Can a city bill a state university (or other state agency) for stormwater utility fees, the way it bills any other property owner in town?
Plain-English summary
In August 1993, the City of Charlotte sent the University of North Carolina at Charlotte a $3,465.87 bill for stormwater runoff service fees under its newly enabled stormwater utility ordinance. The university asked the AG whether it had to pay. The AG answered no.
The statutory frame. NC's 1992 legislation amended Article 16 of Chapter 160A to add stormwater drainage to the list of municipal "public enterprises" cities can own and operate. G.S. 160A-311(10) defines public enterprises to include "structural and natural stormwater and drainage systems of all types." G.S. 160A-312 lets a city own and operate any listed public enterprise. G.S. 160A-314 lets the city set rates, fees, and charges for the public enterprise and collect them using "any remedy provided by law for collecting and enforcing private debts."
Why that does not reach the State. The doctrine of sovereign immunity has a corollary in statutory construction: statutes do not bind the State unless the legislature expressly says so. The AG cited State v. Taylor (1988), Yancey v. Highway and Public Works Commission (1942), and Rowan County Board of Education v. U.S. Gypsum Company (1992) for that rule. Article 16 of Chapter 160A does not anywhere say the State must pay a city's stormwater fee. So the rate schedule cannot be enforced against UNC-Charlotte.
The argument the City likely had in mind is that "any remedy for collecting private debts" is broad enough to reach the State. The AG rejected that because the State is not a private debtor and the statute does not say it is.
The voluntary-contract escape valve. The AG was not telling cities to give stormwater service away free. The statutes describe stormwater drainage as a "service" the city may provide to its citizens. So the city's operation of the system is an offer of services. The State (or any of its agencies) can accept that offer by contract, at which point the price is negotiable because the university's sovereign immunity prevents the city from imposing the ordinance fee on the State. If the State declines, the city can decline to serve, per Big Bear v. City of High Point (1977).
The practical result. UNC-Charlotte does not have to pay the bill. The city and the university can negotiate a contract for stormwater services if it makes sense for both. Either side can walk away. The same analysis applies to any other state agency in any other NC city that has stood up a stormwater utility.
Currency note
This opinion was issued in 1993. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
NC stormwater utility law has grown substantially since 1993. The General Assembly has amended Chapter 160A several times, and a wave of NC cities have stood up stormwater utilities with mandatory fee schedules. Some of the post-1993 amendments specifically address state-agency liability, university campuses, and federal facilities. As a research matter, the sovereign-immunity baseline established in this opinion still informs the analysis, but the specific outcome for state agencies depends on the present text of Chapter 160A and any local-act overrides. Anyone analyzing a current state-agency stormwater fee dispute should pull the statute and check whether the legislature has subsequently authorized state collection.
Common questions
Q: Why does the State get to skip a fee everyone else has to pay?
A: Because sovereign immunity is older than any modern utility statute. The general rule is that legislation does not bind the sovereign without an express statement. The legislature can change that result whenever it wants by simply saying "this article applies to the State and its agencies." Until it does, the State is outside the fee schedule.
Q: Could the City sue UNC-Charlotte for the $3,465.87?
A: Under the 1993 statutes, the AG would have said no, the city would lose. The rate schedule is not enforceable against the State because no statute makes it so. The city's remedies for "private debt" collection do not reach the State.
Q: Could the City decline to drain stormwater off UNC-Charlotte's property?
A: Yes, in principle. Big Bear v. City of High Point (1977) held that if a citizen refused to pay for city services, the city had the option of discontinuing service. The same principle applies to state agencies. As a practical matter, the city's stormwater system probably drains some campus runoff because of the way drainage works regardless of any contract. The voluntary-contract framework lets the parties bargain.
Q: What if the university uses the city's stormwater system anyway?
A: The AG opinion treats the city's operation of the system as an "offer" of service. If the university uses the service without a contract, there might be quantum-meruit-style arguments, but the AG's main point is that the rate schedule itself is not enforceable. A negotiated contract is the clean path.
Q: Does this apply to federal facilities too?
A: This opinion does not address federal facilities. The sovereign-immunity rule for federal property under state law is its own area governed by federal preemption doctrine. Cities have generally had a harder time billing federal property without congressional consent.
Q: What about state-owned hospitals, parks, or other state agencies?
A: The same rule. UNC-Charlotte is a state agency, and the AG's logic about "the State" applies to every other state-agency property owner. A city looking to bill a state agency in 1993 needed a contract.
Background and statutory framework
NC's stormwater utility statutes are part of the broader transformation of stormwater management from a public-works function into a fee-funded utility. The 1992 legislature added stormwater to the public-enterprises list in Chapter 160A so that cities could fund stormwater infrastructure through user fees the way they already funded water, sewer, and electric service. The City of Charlotte was among the first NC cities to stand up a stormwater utility under the new authority.
The sovereign-immunity question was foreseeable. Universities, state office buildings, prisons, highway facilities, and other state-agency properties sit inside every NC city. Without some way to bill them, the city is left absorbing a substantial drainage burden that benefits state property. With a rate schedule that cannot reach state agencies, cities have two choices: cross-subsidize state properties through private-property fees, or negotiate contracts with each agency.
The legislature's choice to authorize the public enterprise without expressly reaching state agencies is a default that hands the negotiating leverage to the State. State agencies under sovereign immunity can ignore the rate schedule and bargain for a contract price below the ordinance rate. The opinion does not characterize this result as good or bad; it simply describes what the statutory text permits.
Note: the NCDOJ index lists this opinion under a 1999 date, but the body text and the 1993 statutory references make clear the opinion itself is from September 27, 1993. The 1999 listing is likely a republication or index-rebuild artifact.
Citations
- N.C. Gen. Stat. ch. 160A, art. 16 (municipal public enterprises)
- N.C. Gen. Stat. § 160A-311 (list of public enterprises)
- N.C. Gen. Stat. § 160A-311(10) (stormwater systems included)
- N.C. Gen. Stat. § 160A-312 (authority to operate)
- N.C. Gen. Stat. § 160A-314 (rates, fees, collection)
- N.C. Gen. Stat. § 160A-314(a) (rates for use of or services from public enterprises)
- N.C. Gen. Stat. § 160A-314(a1) (stormwater rate variation by property characteristics)
- 1991 (Reg. Sess., 1992) N.C. Sess. Laws c. 944, s. 14 (stormwater amendment)
- State v. Taylor, 322 N.C. 433 (1988)
- Yancey v. Highway and Public Works Commission, 222 N.C. 106 (1942)
- Rowan County Board of Education v. U.S. Gypsum Company, 332 N.C. 1 (1992)
- Big Bear v. City of High Point, 294 N.C. 262, 268 (1977)
Source
Original opinion text
September 27, 1993
Mr. Bill Steimer
University Attorney
UNC-Charlotte
UNCC Station
Charlotte, NC 28223
Re: Advisory Opinion; State Agency Liability for Stormwater Service Fees; Chapter 160A, Article 16.
Dear Mr. Steimer:
The University of North Carolina at Charlotte (hereinafter "the University") has inquired whether it is legally obligated to pay bills which the City of Charlotte has presented for stormwater drainage. Based on our discussions and research, it is the opinion of this office that the University is not legally obligated to pay these bills.
In August of 1993, the City of Charlotte presented a bill for $3,465.87 to the University to cover stormwater runoff service fees. The City asserted that it had the right to charge the University that sum under a City ordinance adopted pursuant to authority granted the city under Article 16, Chapter 160A of the General Statutes as appended by 1991 (Reg. Sess., 1992) N.C. Sess. Laws c. 944, s. 14. The University's obligation to pay the bills depends upon an analysis of the City's authority under Article 16, Chapter 160A.
N.C. Gen. Stat. § 160A-312 authorizes a city to maintain, own and operate any of the "public enterprises" specified in N.C. Gen. Stat. § 160A-311. N.C. Gen. Stat. § 160A-311(10) provides that "(s)tructural and natural stormwater and drainage systems of all types" are included within the definition of "public enterprises." N.C. Gen. Stat. § 160A-314 authorizes cities which operate public enterprises to establish schedules for rates, rents, fees, charges and penalties for the public enterprises which it operates and to collect those fees by any remedy provided by law for collecting and enforcing private debts.
Although Article 16, Chapter 160A clearly grants the city the legal authority to operate a stormwater and drainage system and assess and collect fees from private entities, it does not provide a sufficient basis for such assessment and collections from State agencies. The doctrine of sovereign immunity and the rules of statutory construction related thereto generally provide that statutes do not apply to the State unless the legislature expressly declares its intent that the law apply to the State. See, State v. Taylor, 322 N.C. 433 (1988) and Yancey v. Highway and Public Works Commission, 222 N.C. 106 (1942); see also Rowan County Board of Education v. U.S. Gypsum Company, 332 N.C. 1 (1992). Article 16, Chapter 160A does not specifically authorize cities to assess or collect fees from the State for any public enterprises. Consequently, the statute alone provides no legal basis for the University's obligation.
The absence of express statutory authority to assess the University stormwater drainage fees does not preclude the city and the University from reaching some mutually agreeable solution for handling the University's stormwater runoff. A review of the several statutes included in Article 16, Chapter 160 reveals that the General Assembly clearly intended a city's construction, maintenance and operation of structural and natural stormwater drainage systems to be a service which it may provide to its citizens. For example, N.C. Gen. Stat. § 160A-312 provides that a city shall have authority to operate "all of the public enterprises defined in this article to furnish services to the city and its citizens." N.C. Gen. Stat. § 160A-314(a) provides that the city may establish fees "for the use of or the services furnished by any public enterprise." N.C. Gen. Stat. § 160A-314(a1) also provides that the rates "for providing structural and natural stormwater and drainage system service may vary according to [the characteristics of the property]." Thus, it is evident that the General Assembly intended the city's construction, operation and maintenance of structural and natural stormwater drainage systems to be a service it might provide to its citizens.
Given that the legislature intended the establishment, operation and maintenance of a stormwater and drainage system to be a service, it is our opinion that the city's operation of a stormwater and drainage system constitutes an offer such services to the University. The University could decide to accept the city's offer of drainage services and enter into a contract to pay for those services. Under those circumstances, the University would be free to negotiate the price for drainage services with the city because the University's sovereign immunity would prohibit the city from enforcing the ordinance establishing the fee schedule for drainage services against the University.
On the other hand, the University may choose to reject the city's offer of stormwater drainage services. In that case, the city would be under no obligation to provide stormwater drainage services to the University. See, Big Bear v. City of High Point, 294 N.C. 262, 268 (1977) (if a citizen did not wish to pay for city services, the city has the option to discontinue the services).
In summary, the University is under no present obligation to pay the bill the city has submitted for stormwater drainage services. However, if the University should decide that the city drainage services provide an economical means for disposing of the University's stormwater runoff, then the University may elect to contract with the city for those services.
Andrew A. Vanore, Jr.
Chief Deputy Attorney General
Thomas J. Ziko
Special Deputy Attorney General
R. Andy Giles
Assistant Attorney General