## Facts

- In 1954, voters adopted a plan creating the Metropolitan St. Louis Sewer District (MSD) to operate an integrated sewer system for the City of St. Louis and much of St. Louis County.
- MSD is governed by a six-member board and is authorized to levy ad valorem taxes and establish sewer-service charges.
- MSD served roughly 420,000 accounts; only about 9,000 properties did not use the system and did not pay the charge.
- The disputed charge was largely a flat, periodic charge (often quarterly) imposed on most residential customers without measuring or pricing actual wastewater volume.
- After adoption of the Hancock Amendment, MSD increased sewer charges without voter approval in 1985 (successfully challenged), later obtained voter approval for a subsequent increase, and then increased charges again in 1990 without submitting the increase to voters.
- Rate-paying residents sued to declare the 1990 increase invalid under Mo. Const. art. X, § 22(a) and sought injunctive and refund relief.

## Issues

1. Whether MSD’s sewer charges are “taxes, licenses or fees” under Mo. Const. art. X, § 22(a), requiring voter approval before the charges may be increased.

## Decision

- The Missouri Supreme Court (en banc) reversed the trial court and remanded.
- The court held MSD’s sewer charges fall within art. X, § 22(a) as “fees” and therefore cannot be increased without prior voter approval.
- The court directed entry of a declaration that MSD’s charges are subject to art. X, § 22(a).

## Legal Principles

- Under Mo. Const. art. X, § 22(a), political subdivisions may not increase “taxes, licenses or fees” above the prior year’s level without voter approval.
- Whether a charge is a “true user fee” (outside § 22(a)) is determined by a fact-specific analysis, including whether the charge:
  - Is imposed on a voluntary, particularized user rather than broadly on the public;
  - Is proportionate to, or dependent on, the amount of service used rather than a flat exaction unrelated to usage;
  - Is tied to providing a specific, optional service rather than serving as a general revenue measure for public infrastructure; and
  - Reflects meaningful user choice rather than an effectively unavoidable charge for basic utility service.
- A broadly imposed, near-universal, flat periodic sewer charge untethered to individualized usage has the characteristics of a revenue exaction subject to § 22(a).
- When classification of an exaction as a user fee versus a § 22(a) “tax, license or fee” is reasonably debatable, doubts are resolved in favor of voter control.

## Conclusion

The court held that MSD’s largely flat, near-universal sewer charge is a “fee” within Mo. Const. art. X, § 22(a), so increases in the charge require prior approval by the district’s voters.


Beatty v. Metro. St. Louis Sewer Dist., 867 S.W.2d 217 (Mo. banc 1993)