping fee' to be charged to the waste haulers for the use of the Authority's reserved space the same as if the Authority administered its own disposal facility." Appellee's Br. at 12.
The Authority's "tipping fee" would have three components: 1) the cost of the purchased air space; 2) the operating costs of the landfill; and, 3) the costs of the operation of the Authority's Integrated Waste Management System. The third part of the "tipping fee" would be used to pay the Authority's debt service related to the capital costs of the Authority's facilities and the remaining debt from a failed incinerator project. These funds were previously generated from the Authority's $7 per ton administrative fee, but the legality of the fee was put in question by the DEP letter.
The RFP also provides that the Authority retains the right to use, sell or sell back any unused air space it purchased that remains at the end of the contract term, to the facility itself or "to another generator of municipal waste." R.R. at 21a, 35a. Finally, the RFP requires qualified waste disposal facilities to execute a "Standard Purchase Agreement, " by which the Authority will obtain a property interest to use designated air space at the facility. Only those facilities executing the Standard Purchase Agreement will be listed as a Designated Facility in the revised Plan, and only Designated Facilities will be permitted to accept County-generated municipal waste.
The Pennsylvania Waste Industries Association (Appellant) is a trade association of private landfill owners and operators and waste haulers doing business in Pennsylvania. In August 2012, Appellant commenced this action for declaratory judgment against the Authority. It challenged the Authority's power to set the "tipping fee" for waste disposal at privately owned facilities and to include in the "tipping fee" the costs of its Integrated Waste Management System and debt service. It argued setting the "tipping fee and including a non-disposal component was ultra vires the Authority's enabling legislation and was preempted by Act 101 and related solid waste laws. Appellant also challenged the Authority's current administrative fee on the same grounds.
At trial, the parties agreed to address only the issues related to the RFP, and they reserved the issue of the legality of the current administrative fee for a later time. The trial court issued an order denying Appellant's challenge to the Authority's proposed "tipping fee." The trial court opined that:
Here, the Authority seeks guaranteed space to dispose of municipal solid waste, and to charge reasonable fees to cover its expenses, by soliciting an RFP to acquire airspace. The Authority wants to acquire certain rights to land, by purchasing airspace above the land, at a waste disposal facility. The proposed RFP states the Authority would retain rights to the air space, which could presumably be sold back to the facility if not used. This Court finds that the purchase of the airspace is an interest in land that the Authority seeks to acquire, under [the Authorities Act] 53 Pa. C.S.A. [sic] §5607(a)(7), 5607(d)(4) and 5615(a).
The Authority also seeks to enter into contracts to conduct its business, which the [Authorities] Act allows. See 53 Pa. C.S.A. [sic] §5607(d)(13). Finally, the fees charged are for covering expenses allowed by the [Authorities] Act. See 53 Pa. C.S.A. [sic] [§]5607(d)(9). …
Tr. Ct., Slip Op., 1/11/13, at 4.
The trial court distinguished two cases relied upon by Appellant, IESI PA Bethlehem Landfill Corp. v. County of Lehigh, 887 A.2d 1289 (Pa. Cmwlth. 2005) (County of Lehigh) and Pennsylvania Independent Waste Haulers Ass'n v. County of Northumberland, 885 A.2d 1106 (Pa. Cmwlth. 2005) (County of Northumberland). Both cases held that municipal charges added to "tipping fees" were preempted by Act 101. The trial court determined both cases were confined to recycling fees under Act 101. Further, the trial court found that the contested fees did not include recycling fees, expressly accepting the Authority's evidence on the issue. As a result, those cases did not preclude the fees at issue here, and Act 101 did not preempt the fees.
Appellant also argued that the administrative fee caused the Authority to compete with private landfills, contrary to the limits on such competition in Section 5607(b)(2) of the Authorities Act, 53 Pa. C.S. §5607(b)(2). The trial court dismissed this assertion, finding the Authority's evidence of burden and interference unconvincing.
Appellant timely appealed to this Court. As to questions of law, our standard of review is de novo, and our scope of review is plenary. Middletown Twp. v. Cnty. of Delaware Uniform Constr. Code Bd. of Appeal, 42 A.3d 1196 (Pa. Cmwlth. 2012). As to issues of fact, we defer to the factual findings of the trial court. Recreation Land Corp. v. Hartzfeld, 947 A.2d 771, 774 (Pa.Super. 2008); see also Swift v. Dep't of Transp., 937 A.2d 1162, 1167 n.5 (Pa. Cmwlth. 2007).
Appellant raises two principle arguments. First, it contends that the Authority's "tipping fee, " as proposed in the RFP, is ultra vires the Authority's enabling legislation. In other words, the Authority is not empowered under either the Authorities Act or Act 101 to set "tipping fees" at facilities it does not own or operate.
Second, Appellant asserts that the Authority's "tipping fee, " as proposed in the RFP, is preempted by Act 101 and related solid waste laws. Allowing municipalities to impose their own local fees undermines a uniform system of standardized fees, applications and grants.
A. Authority for Setting Fees