A recent complaint filed in the Superior Court of Fulton County (McKillips, et al. v. City of Atlanta, No. 2021cv345903) challenges the assessment of frontage-based solid waste fees by the City of Atlanta (the City) against multi-family and commercial properties. The complaint seeks a refund of these fees assessed by the City for the last five years and an injunction against collection of the fees.
The plaintiffs seek to represent a class consisting of all persons and entities owning real property in the City who have been assessed and paid frontage-based charges imposed under City Code § 130-84 (the Code). The complaint alleges that by the end of the 2021 fiscal year, owners of commercial and multi-family properties will have paid the City close to $80,000,000 in these fees. This action could open the door for owners of commercial and multi-family properties in the City to seek refunds for frontage fees and multi-family unit fees.
Frontage fees are mandatory annual fees that the City imposes on owners of commercial properties and owners of properties that have six or more residential units, whose property includes paved street frontage. These fees are associated with the collection of solid waste and the City assesses them pursuant to the Code.
Prior to April 2019, the amount of the mandatory frontage fee depended on the number of times street sweeping occurred in the area of the City in which the subject property is located. The City assessed $2.89 per foot of paved street frontage in areas where street sweeping occurred once a week and $7.60 in areas where street sweeping occurred three to six times each week.
Pursuant to an amendment to the Code in November 2018, the frontage fees assessed to owners of commercial and multi-family property would be based on location within so-called “Tier 1” or “Tier 2” areas of the City.
As of April 1, 2019, the City assesses properties located in Tier 1 areas frontage fees ranging from $1,000 (for up to 100 feet of paved street frontage) to $12,000 (for over 850 feet of paved street frontage). Tier 1 includes areas designated high and low density commercial; high, medium, and low density mixed-use; industrial; office/institutional; and office/institutional/residential. Tier 2 frontage fees range from $500 (for up to 100 feet of paved street frontage) to $6,000 (for over 850 feet of paved street frontage). Tier 2 includes establishments located outside the land use zones listed in Tier 1.
The City also imposes a mandatory “multi-family unit fee,” in addition to the frontage fee, on owners of units in multi-family developments that contain six or more units. This annual fee was $400 per unit following the November 2018 amendment and was changed to $63.69 following an amendment made in June 2019.
The complaint alleges the assessment of these fees is unlawful for several reasons:
(1) Street sweeping is not a service that is solely attributed to the solid waste produced by the properties adjacent to the street, but instead, its primary purpose is to remove litter produced by pedestrians and car occupants.
(2) Street sweeping occurs in areas that are not assessed a frontage fee following the November 2018 amendment.
(3) The fees cover expenses that are not associated with the “common good services” the City uses to justify the imposition of the fees.
(4) The City does not collect solid waste generated by the plaintiffs’ property or owners of similar properties. Rather, owners of such properties tend to have private contracts for solid waste collection.
(5) The amount the City is expected to collect in frontage fees ($28,000,940) greatly exceeds the reasonable cost of services for which the City justifies the assessment of such fees ($20,394,047).
(6) Funds collected through frontage fees and multi-family unit fees are not utilized for services associated with front footage.
For these reasons, the complaint argues that the fees are illegal taxes under Georgia Constitution Art. VII, § I, Para. III(a) and City Charter §6-101(g).
If class certification is achieved, owners of commercial property and multi-family property in the City who have been assessed and paid frontage fees could join this suit as class members. If unable to obtain class certification, similarly situated property owners could bring suit against the City seeking refunds for payments made for these frontage fees.
For more information about how frontage fees may affect your business, please contact a member of the MMM litigation group.