{
  "id": "nexus-sen-1-0034-558131",
  "citation": "Res. 00402-2011 Tribunal Contencioso Administrativo Sección III",
  "section": "nexus_decisions",
  "doc_type": "court_decision",
  "title_es": "Nulidad de tarifas de acueducto municipal por omitir aprobación de ARESEP",
  "title_en": "Nullity of municipal water rates for lack of ARESEP approval",
  "summary_es": "El Tribunal Contencioso Administrativo, Sección III, anuló los acuerdos del Concejo Municipal de Tarrazú que fijaron nuevas tarifas para el servicio de acueducto, por violar el procedimiento legal. El Concejo aprobó un aumento tarifario (147% en servicio fijo, 91% en medido) con base en un estudio del IFAM, pero sin solicitar la aprobación definitiva de la Autoridad Reguladora de los Servicios Públicos (ARESEP) ni publicar el proyecto para consulta, como lo exige el artículo 3 de la Ley Constitutiva del AyA. El Tribunal rechazó el argumento de autonomía municipal plena, recordando que es relativa y está sujeta a coordinación interinstitucional. Señaló que la fijación de tarifas de acueductos municipales requiere estudio del IFAM, consulta al AyA y aprobación final de la ARESEP, y que la omisión de estos pasos vicia de nulidad absoluta el acto. También observó que los réditos proyectados excedían el 10% autorizado por el artículo 74 del Código Municipal para algunos años. Se ordenó reponer el procedimiento conforme a derecho.",
  "summary_en": "The Administrative Contentious Tribunal, Section III, annulled the Tarrazú Municipal Council agreements that set new water utility rates for violating the legal procedure. The Council approved a rate increase (147% fixed, 91% metered) based on an IFAM study, but without requesting final approval from the Public Services Regulatory Authority (ARESEP) or publishing the proposal for comment, as required by Article 3 of the AyA Constitutive Law. The Tribunal rejected the argument of full municipal autonomy, recalling it is relative and subject to inter-institutional coordination. It held that setting municipal water rates requires an IFAM study, consultation with AyA, and final ARESEP approval; failing these steps renders the act absolutely null. It also noted that projected returns exceeded the 10% authorized by Article 74 of the Municipal Code for some years. It ordered the procedure to be redone lawfully.",
  "court_or_agency": "Tribunal Contencioso Administrativo Sección III",
  "date": "21/10/2011",
  "year": "2011",
  "topic_ids": [
    "_off-topic"
  ],
  "primary_topic_id": "_off-topic",
  "es_concept_hints": [
    "acueducto municipal",
    "ARESEP",
    "IFAM",
    "tarifa por servicio público",
    "principio de legalidad",
    "nulidad absoluta"
  ],
  "article_citations": [],
  "keywords_es": [
    "tarifas de acueducto",
    "nulidad absoluta",
    "procedimiento tarifario",
    "ARESEP",
    "IFAM",
    "autonomía municipal relativa",
    "servicio al costo",
    "Tarrazú",
    "recurso de apelación",
    "jerarquía impropia"
  ],
  "keywords_en": [
    "water rates",
    "absolute nullity",
    "rate-setting procedure",
    "ARESEP",
    "IFAM",
    "relative municipal autonomy",
    "cost of service",
    "Tarrazú",
    "appeal",
    "improper hierarchy"
  ],
  "excerpt_es": "Sin lugar a dudas, los vicios de nulidad del acuerdo venido en alzada existen, en el tanto se ha violentado el procedimiento legal previsto para tales efectos, explicado en líneas atrás, en el tanto el Concejo Municipal, mediante el acuerdo venido en alzada procedió, de manera independiente, a disponer de las nuevas tarifas, sin solicitar la aprobación definitiva del órgano responsable al efecto. Además, dichas tarifas fueron acordadas sin haber sido puestas previamente en conocimiento de los interesados mediante la publicación del proyecto que ordena el artículo 3 de la Ley Constitutiva del Instituto Costarricense de Acueductos y Alcantarillados -transcrito supra-, a efecto de que se pronunciaran, evidenciándose, con ello, otro vicio insubsanable que da mérito, a la luz del artículo 182.1 de la Ley General de la Administración Pública, para acoger los agravios expresados en este sentido y ordenar la nulidad de todo lo actuado, debiendo reponerse los procedimientos de rigor, con ajuste a la Ley.",
  "excerpt_en": "Without a doubt, the nullity defects of the appealed agreement exist, insofar as the legal procedure provided for this purpose has been violated, as explained above, in that the Municipal Council, through the appealed agreement, independently proceeded to set the new rates without requesting the final approval of the responsible body. Moreover, said rates were agreed without having previously been brought to the attention of interested parties through the publication of the project as ordered by Article 3 of the Constitutive Law of the Costa Rican Institute of Aqueducts and Sewerage — transcribed above — so that they could comment, evidencing another irremediable defect that warrants, in light of Article 182.1 of the General Public Administration Law, accepting the grievances expressed in this regard and ordering the nullity of everything acted upon, having to redo the proper procedures in accordance with the Law.",
  "outcome": {
    "label_en": "Nullity declared",
    "label_es": "Nulidad declarada",
    "summary_en": "The Tribunal annulled the Tarrazú Municipal Council agreements setting new water rates due to procedural defects in omitting ARESEP approval and draft publication, and ordered the procedure to be redone lawfully.",
    "summary_es": "El Tribunal anuló los acuerdos del Concejo Municipal de Tarrazú que fijaron nuevas tarifas de acueducto por vicios procedimentales al omitir la aprobación de ARESEP y la publicación del proyecto, y ordenó reponer el procedimiento conforme a derecho."
  },
  "pull_quotes": [
    {
      "context": "Considerando VII",
      "quote_en": "there is no doubt that with regard to setting tariff schemes for water utility charges, there is special legislation of priority application that prevails, such that local corporations retain relative autonomy to set such prices, requiring, under the legal system, to coordinate efforts with the Institute for Municipal Development and Advisory and the endorsement of the Public Services Regulatory Authority.",
      "quote_es": "no queda duda de que en lo referente a la designación de esquemas tarifarios para el cobro de servicios de acueductos, existe normativa especial de aplicación prioritaria que prevalece, de modo que las corporaciones locales mantienen esa autonomía relativa par la fijación de tales precios, requiriendo, de acuerdo con el ordenamiento jurídico, coordinar esfuerzos con el Instituto de Fomento y Asesoría Municipal y el aval de la Autoridad Reguladora de los Servicios Públicos."
    },
    {
      "context": "Considerando VII",
      "quote_en": "the setting of rates for public water and sewerage services, including drinking water (…) would henceforth be set by said autonomous institution [ARESEP], without any differentiation as to which entity was in charge of providing them.",
      "quote_es": "la fijación de las tarifas de los servicios públicos de acueducto y alcantarillado, incluyendo agua potable (…) serían fijadas en adelante por dicha institución autónoma [ARESEP], sin hacer diferenciación alguna de cuál era el ente encargado de brindarlos."
    },
    {
      "context": "Considerando IX",
      "quote_en": "An overcharge of this nature can cause an overprice to fall on the service user that is beyond any legal authorization, making the service more expensive above the permitted legal margins, transferring it unjustifiably to the user.",
      "quote_es": "Un cobro en exceso de este tipo, puede hacer que recaiga en el usuario del servicio un sobreprecio que está fuera de toda habilitación legal, haciendo encarecer el servicio por encima de los márgenes legales permitidos, trasladándolo de manera injustificada al usuario."
    }
  ],
  "cites": [
    {
      "id": "norm-37097",
      "citation": "Ley 2726",
      "title_en": "Organic Law of the Costa Rican Institute of Aqueducts and Sewers",
      "title_es": "Ley Constitutiva del Instituto Costarricense de Acueductos y Alcantarillados",
      "doc_type": "law",
      "date": "14/04/1961",
      "year": "1961"
    },
    {
      "id": "norm-26314",
      "citation": "Ley 7593",
      "title_en": "Public Services Regulatory Authority Law",
      "title_es": "Ley de la Autoridad Reguladora de los Servicios Públicos (ARESEP)",
      "doc_type": "law",
      "date": "09/08/1996",
      "year": "1996"
    },
    {
      "id": "norm-40197",
      "citation": "Ley 7794",
      "title_en": "Municipal Code",
      "title_es": "Código Municipal",
      "doc_type": "law",
      "date": "30/04/1998",
      "year": "1998"
    },
    {
      "id": "norm-13231",
      "citation": "Ley 6227",
      "title_en": "General Law of Public Administration",
      "title_es": "Ley General de la Administración Pública",
      "doc_type": "law",
      "date": "02/05/1978",
      "year": "1978"
    },
    {
      "id": "norm-5561",
      "citation": "Ley 4574",
      "title_en": "Municipal Code",
      "title_es": "Código Municipal",
      "doc_type": "law",
      "date": "04/05/1970",
      "year": "1970"
    }
  ],
  "cited_by": [
    {
      "id": "nexus-sen-1-0007-158355",
      "citation": "Res. 05445-1999 Sala Constitucional",
      "title_en": "Reaffirmation of municipal autonomy and its limits regarding legality control",
      "title_es": "Reiteración de autonomía municipal y sus límites frente al control de legalidad",
      "doc_type": "constitutional_decision",
      "date": "14/07/1999",
      "year": "1999"
    },
    {
      "id": "norm-26314",
      "citation": "Ley 7593",
      "title_en": "Public Services Regulatory Authority Law",
      "title_es": "Ley de la Autoridad Reguladora de los Servicios Públicos (ARESEP)",
      "doc_type": "law",
      "date": "09/08/1996",
      "year": "1996"
    },
    {
      "id": "norm-37097",
      "citation": "Ley 2726",
      "title_en": "Organic Law of the Costa Rican Institute of Aqueducts and Sewers",
      "title_es": "Ley Constitutiva del Instituto Costarricense de Acueductos y Alcantarillados",
      "doc_type": "law",
      "date": "14/04/1961",
      "year": "1961"
    },
    {
      "id": "norm-5561",
      "citation": "Ley 4574",
      "title_en": "Municipal Code",
      "title_es": "Código Municipal",
      "doc_type": "law",
      "date": "04/05/1970",
      "year": "1970"
    }
  ],
  "references": {
    "internal": [
      {
        "target_id": "norm-37097",
        "kind": "concept_anchor",
        "label": "Ley 2726  Art. 3"
      },
      {
        "target_id": "norm-26314",
        "kind": "concept_anchor",
        "label": "Ley 7593  Art. 5"
      },
      {
        "target_id": "norm-40197",
        "kind": "concept_anchor",
        "label": "Ley 7794  Art. 13"
      },
      {
        "target_id": "norm-13231",
        "kind": "concept_anchor",
        "label": "Ley 6227  Art. 182"
      }
    ],
    "external": []
  },
  "source_url": "https://nexuspj.poder-judicial.go.cr/document/sen-1-0034-558131",
  "tier": 2,
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    {
      "doc_id": "norm-26314",
      "norm_num": "7593",
      "norm_name": "Ley de la Autoridad Reguladora de los Servicios Públicos (ARESEP)",
      "tipo_norma": "Ley",
      "norm_fecha": "09/08/1996"
    },
    {
      "doc_id": "norm-37097",
      "norm_num": "2726",
      "norm_name": "Ley Constitutiva del Instituto Costarricense de Acueductos y Alcantarillados",
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      "norm_fecha": "14/04/1961"
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    {
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      "norm_num": "4574",
      "norm_name": "Código Municipal",
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  "body_es_text": "CED78424\n\nN° 402-2011\n\nTRIBUNAL CONTENCIOSO ADMINISTRATIVO. SECCIÓN TERCERA. II CIRCUITO JUDICIAL DE SAN JOSÉ. Goicoechea, a las diez horas cinco minutos del veintiuno de octubre del dos mil once. \n\n Conoce este Tribunal, como jerarca impropio, del recurso de apelación interpuesto por Partido Tarrazú Primero, representado por Nombre102551 , cédula de identidad número CED78425; contra el acuerdo definitivamente aprobado No. 8 del Concejo Municipal de Tarrazú, tomado en la sesión ordinaria No. 033-2010, celebrada el 15 de diciembre del 2010. \n\nRedacta la Juez Solano Ulloa, y: \n\nCONSIDERANDO: \n\nI.- HECHOS PROBADOS. Para una correcta resolución del presente asunto, se tiene por probado lo siguiente: 1) Que el señor Jesús Solís Sánchez, funcionario del Instituto de Fomento y Asesoría Municipal, elaboró una propuesta de recalificación de tarifas del acueducto municipal de Tarrazú, denominada \"Recalificación de Tarifas Acueducto, Municipalidad de Tarrazú\". Dentro del planteamiento, y sobre la base de todos los tipos de usuarios del servicio y las tarifas existentes hasta el momento, apreció en el cuadro denominado \"Ingresos, gastos y resultados -Vigente-\", que de continuarse con el modelo tarifario existente, se producirían números negativos para desarrollo del servicio, de 5,3% para el 2010, 5,6% para el 2011, 6,2% para el 2012, 7,1% para el 2013, y 8,2% para el 2014. A raíz de ello, planteó un nuevo esquema tarifario que corresponde a aumento de ¢2.800,00 por mes en lo que respecta al servicio fijo y de ¢1.050 para los primeros 15 m3 del servicio medido, lo cual representa un aumento del 147% y 91% respectivamente. Dicha propuesta se elaboró sobre la base de la estructura de costos de operación el acueducto y, con sus modificaciones e impacto en términos relativos, se resume de la siguiente manera: \n\nBloques\n\nDomiciliaria\n\nOrdinaria\n\nReproductiva\n\nPreferencial\n\nGobierno\n\nServicio fijo anterior\n\nServicio fijo propuesto\n\n1900\n\n4700\n\n3800\n\n9400\n\n5700\n\n14.100\n\n1900\n\n4700\n\n2850\n\n7050\n\nAumento porcentual\n\n147.36%\n\n147.36%\n\n147.36%\n\n147.36%\n\n147.36%\n\nServicio medido\n\nBase 0 a 15 mts3 anterior\n\nBase 0 a 15 mts3 propues\n\n \n\n1150\n\n2200\n\n \n\n2300\n\n4400\n\n \n\n3450\n\n6600\n\n \n\n1150\n\n2200\n\n \n\n1725\n\n3300\n\nAumento\n\n91.30%\n\n91.30%\n\n91.30%\n\n91.30%\n\n91.30%\n\n16-25mts3 (por mts3)\n\n anterior\n\npropuesto\n\n \n\n55\n\n375\n\n \n\n63.80\n\n450\n\n \n\n118.25\n\n537.50\n\n \n\n \n\n71.50\n\n325.00\n\n \n\n71.50\n\n325.00\n\nAumento\n\n354.54%\n\n354.54%\n\n354.54%\n\n354.54%\n\n354.54%\n\n26-40 mts3 (por mts3)\n\nanterior\n\npropuesto\n\n \n\nIdentificacion409\n\n\n\n \n\n\n\n\n\n \n\n\n\n537.50\n\n \n\n71.50\n\n325\n\n \n\n71.50\n\n325\n\nAumento\n\n353.42%\n\n355.05%\n\n354.54%\n\n354.54%\n\n354.54%\n\n \n\nAsimismo, en el cuadro denominado \"Inversiones Período 2010-2011\", incluía la posibilidad de financiar nuevas compras en varios rubros de desarrollo del sistema del acueducto, a saber: para el año 2010, 15 unidades de hidrantes con su instalación, por la suma de cuarenta millones de colones; cuatro macromedidores por tres millones y medio, compra de 200 hidrómetros, por siete millones de colones, y para el año 2011, preveía la adquisición de los terrenos con nacientes por cincuenta millones de colones; para un total de ciento un millones y medio de colones en inversiones. Con la propuesta, además, se pronosticaba un rédito para desarrollo del servicio equivalente al 6,4% para el 2010, 11,7% para el 2011, 11,6 para el 2012, 12,0 para el 2013 y 12,3 para el 2014 (ver propuesta en presentación de diapositivas impresas, a folios 1 a 22, especialmente cuadro Inversiones a folio 12, cuadro de ingresos y gastos a folio 14, propuesta tarifaria a folio 15, cuadro ingresos y gastos con propuesta a folio 17, así como comparativo a folio 170); 2) Que en acuerdo definitivamente aprobado No.1 del Concejo Municipal de Tarrazú, tomado en la sesión ordinaria No. 204-2010, celebrada el 20 de abril del 2010, se dispuso textualmente \"Aprobar el estudio de recalificación de tarifas del Departamento de Acueducto Municipal, presentado por el señor Jesús Solís Sánchez, del Instituto de Fomento y Asesoría Municipal, quedando de la siguiente manera:\n\nBloques\n\nDOM.\n\nORD.\n\nREPR.\n\nPREF.\n\nGOB.\n\nSERV. FIJO\n\n4.700\n\n9.400\n\n14.100\n\n4.700\n\n7.050\n\nSERV. MEDIDO O Base 15 m3\n\n2200\n\n4.400\n\n6.600\n\n2.200\n\n3.300\n\n16-25 M3\n\n250\n\n290\n\n537.50\n\n325\n\n325\n\n26-40 M3\n\n375\n\n450\n\n537.50\n\n325\n\n325\n\n41-60 M3\n\n375\n\n450\n\n537.50\n\n325\n\n325\n\n61-80 M3\n\n562.50\n\n750\n\n537.50\n\n325\n\n325\n\n81-100 M3\n\n562.50\n\n750\n\n537.50\n\n787.50\n\n787.50\n\n101-120 Placa16955\n\n\n\n\n\n537.50\n\n787.50\n\n787.50\n\nMás de 120 Placa16955\n\n\n\n\n\n537.50\n\n787.50\n\n787.50\n\n \n\n(folios 26 y 26 vuelto); 3) La nueva fijación de tarifas fue publicada en el Diario Oficial La Gaceta No. 87 del 06 de mayo del 2010, por parte de la señora Adriana Vargas Solís, Administradora del Acueducto Municipal (hecho no controvertido), 4) En contra del anterior acuerdo, en memorial presentado el 14 de julio del 2010, el representante del Partido Tarrazú Primero interpuso formal recurso extraordinario de revisión. Dicha impugnación fue adicionada mediante documento presentado el 21 de julio siguiente (folios 33 a 37); 5) En acuerdo tomado por el Concejo Municipal de Tarrazú, en la sesión extraordinaria celebrada el 29 de julio del 2010, artículo único, se dispuso aprobar otra modificación de tarifas de agua con crédito, presentado por el señor Jesús Solís Sánchez, con otros precios más bajos que el anteriormente acordado(folios 44 y 45); 6) Habiéndose conformado un órgano director del procedimiento, a efectos de conocer el anterior recurso, éste se pronunció mediante resolución de las 18:00 horas del 14 de diciembre del 2010, recomendando al Concejo Municipal declararlo sin lugar (folios 52 a 59); 7) En el acuerdo definitivamente aprobado No. 8 del Concejo Municipal de Tarrazú, tomado en la sesión ordinaria No. 033-2010, celebrada el 15 de diciembre del 2010, notificado el 16 de diciembre del 2010 se conoció dicha recomendación, la cual resultó aprobada y, por ende, se rechazó el recurso extraordinario de revisión interpuesto (folios 62); 8) Contra el anterior acuerdo, mediante memorial de fecha 18 de diciembre del 2010, los representantes del Partido Tarrazú Primero, interpusieron sendos recursos ordinarios, resultando rechazada la revocatoria mediante acuerdo No. 8, tomado en la sesión ordinaria No. 036-2011 del 5 de enero del 2011, elevándose la apelación para ante este Tribunal y confiriéndose el respectivo emplazamiento de ley (recurso a folios 63 a 71, acuerdo a folios 72 y 73); 9) A solicitud de la parte apelante, este Tribunal acogió medida cautelar de suspensión de los efectos del acto venido en alzada, mediante resolución No. 215-2011 de las 10:25 horas del 9 de junio del 2011.\n\nII.- HECHOS NO PROBADOS: No ha demostrado la parte recurrente: 1) Que las nuevas tarifas propuestas sean ruinosas para los usuarios del servicio (los autos).\n\nIII.- OBJETO DEL RECURSO: En su libelo de apelación, el representante del Partido Tarrazú Primero retoma los argumentos del recurso extraordinario de revisión, que se proceden a resumir seguidamente: 1) Que no es cierto que el acuerdo que fijó las nuevas tarifas, hubiera autorizado su publicación cosa que realizó la señora Adriana Vargas Solís, Administradora del Acueducto Municipal, en el Diario Oficial La Gaceta No. 87 del 06 de mayo del 2010; 2) Que la aplicación de la nueva tarifa resultó ser total y absolutamente desproporcionada y ruinosa para los abonados del cantón; 3) Que el estudio realizado por el señor Solís Sánchez incluía el financiamiento de inversiones para el período 2010-2011 sin que éstas se hayan realizado, lo cual es fundamental para contemplarlo dentro de la tarifa de servicios públicos; 4) Que el acuerdo solamente aprueba el estudio, mas no así la propuesta de tarifas, ni incluye el cuadro tarifario a aplicar y sus elementos complementarios; 5) Que no existe justificación legal o técnica que respalde la necesidad de realizar el ajuste de tarifas; 6) Que no se procedió a solicitar la aprobación de las tarifas ante la Contraloría General de la República, en apego al Transitorio VIII del Código de Normas y Procedimientos Tributarios; 7) Que en el procedimiento del recurso extraordinario de revisión, no se les confirió audiencia para exponer y ampliar sus argumentos. \n\nIV.- POSICIÓN DEL GOBIERNO LOCAL. Las autoridades municipales estiman que lo actuado responde a los poderes conferidos a los gobiernos locales en razón de su autonomía política, administrativa y financiera, conforme lo disponen los artículos 4 inciso d) y 13 inciso b) del Código Municipal, con los que el cuerpo edil obtiene la competencia de aprobar tasas y precios que cobre por los servicios municipales. Se sustenta además en la sentencia No. 5445-99 de la Sala Constitucional, que estableció que la fijación de tasas corresponde a los Gobiernos Locales, toda vez que el Transitorio VIII del Código de Normas y Procedimientos Tributarios, que dispuso que correspondía a la Contraloría General de la República la fijación de los precios públicos, fue dejado sin efecto en resolución R-CO-70-2006 de las 9:00 del 4 de setiembre del 2006 de la Contraloría, al considerar que no era de su competencia. Manifiesta que con el aumento decretado puede hacer frente a los proyectos de inversión que el servicio requiere, cuyo procedimiento no exige realizar audiencia alguna a los interesados. Agrega que estas nuevas tarifas coadyuvan en el consumo racional y responsable de los usuarios, resultando más altas las facturas cuando el consumo aumenta, en un cantón en donde los índices de desarrollo humano son elevados, no generándose con ello detrimento alguno en los comerciantes del cantón. \n\nV.- CONTENIDO DEL ACUERDO ADOPTADO POR EL CONCEJO MUNICIPAL DE TARRAZÚ EN LA SESIÓN ORDINARIA NO. 204-2010. De una lectura integral del acuerdo 1, definitivamente aprobado por el Concejo Municipal de Tarrazú en la sesión ordinaria no. 204-2010, artículo II, el cual dio origen al recurso extraordinario de revisión, este Tribunal aprecia que en la presente causa, el estudio denominado \"Recalificación de Tarifas Acueducto, Municipalidad de Tarrazú\", elaborado por el señor Jesús Solís Sánchez, efectuó un análisis minucioso de la situación financiera que venía presentándose en el acueducto de Tarrazú, que incluyó todas las tarifas y tipos de usuarios del servicio y, sobre la base de la estructura de costos de administración, propuso un nuevo esquema que permitiera, adicionalmente, realizar ciertas inversiones propias e indispensables para su desarrollo y continuidad. Al conocer dicho análisis, en el acuerdo No. 1, artículo II, de la sesión ordinaria No- 204-2010 celebrada el 20 de abril del 2010, el Concejo Municipal dispuso aprobarlo, incluyendo las nuevas tarifas propuestas. La interpretación que hace la parte apelante, en el sentido de que en este acuerdo no se aprobaron esas tarifas, no es compartida por este Tribunal, máxime al verificarse que en la transcripción del acuerdo se detalla el nuevo esquema tarifario. Inclusive, dicho estudio es enfático al dar las razones técnicas y jurídicas para su implementación, pues se sustenta en las mismas normas del Código Municipal que autorizan la revisión anual de precios de los servicios públicos, así como en la necesidad obtener recursos adicionales a efecto de realizar algunas inversiones, partiendo de la base del costo de operación de las mismas, en donde se detallan los gastos del acueducto, la naturaleza y proporción de usuarios, sobre la base de las tarifas vigentes. \n\nVI.-SOBRE LA AUTONOMÍA MUNICIPAL. El Gobierno Local estima que lo actuado es consecuencia de la autonomía conferida legal y constitucionalmente a las municipalidades, las cuales pueden, por medio del Concejo Municipal, fijar las tasas y precios públicos de los servicios que presten (artículo 74 del Código Municipal), incluyéndose así el de acueductos. Si bien es cierto que del artículo 170 constitucional deriva esa autonomía municipal, la cual se materializa, por excelencia, en el poder impositivo o tributario para procurarse los ingresos necesarios para hacer frente a sus obligaciones, quedando en las corporaciones municipales la iniciativa para la creación, modificación o extinción de los impuestos municipales locales, también es cierto que la fijación de los impuestos requiere, en todo caso, de la aprobación de la Asamblea Legislativa. Sobre este particular, desde la sentencia No. 1999-5445 de las 14:30 horas del 14 de julio de 1999 -misma de cita por la corporación municipal de Tarrazú -, se indicó que la autonomía de las municipales se limita a lo estrictamente local y, por ende, es relativa, no es plena, exclusiva ni ilimitada, quedando sujeta a ciertos límites derivados de su inmersión dentro de la estructura del Estado costarricense. Es así como las municipalidades tienen la obligación de coordinar ciertas funciones con otras instituciones, en las que surge una especie de \"concierto interinstitucional\", según mandato constitucional y legal, que puede trascender hasta el macronivel de la planificación nacional, siempre dentro del marco de la ley, sin que ello signifique sujeción a la tutela administrativa del Poder Ejecutivo ni sometimiento a ningún tipo de dirección. A ello se debe, también, el hecho de que los gobiernos locales se encuentran sujetos a los controles fiscales, financieros, contables y presupuestarios que ejerce la Contraloría General de la República (artículo 183 constitucional), en resguardo de la Hacienda Pública, función que abarca inclusive la verificación del cumplimiento de fines y metas en respuesta a criterios de eficiencia y rentabilidad, en tanto sus parámetros forman parte del bloque de legalidad. \n\nVII.-SOBRE EL PROCEDIMIENTO APLICABLE PARA LA FIJACIÓN DE TARIFAS PARA EL COBRO DE SERVICIOS DERIVADOS DE LOS ACUEDUCTOS MUNICIPALES. EL ordenamiento jurídico municipal desde vieja data, estableció un sistema especial de fijación de tarifas para el cobro del servicios públicos que presten los gobiernos locales, sin reconocerles la autonomía plena que sustenta la tesis esgrimida por la corporación local de Tarrazú. Para tales efectos, se procede seguidamente a echar un vistazo histórico del desarrollo de esta materia. Desde el anterior Código Municipal -Ley 4574 del 04 de mayo de 1970 -derogado con la entrada del Código vigente -Ley No. 7794 publicado el 18 de mayo de1998-, se previó un mecanismo de fijación de tasas que exigía de la participación de algún organismo encargado de su aprobación y modificación. Debe aclararse que no existía, en ese momento, diferenciación entre los conceptos de tasa, tarifa y precio público, términos que han sido desarrollados y diferenciados por la más reciente doctrina tributaria durante los últimos veinte años. Disponía dicho cuerpo normativo: \n\n\"Artículo 85.- Los impuestos, contribuciones y las tasas municipales entrarán en vigencia una vez hayan sido aprobados conforme a la ley y publicados en el Diario Oficial.\n\nEl organismo encargado de aprobar las tasas municipales podrá modificarlas al resolver sobre su aprobación.\" (el resaltado es agregado)\n\nComo se aprecia, era necesaria la existencia de un \"organismo encargado de aprobar las tasas municipales\", competencia que fue definida en el Código de Normas y Procedimientos Tributarios -Ley No. 4755 del 3 de mayo de 1971-, al disponer:\n\n\"Artículo 5. Materia privativa de la ley.-\n\n...\n\nEn relación con las tasas, cuando la ley no lo prohíba, el Reglamento de la misma puede variar su monto para que cumplan su destino en forma más idónea, previa intervención del organismo que por ley sea el encargado de regular las tarifas de los servicios públicos.\" (el resaltado es agregado)\n\nEl Transitorio VIII del mismo Código dispuso que, hasta tanto ese organismo regulador no fuera creado, la modificación de dichas tarifas sería aprobada por la Contraloría General de la República. Al respecto, indicaba dicho ordinal: \n\n\"Transitorio VIII.- Mientras no se establezca por ley el organismo específico que tendrá a su cargo la fijación de las tarifas de los servicios públicos, la modificación de las mismas, conforme a la facultad prevista en el último párrafo del artículo 5 requerirá la aprobación previa de la Contraloría General de la República.\" (actualmente derogado con Ley 8823 de 5 de mayo del 2010, artículo 51, publicado en el Diario Oficial La Gaceta del 01 de junio del 2010) \n\n \n\nEn materia de tarifas para los servicios de acueductos municipales, el artículo 19 de la Ley de Reformas al Código Municipal y Otras Leyes -Ley 6890 del 14 de setiembre de 1983-, norma vigente desde el 23 de setiembre de 1983, adicionó el artículo 3 de la Ley Constitutiva del Instituto Costarricense de Acueductos y Alcantarillados -Ley 2726 del 14 de abril de 1961-, y dispuso expresamente el mecanismo de su fijación, e indicó que: \n\n\"ARTICULO 3º.- Corresponde al Instituto Costarricense de Acueductos y Alcantarillados elaborar las tasas y tarifas para los servicios públicos a que se refiere esta ley, prestados en el país por empresas públicas o privadas.\n\n...\n\nTratándose de acueductos municipales, las tasas y tarifas por concepto del servicio de agua, serán acordadas por el Concejo, previo estudio jurídico y económico que efectuará el Instituto de Fomento y Asesoría Municipal, en consulta con el Instituto Costarricense de Acueductos y Alcantarillados, y las mandará a publicar como proyecto, remitiéndolas para su aprobación al Servicio Nacional de Electricidad, el cual dispondrá de un plazo de treinta días hábiles para aprobarlas o justificar su rechazo. \n\nEn caso contrario vencido este plazo, la municipalidad las pondrá en vigencia a partir del mes siguiente a la publicación en el Diario Oficial del aviso correspondiente. \" (El resaltado es agregado)\n\n \n\nComo consecuencia de la aplicación de esta ley, en setiembre de 1983, se definió el órgano encargado de la aprobación de las tarifas de los acueductos locales cuya precisión hacía el Transitorio VIII del Código de Normas y Procedimientos Tributarios, quedando esa norma sin aplicación. Recayó esta competencia en el Servicio Nacional de Electricidad (SNE), mediante el cual se reforzó el esquema interventor del Estado costarricense que empezaba a promover, con esta clase de normas, la regulación de los servicios públicos. El SNE fue transformado posteriormente en la Autoridad Reguladora de los Servicios Públicos, mediante Ley N° 7593 del 09 de agosto de 1996, artículo 1. El artículo 5 de esta norma amplió su esfera de competencias y dispuso que las tarifas de los servicios públicos de acueducto y alcantarillado, incluyendo agua potable, recolección, tratamiento y evacuación de aguas negras, aguas residuales y pluviales, serían fijadas en adelante por dicha institución autónoma, sin hacer diferenciación alguna de cuál era el ente encargado de brindarlos. Al respecto, para el tema de interés, dictaba la norma: \n\n\"Artículo 5°.- Funciones\n\nEn los servicios públicos definidos en este artículo, la Autoridad Reguladora fijará precios y tarifas; además, velará por el cumplimiento de las normas de calidad, cantidad, confiabilidad, continuidad, oportunidad y prestación óptima, según el artículo 25 de esta ley. Los servicios públicos antes mencionados son:\n\n....\n\nc) Suministro del servicio de acueducto y alcantarillado, incluyendo agua potable, recolección, tratamiento y evacuación de aguas negras, aguas residuales y pluviales.\"\n\nEl texto del inciso c) anteriormente transcrito fue reformado por el artículo 5° de la Ley N° 8641 del 11 de junio del 2008, quedando la versión actual, de la siguiente manera:\n\n\"c) Suministro del servicio de acueducto y alcantarillado, incluso el agua potable, la recolección, el tratamiento y la evacuación de las aguas negras, las aguas residuales y pluviales, así como la instalación, la operación y el mantenimiento del servicio de hidrantes.\"\n\nEstas normas coexisten y se encuentran vigentes con el actual Código Municipal -Ley 7794 publicada en La Gaceta No. 94 del 18 de mayo de 1998-, el cual atribuye al Concejo Municipal la competencia de aprobar las tasas y precios que cobre por servicios municipales, al disponer expresamente que:\n\n\"Artículo 13.- Son atribuciones del Concejo:\n\n...\n\nb) Acordar los presupuestos y aprobar las contribuciones, tasas y precios que cobre por los servicios municipales, así como proponer los proyectos de tributos municipales a la Asamblea Legislativa.\"\n\nDe la transcripción de tales leyes y, a la luz de los criterios de autonomía y tutela administrativa, no queda duda de que en lo referente a la designación de esquemas tarifarios para el cobro de servicios de acueductos, existe normativa especial de aplicación prioritaria que prevalece, de modo que las corporaciones locales mantienen esa autonomía relativa par la fijación de tales precios, requiriendo, de acuerdo con el ordenamiento jurídico, coordinar esfuerzos con el Instituto de Fomento y Asesoría Municipal y el aval de la Autoridad Reguladora de los Servicios Públicos. Ello se debe integrar con el artículo 3 de la Ley Constitutiva del Instituto Costarricense de Acueductos y Alcantarillados, pues mantiene la competencia del Concejo Municipal de acordar las tasas y tarifas por concepto del servicio de agua, \"previo estudio jurídico y económico que efectuará el Instituto de Fomento y Asesoría Municipal, en consulta con el Instituto Costarricense de Acueductos y Alcantarillados\" las cuales deberán ser aprobadas, finalmente, por la ARESEP, dentro de un plazo de treinta días hábiles. Precisamente, la Sala Constitucional vino a sostener una tesis en este sentido, en la sentencia 1999-5445 de cita, pues refiriéndose al Transitorio VIII del Código de Normas y Procedimientos Tributarios, indicó: \n\n\"Debe hacerse la advertencia que esta norma, a juicio de la Sala, fue parcialmente derogada en virtud de la Ley de la Autoridad Reguladora de los Servicios Públicos, número 7593, de veintiocho de marzo de mil novecientos noventa y seis, por la que se creó la Autoridad Reguladora de los Servicios Públicos, a quien le corresponde la fijación de los precios y tarifas de los servicios públicos definidos en el artículo 5 de su ley, de manera que en lo que respecta a los servicios locales, únicamente tiene competencia para fijar las tarifas para la recolección y tratamiento de los desechos sólidos e industriales. Es decir, hasta la vigencia del nuevo Código Municipal, este Transitorio tenía plena aplicación a las municipalidades, en lo que corresponde a la fijación de las tasas municipales, y a partir de la Ley 7593, sigue teniendo vigencia en lo que no se transfirió expresamente a la Autoridad Reguladora. \n\n...\n\nEstima este Tribunal, que dejar sólo a la discrecionalidad de las autoridades municipales la determinación de los montos que deben pagar los vecinos en concepto de tasas, sin ningún control previo, resulta no sólo riesgoso por los abusos que se pueden cometer, sino contrario a los principios constitucionales de protección a las grandes mayorías. Por ello, es necesario establecer un control, ya sea a priori o a posteriori, a cargo de la Contraloría General de la República, control que se repite, es estrictamente de legalidad, a efecto de que verifique que el costo propuesto del servicio es el correcto, a fin de evitar que las municipalidades cobren más de lo que corresponde en justicia. En este sentido, cabe advertir que la única participación constitucionalmente posible por parte de la Contraloría en la fijación de las tasas municipales, es ese control de legalidad, en el que podría objetar la tasa que sea desproporcionada al costo del servicio que se pretende cobrar, y obviamente, estaría legitimada para señalar el límite para modificar la tasa a efecto de que guarde relación con el costo efectivo del servicio, al resolver sobre su aprobación; motivos por los cuales, el artículo 85 del Código Municipal no es inconstitucional y tampoco lo es el Transitorio VIII del Código de Normas y Procedimientos Tributarios. \n\nEl artículo 74 del Código Municipal vigente, eliminó la intervención de la Contraloría para la fijación de las tasas municipales, pero subsiste, a juicio de la Sala, la aplicación del Transitorio VIII del Código de Normas y Procedimientos Tributarios, hasta tanto no sean traspasados en su integridad, la fijación de las tasas y precios a la Autoridad Reguladora de los Servicios Públicos.\"\n\n \n\nPosteriormente, en aclaración y adición de la anterior sentencia, el Tribunal Constitucional sostuvo una tesis en similar sentido, en resolución No. 2000-07728 de las catorce horas con cuarenta y cinco minutos del treinta de agosto del dos mil, reforzando el tema de los controles en la fijación de tarifas, al decir que:\n\n \"La fijación de estas tarifas corresponde a los propios gobiernos locales -en atención a su reconocida autonomía tributaria-, en coordinación con las respectivas instituciones del Estado. Sin embargo, ello no quiere decir que están exentas de control, precisamente por estar librada a la discrecionalidad de las autoridades municipales, el riesgo por abuso en perjuicio de los usuarios aumenta, por lo que se requiere de un órgano contralor para hacer efectivo el principio constitucional de protección de las grandes mayorías. Este órgano es la Contraloría General de la República toda vez que la Ley de la Autoridad Reguladora de los Servicios Públicos modificó parcialmente el Transitorio VIII. del Código de Normas y Procedimientos Tributarios, de manera tal que respecto de los servicios municipales, a esa entidad le corresponde la fijación de los precios y tarifas de la recolección y tratamiento de desechos sólidos e industriales, únicamente, tal y como lo establece el artículo 5 de la Ley 7593. Consecuentemente, el control de los precios y tarifas de los otros servicios que presten directamente las municipales le corresponde en este momento en exclusiva a la Contraloría General de la República, salvo disposición expresa de ley especial al efecto.\"\n\n \n\nEn otro Voto, al declarar con lugar un recurso de amparo, la misma Sala Constitucional retomó el tema de la participación de la ARESEP en la fijación de tarifas de servicios de acueductos municipales, y dispuso:\n\n\"Sobre el aumento tarifario del servicio de agua potable: De conformidad con lo dispuesto en la Ley 7593 (emitida en desarrollo de los numerales 50, 74 y 140 incisos 8 y 20 constitucionales) la Autoridad Reguladora de Servicios Públicos es el órgano competente para autorizar el aumento de tarifas por servicios públicos, siendo que de previo a ejecutar un aumento tarifario la Municipalidad de Montes de Oro deberá solicitar la autorización respectiva a la ARESEP. En este sentido ver sentencia 5445-99 de las 14:30 horas del 14 de julio de 1999, que en lo conducente indica:\n\n...\n\nVisto que en oficio 03749 del diez de mayo del dos mil, suscrito por la Directora de Atención al Usuario de la Autoridad Reguladora de Servicios Públicos, consta que la ARESEP no ha aprobado aumentar las tarifas del servicio de agua potable administrado por la Municipalidad de Montes de Oro (folio 157); que los vecinos del Proyecto IMAS se quejan por aumentos tarifarios en el servicio de agua no proporcionales a la calidad del mismo (folios 4, 74, 75, 76); que el Presidente del Concejo Municipal admite que los aumentos tarifarios se fundan exclusivamente en un estudio previo elaborado por el IFAM (vid folio 171, apartado 7; y copias de La Gaceta No. 81 del 27 de abril del año en curso y No. 152 del 9 de agosto siguiente, visibles a folios 214 y 217); que el aumento tarifario en cuestión no ha sido sometido a la aprobación de la ARESEP, la Municipalidad de Montes Oro ha incurrido en una violación de lo dispuesto por los artículos 11, 50, 74 y 169 constitucionales, en tanto exigen a los Gobiernos Municipales administrar los intereses y servicios locales dentro de los límites impuestos por el principio de legalidad (los procedimientos utilizados para la consecución de los fines no podrán exceder el ordenamiento jurídico vigente). De manera que, si la Municipalidad de Montes de Oro considera que el estudio tarifario visible a folios 224 y subsiguientes es acorde a las circunstancias del Cantón y constituye un instrumento idóneo para permitir el proceso de mantenimiento del Acueducto Miramar y el mejoramiento efectivo del servicio de suministro de agua potable a la comunidad, deberá así comunicarlo a la Autoridad Reguladora de Servicios Públicos (en los términos contenidos en la Ley 7593) siendo que no podrá ejecutar el cobro correspondiente a ningún aumento tarifario de este tipo de servicio mientras no cuente con la aprobación previa de la ARESEP.\" (En resaltado es agregado. Ver sentencia No. 2000-09972, de las las catorce horas con treinta y un minutos del ocho de noviembre del dos mil.)\n\nVIII.- Dentro del elenco de agravios expresados por la parte apelante, se reclama el hecho de que las nuevas tarifas no fueron aprobadas en definitiva por la Contraloría General de la República. Tal y como se expuso supra, en la actualidad no corresponde a esa institución tal competencia, mas tal y como ha quedado expuesto, esta función sí es responsabilidad de la Autoridad Reguladora de los Servicios Públicos, pues para ello hay norma expresa que le designa la competencia, misma que resulta indelegable, irrenunciable e intransmisible (artículo 66 de la Ley General de la Administración Pública), sin que ello signifique vulneración al principio de autonomía municipal, mismo que no puede comprenderse de manera absoluta, sino dentro del entorno del Estado costarricense, entendido integralmente dentro de su macroestructura organizativa a nivel nacional. Sin lugar a dudas, los vicios de nulidad del acuerdo venido en alzada existen, en el tanto se ha violentado el procedimiento legal previsto para tales efectos, explicado en líneas atrás, en el tanto el Concejo Municipal, mediante el acuerdo venido en alzada procedió, de manera independiente, a disponer de las nuevas tarifas, sin solicitar la aprobación definitiva del órgano responsable al efecto. Además, dichas tarifas fueron acordadas sin haber sido puestas previamente en conocimiento de los interesados mediante la publicación del proyecto que ordena el artículo 3 de la Ley Constitutiva del Instituto Costarricense de Acueductos y Alcantarillados -transcrito supra-, a efecto de que se pronunciaran, evidenciándose, con ello, otro vicio insubsanable que da mérito, a la luz del artículo 182.1 de la Ley General de la Administración Pública, para acoger los agravios expresados en este sentido y ordenar la nulidad de todo lo actuado, debiendo reponerse los procedimientos de rigor, con ajuste a la Ley. \n\nIX.- CRITERIOS PARA LA DESIGNACIÓN DEL NUEVO PRECIO DEL SERVICIO. Todo servicio público parte del principio del servicio al costo, el cual se entiende como el deber de contemplar dentro del precio \"únicamente los costos necesarios para prestar el servicio, que permitan una retribución competitiva y garanticen el adecuado desarrollo de la actividad \" (artículo 3 inciso c de la Ley de ARESEP -Ley No. 7593 del 09 de agosto de 1996), ello implica que la tarifa que se fije debe contemplar un porcentaje que incluya la posibilidad de permitir su crecimiento y desarrollo. No es cierto, como entiende la parte apelante, que no se puede prever dentro del precio fijado, las inversiones futuras; mas bien, por el contrario, todo servicio responsable debe anticipar su mantenimiento y crecimiento, mismo que necesariamente debe ser sufragado por los usuarios del mismo. Existen criterios legales para la definición de estas tarifas, en la la Ley Constitutiva del Instituto Costarricense de Acueductos y Alcantarillados -Ley 2726-, reformada mediante artículo 1º de la Ley Nº 5915 de 12 de julio de 1976, al disponer:\n\n\"ARTICULO 4º.- Para la fijación de tarifas se aplicarán criterios de justicia social distributiva, que tomen en cuenta los estratos sociales y la zona a que pertenecen los usuarios, de manera que los que tienen mayor capacidad de pago subvencionen a los de menor capacidad, con el propósito de obtener ingresos tales que respondan a la política financiera que para el Instituto señalan las normas legales correspondientes.\n\nEl Estado y sus instituciones de asistencia social podrán subvencionar, total o parcialmente, áreas o grupos de usuarios, que por sus condiciones económicas están incapacitados para pagar las tarifas establecidas.\"\n\n \n\nInclusive, el Código Municipal permite, en el artículo 74, que las tasas y precios de los servicios que presta incluyan este rubro adicional, al decir que:\n\n\"Artículo 74.- Por los servicios que preste, la municipalidad cobrará tasas y precios, que se fijarán tomando en consideración el costo efectivo más un diez por ciento (10%) de utilidad para desarrollarlos. Una vez fijados, entrarán en vigencia treinta días después de su publicación...\" \n\n \n\nLa nueva estructura de precios de acueducto implementada en Tarrazú, previó un rédito para desarrollo del servicio equivalente al 6,4% para el 2010, 11,7% para el 2011, 11,6 para el 2012, 12,0 para el 2013 y 12,3 para el 2014; mismos que sobrepasaron la autorización legal prevista, con excepción del año 2010. Un cobro en exceso de este tipo, puede hacer que recaiga en el usuario del servicio un sobreprecio que está fuera de toda habilitación legal, haciendo encarecer el servicio por encima de los márgenes legales permitidos, trasladándolo de manera injustificada al usuario. A criterio de esta Cámara, si bien no ha sido demostrado que las nuevas tarifas resulten ruinosas en los términos expuestos en el recurso, éstas deben ser asumidas sobre la base de un precio razonable y apegado a la ley. Sin duda, este es un factor que, a simple vista, debe ser revisado también por las autoridades locales. \n\nX.- Debe adicionarse, además, que el acuerdo No. 8 del Concejo Municipal de Tarrazú, tomado en la sesión ordinaria No. 033-2010, celebrada el 15 de diciembre del 2010, que rechazó el recurso extraordinario de revisión, es nulo también en el tanto no se respetó el procedimiento que garantizara a los interesados, su debido apersonamiento, derecho de defensa y garantía del debido proceso. En todo caso, por las razones expuestas, es nulo el acuerdo No. 1 definitivamente aprobado en la sesión ordinaria No. 204-2010, celebrada el 20 de abril del 2010, que aprobó en definitiva el nuevo esquema tarifario. Por conexidad y consecuencia, deviene la nulidad absoluta del acuerdo tomado en la sesión extraordinaria celebrada el 29 de julio del 2010, artículo único, en donde se acordó también la modificación de las tarifas de agua con crédito, presentado por el señor Jesús Solís Sánchez, por adolecer de los mismos vicios procedimentales. Debe devolverse el expediente al Concejo Municipal de Tarrazú, a efecto de que el cuerpo edil retome su análisis y se ajuste a derecho, de modo que defina esquemas tarifarios sobre la base de una fijación justa y proporcionada dentro de los límites legales y enderece los procedimientos. \n\n POR TANTO:\n\nSe anula el acuerdo impugnado y, por conexidad y consecuencia, el acuerdo tomado por el Concejo Municipal de Tarrazú, en la sesión extraordinaria celebrada el 29 de julio del 2010, artículo único. Se ordena devolver el expediente a la Municipalidad de origen, para que reponga el procedimiento conforme a derecho. \n\n \n\n \n\nNombre66641 \n\n \n\n \n\nEvelyn Solano Ulloa Nombre80986 \n\n \n\n \n\n \n\nExp: 11-000584-1027-ca\n\nMunicipal\n\nPartido Tarrazú Primero c/ Municipalidad de Tarrazú",
  "body_en_text": "CED78424\n\nN° 402-2011\n\nCONTENTIOUS-ADMINISTRATIVE TRIBUNAL. THIRD SECTION. SECOND JUDICIAL CIRCUIT OF SAN JOSÉ. Goicoechea, ten hours five minutes of October twenty-first, two thousand eleven.\n\nThis Tribunal hears, as improper hierarchical superior, the appeal filed by Partido Tarrazú Primero, represented by Nombre102551, identity card number CED78425; against definitively approved agreement No. 8 of the Municipal Council of Tarrazú, adopted in ordinary session No. 033-2010, held on December 15, 2010.\n\nJudge Solano Ulloa writes, and:\n\nCONSIDERING:\n\nI.- PROVEN FACTS. For a correct resolution of this matter, the following is deemed proven: 1) That Mr. Jesús Solís Sánchez, an official of the Instituto de Fomento y Asesoría Municipal, prepared a proposal for the reclassification of rates for the municipal aqueduct of Tarrazú, called \"Reclassification of Aqueduct Rates, Municipality of Tarrazú\". Within the proposal, and based on all types of service users and the rates existing up to that point, he assessed in the table called \"Income, expenses and results -Current-\", that if the existing rate model were to continue, negative numbers for service development would occur, of 5.3% for 2010, 5.6% for 2011, 6.2% for 2012, 7.1% for 2013, and 8.2% for 2014. As a result, he proposed a new rate scheme corresponding to an increase of ¢2,800.00 per month for the fixed service and ¢1,050 for the first 15 m3 of the metered service, representing an increase of 147% and 91% respectively. This proposal was prepared based on the operating cost structure of the aqueduct and, with its modifications and relative impact, is summarized as follows:\n\nBlocks\n\nDomestic\n\nOrdinary\n\nReproductive\n\nPreferential\n\nGovernment\n\nPrevious fixed service\n\nProposed fixed service\n\n1900\n\n4700\n\n3800\n\n9400\n\n5700\n\n14,100\n\n1900\n\n4700\n\n2850\n\n7050\n\nPercentage increase\n\n147.36%\n\n147.36%\n\n147.36%\n\n147.36%\n\n147.36%\n\nMetered service\n\nPrevious Base 0 to 15 mts3\n\nProposed Base 0 to 15 mts3\n\n1150\n\n2200\n\n2300\n\n4400\n\n3450\n\n6600\n\n1150\n\n2200\n\n1725\n\n3300\n\nIncrease\n\n91.30%\n\n91.30%\n\n91.30%\n\n91.30%\n\n91.30%\n\n16-25 mts3 (per mts3)\nprevious\nproposed\n\n55\n375\n\n63.80\n450\n\n118.25\n537.50\n\n71.50\n325.00\n\n71.50\n325.00\n\nIncrease\n\n354.54%\n\n354.54%\n\n354.54%\n\n354.54%\n\n354.54%\n\n26-40 mts3 (per mts3)\nprevious\nproposed\n\nIdentificacion409\n\n\n\n\n\n\n537.50\n\n71.50\n325\n\n71.50\n325\n\nIncrease\n\n353.42%\n\n355.05%\n\n354.54%\n\n354.54%\n\n354.54%\n\nLikewise, in the table called \"Investments Period 2010-2011\", it included the possibility of financing new purchases in various areas of aqueduct system development, namely: for the year 2010, 15 hydrant units with their installation, for the sum of forty million colones; four macro-meters for three and a half million, purchase of 200 water meters, for seven million colones, and for the year 2011, it foresaw the acquisition of lands with springs (nacientes) for fifty million colones; for a total of one hundred one and a half million colones in investments. With the proposal, furthermore, a return for service development was forecast equivalent to 6.4% for 2010, 11.7% for 2011, 11.6 for 2012, 12.0 for 2013 and 12.3 for 2014 (see proposal in printed slide presentation, on folios 1 to 22, especially Investments table on folio 12, income and expenses table on folio 14, rate proposal on folio 15, income and expenses table with proposal on folio 17, as well as comparison on folio 170); 2) That in definitively approved agreement No. 1 of the Municipal Council of Tarrazú, adopted in ordinary session No. 204-2010, held on April 20, 2010, it was textually provided \"Approve the rate reclassification study of the Municipal Aqueduct Department, presented by Mr. Jesús Solís Sánchez, of the Instituto de Fomento y Asesoría Municipal, resulting as follows:\n\nBlocks\n\nDOM.\n\nORD.\n\nREPR.\n\nPREF.\n\nGOB.\n\nFIXED SERV.\n\n4,700\n\n9,400\n\n14,100\n\n4,700\n\n7,050\n\nMETERED SERV. O Base 15 m3\n\n2200\n\n4,400\n\n6,600\n\n2,200\n\n3,300\n\n16-25 M3\n\n250\n\n290\n\n537.50\n\n325\n\n325\n\n26-40 M3\n\n375\n\n450\n\n537.50\n\n325\n\n325\n\n41-60 M3\n\n375\n\n450\n\n537.50\n\n325\n\n325\n\n61-80 M3\n\n562.50\n\n750\n\n537.50\n\n325\n\n325\n\n81-100 M3\n\n562.50\n\n750\n\n537.50\n\n787.50\n\n787.50\n\n101-120 Placa16955\n\n\n\n\n\n537.50\n\n787.50\n\n787.50\n\nMore than 120 Placa16955\n\n\n\n\n\n537.50\n\n787.50\n\n787.50\n\n(folios 26 and 26 back); 3) The new rate setting was published in the Official Gazette La Gaceta No. 87 of May 6, 2010, by Mrs. Adriana Vargas Solís, Administrator of the Municipal Aqueduct (uncontroverted fact), 4) Against the previous agreement, in a brief filed on July 14, 2010, the representative of Partido Tarrazú Primero filed a formal extraordinary motion for review. Said challenge was supplemented by a document filed on the following July 21 (folios 33 to 37); 5) In an agreement adopted by the Municipal Council of Tarrazú, in the extraordinary session held on July 29, 2010, single article, it was provided to approve another modification of water rates with credit, presented by Mr. Jesús Solís Sánchez, with other lower prices than the previously agreed one (folios 44 and 45); 6) Having formed a directing body for the procedure, for the purpose of hearing the previous motion, it ruled through resolution at 6:00 p.m. on December 14, 2010, recommending the Municipal Council declare it without merit (folios 52 to 59); 7) In definitively approved agreement No. 8 of the Municipal Council of Tarrazú, adopted in ordinary session No. 033-2010, held on December 15, 2010, notified on December 16, 2010, said recommendation was heard, which was approved and, therefore, the extraordinary motion for review filed was rejected (folios 62); 8) Against the previous agreement, through a brief dated December 18, 2010, the representatives of Partido Tarrazú Primero, filed respective ordinary motions, resulting in the rejection of the revocation motion through agreement No. 8, adopted in ordinary session No. 036-2011 of January 5, 2011, elevating the appeal to this Tribunal and conferring the respective legal summons (motion on folios 63 to 71, agreement on folios 72 and 73); 9) At the request of the appellant party, this Tribunal granted a precautionary measure suspending the effects of the act under appeal, through resolution No. 215-2011 at 10:25 a.m. on June 9, 2011.\n\nII.- UNPROVEN FACTS: The appellant party has not demonstrated: 1) That the proposed new rates are ruinous for the service users (the case file).\n\nIII.- OBJECT OF THE APPEAL: In their appeal brief, the representative of Partido Tarrazú Primero retakes the arguments of the extraordinary motion for review, which are summarized below: 1) That it is not true that the agreement setting the new rates authorized its publication, which was carried out by Mrs. Adriana Vargas Solís, Administrator of the Municipal Aqueduct, in the Official Gazette La Gaceta No. 87 of May 6, 2010; 2) That the application of the new rate turned out to be totally and absolutely disproportionate and ruinous for the subscribers of the canton; 3) That the study carried out by Mr. Solís Sánchez included the financing of investments for the 2010-2011 period without these having been carried out, which is fundamental to contemplate it within the public service rate; 4) That the agreement only approves the study, but not the rate proposal, nor does it include the rate table to be applied and its complementary elements; 5) That there is no legal or technical justification supporting the need to make the rate adjustment; 6) That approval of the rates was not requested from the Contraloría General de la República, in accordance with Transitory Provision VIII of the Código de Normas y Procedimientos Tributarios; 7) That in the procedure of the extraordinary motion for review, they were not granted a hearing to present and expand their arguments.\n\nIV.- POSITION OF THE LOCAL GOVERNMENT. The municipal authorities consider that what was done responds to the powers conferred on local governments by reason of their political, administrative, and financial autonomy, as provided in articles 4 subsection d) and 13 subsection b) of the Código Municipal, with which the municipal body obtains the competence to approve fees and prices charged for municipal services. It is also based on ruling No. 5445-99 of the Constitutional Chamber (Sala Constitucional), which established that the setting of fees corresponds to Local Governments, since Transitory Provision VIII of the Código de Normas y Procedimientos Tributarios, which provided that the setting of public prices corresponded to the Contraloría General de la República, was rendered ineffective in resolution R-CO-70-2006 at 9:00 a.m. on September 4, 2006 of the Contraloría, considering it was not within its competence. It states that with the decreed increase it can face the investment projects that the service requires, a procedure that does not require holding any hearing for interested parties. It adds that these new rates contribute to the rational and responsible consumption of users, with bills being higher when consumption increases, in a canton where human development indices are high, not generating any detriment to the merchants of the canton.\n\nV.- CONTENT OF THE AGREEMENT ADOPTED BY THE MUNICIPAL COUNCIL OF TARRAZÚ IN ORDINARY SESSION NO. 204-2010. From a comprehensive reading of agreement 1, definitively approved by the Municipal Council of Tarrazú in ordinary session no. 204-2010, article II, which gave rise to the extraordinary motion for review, this Tribunal appreciates that in the present case, the study called \"Reclassification of Aqueduct Rates, Municipality of Tarrazú\", prepared by Mr. Jesús Solís Sánchez, carried out a meticulous analysis of the financial situation that had been occurring in the Tarrazú aqueduct, which included all rates and types of service users and, based on the administrative cost structure, proposed a new scheme that would allow, additionally, certain own and indispensable investments for its development and continuity. Upon hearing said analysis, in agreement No. 1, article II, of ordinary session No- 204-2010 held on April 20, 2010, the Municipal Council provided to approve it, including the proposed new rates. The interpretation made by the appellant party, in the sense that this agreement did not approve those rates, is not shared by this Tribunal, especially when verifying that the transcription of the agreement details the new rate scheme. Indeed, said study is emphatic in giving the technical and legal reasons for its implementation, as it is based on the very norms of the Código Municipal that authorize the annual review of public service prices, as well as on the need to obtain additional resources in order to carry out certain investments, starting from the basis of their operating cost, where the aqueduct expenses, the nature and proportion of users are detailed, based on the current rates.\n\nVI.- ON MUNICIPAL AUTONOMY. The Local Government considers that what was done is a consequence of the legally and constitutionally conferred autonomy on municipalities, which may, through the Municipal Council, set the fees and public prices for the services they provide (article 74 of the Código Municipal), thus including that of aqueducts. Although it is true that from Article 170 of the Constitution derives that municipal autonomy, which materializes, par excellence, in the tax or revenue power to procure the necessary income to meet their obligations, with the initiative for the creation, modification or extinction of local municipal taxes remaining in the municipal corporations, it is also true that the setting of taxes requires, in any case, the approval of the Legislative Assembly. On this point, since ruling No. 1999-5445 of 2:30 p.m. on July 14, 1999 - the same one cited by the municipal corporation of Tarrazú - it was indicated that the autonomy of the municipalities is limited to what is strictly local and, therefore, is relative, not full, exclusive, or unlimited, being subject to certain limits derived from its immersion within the structure of the Costa Rican State. It is thus that municipalities have the obligation to coordinate certain functions with other institutions, in which a kind of \"interinstitutional concert\" arises, according to constitutional and legal mandate, which can transcend to the macro-level of national planning, always within the framework of the law, without this meaning subjection to the administrative oversight of the Executive Branch or submission to any type of direction. To this is also due the fact that local governments are subject to the fiscal, financial, accounting, and budgetary controls exercised by the Contraloría General de la República (Article 183 of the Constitution), in protection of the Public Treasury, a function that also includes the verification of the fulfillment of purposes and goals in response to efficiency and profitability criteria, as their parameters form part of the legality framework.\n\nVII.- ON THE APPLICABLE PROCEDURE FOR SETTING RATES FOR CHARGING SERVICES DERIVED FROM MUNICIPAL AQUEDUCTS. The municipal legal system, for a long time, established a special system for setting rates for charging public services provided by local governments, without recognizing full autonomy, which the thesis argued by the local corporation of Tarrazú is based on. For such purposes, a historical look at the development of this matter is undertaken below. Since the previous Código Municipal - Law 4574 of May 4, 1970 - repealed with the entry of the current Code - Law No. 7794 published on May 18, 1998 -, a fee-setting mechanism was foreseen that required the participation of some body responsible for its approval and modification. It should be clarified that, at that time, there was no differentiation between the concepts of fee (tasa), rate (tarifa), and public price (precio público), terms that have been developed and differentiated by the most recent tax doctrine over the last twenty years. Said regulatory body provided:\n\n\"Article 85.- The municipal taxes, contributions, and fees shall enter into force once they have been approved in accordance with the law and published in the Official Gazette.\n\nThe body responsible for approving municipal fees may modify them when ruling on their approval.\" (emphasis added)\n\nAs can be seen, the existence of a \"body responsible for approving municipal fees\" was necessary, a competence that was defined in the Código de Normas y Procedimientos Tributarios - Law No. 4755 of May 3, 1971 -, by providing:\n\n\"Article 5. Matters reserved for law.-\n\n...\n\nIn relation to fees, when the law does not prohibit it, its Regulations may vary their amount so that they fulfill their purpose in a more suitable manner, upon prior intervention of the body that by law is responsible for regulating public service rates.\" (emphasis added)\n\nTransitory Provision VIII of the same Code provided that, until such a regulatory body was created, the modification of these rates would be approved by the Contraloría General de la República. In this regard, said article stated:\n\n\"Transitory Provision VIII.- Until the specific body that will be in charge of setting public service rates is established by law, the modification thereof, pursuant to the power provided in the last paragraph of Article 5, shall require the prior approval of the Contraloría General de la República.\" (currently repealed by Law 8823 of May 5, 2010, Article 51, published in the Official Gazette La Gaceta of June 1, 2010)\n\nIn matters of rates for municipal aqueduct services, Article 19 of the Law of Reforms to the Código Municipal and Other Laws - Law 6890 of September 14, 1983 -, a norm in force since September 23, 1983, added Article 3 of the Constitutive Law of the Instituto Costarricense de Acueductos y Alcantarillados - Law 2726 of April 14, 1961 -, and expressly provided the mechanism for their setting, stating that:\n\n\"ARTICLE 3.- It corresponds to the Instituto Costarricense de Acueductos y Alcantarillados to prepare the fees and rates for the public services referred to in this law, provided in the country by public or private companies.\n\n...\n\nIn the case of municipal aqueducts, the fees and rates for the water service shall be agreed upon by the Council, upon prior legal and economic study to be carried out by the Instituto de Fomento y Asesoría Municipal, in consultation with the Instituto Costarricense de Acueductos y Alcantarillados, and shall send them for publication as a project, forwarding them for approval to the Servicio Nacional de Electricidad, which shall have a period of thirty working days to approve them or justify their rejection.\n\nOtherwise, once this period has elapsed, the municipality shall put them into effect starting the month following the publication of the corresponding notice in the Official Gazette.\" (emphasis added)\n\nAs a consequence of the application of this law, in September 1983, the body responsible for approving local aqueduct rates, whose specification was required by Transitory Provision VIII of the Código de Normas y Procedimientos Tributarios, was defined, rendering that norm without application. This competence fell upon the Servicio Nacional de Electricidad (SNE), through which the interventionist scheme of the Costa Rican State that was beginning to promote, with this type of norms, the regulation of public services was reinforced. The SNE was subsequently transformed into the Autoridad Reguladora de los Servicios Públicos, through Law No. 7593 of August 9, 1996, Article 1. Article 5 of this norm expanded its sphere of competences and provided that the rates for public aqueduct and sewerage services, including potable water, collection, treatment, and evacuation of black water, residual water, and rainwater, would henceforth be set by said autonomous institution, without making any differentiation as to which entity was responsible for providing them. In this regard, for the topic of interest, the norm stated:\n\n\"Article 5.- Functions\n\nIn the public services defined in this article, the Regulatory Authority shall set prices and rates; in addition, it shall ensure compliance with quality, quantity, reliability, continuity, timeliness, and optimal provision standards, according to Article 25 of this law. The aforementioned public services are:\n\n....\n\nc) Supply of the aqueduct and sewerage service, including potable water, collection, treatment, and evacuation of black water, residual water, and rainwater.\"\n\nThe text of subsection c) transcribed above was reformed by Article 5 of Law No. 8641 of June 11, 2008, resulting in the current version, as follows:\n\n\"c) Supply of the aqueduct and sewerage service, including potable water, the collection, treatment, and evacuation of black water, residual water, and rainwater, as well as the installation, operation, and maintenance of the hydrant service.\"\n\nThese norms coexist and are in force with the current Código Municipal - Law 7794 published in La Gaceta No. 94 of May 18, 1998 -, which attributes to the Municipal Council the competence to approve the fees and prices it charges for municipal services, by expressly providing that:\n\n\"Article 13.- The powers of the Council are:\n\n...\n\nb) Agree on budgets and approve the contributions, fees, and prices it charges for municipal services, as well as propose municipal tax projects to the Legislative Assembly.\"\n\nFrom the transcription of such laws and, in light of the criteria of autonomy and administrative oversight, there is no doubt that concerning the designation of rate schemes for charging aqueduct services, there is special legislation of priority application that prevails, so that local corporations maintain that relative autonomy for setting such prices, requiring, in accordance with the legal system, to coordinate efforts with the Instituto de Fomento y Asesoría Municipal and the endorsement of the Autoridad Reguladora de los Servicios Públicos. This must be integrated with Article 3 of the Constitutive Law of the Instituto Costarricense de Acueductos y Alcantarillados, as it maintains the competence of the Municipal Council to agree on the fees and rates for the water service, \"upon prior legal and economic study to be carried out by the Instituto de Fomento y Asesoría Municipal, in consultation with the Instituto Costarricense de Acueductos y Alcantarillados\", which must finally be approved by ARESEP, within a period of thirty working days. Precisely, the Constitutional Chamber (Sala Constitucional) came to hold a thesis in this sense, in ruling 1999-5445 cited, for referring to Transitory Provision VIII of the Código de Normas y Procedimientos Tributarios, it stated:\n\n\"Warning must be made that this norm, in the judgment of the Chamber, was partially repealed by virtue of the Law of the Autoridad Reguladora de los Servicios Públicos, number 7593, of March twenty-eighth, nineteen ninety-six, by which the Autoridad Reguladora de los Servicios Públicos was created, to which corresponds the setting of prices and rates of the public services defined in Article 5 of its law, so that regarding local services, it only has competence to set rates for the collection and treatment of solid and industrial waste. That is, until the validity of the new Código Municipal, this Transitory Provision had full application to municipalities, regarding the setting of municipal fees, and as of Law 7593, it remains in force for what was not expressly transferred to the Regulatory Authority.\n\n...\n\nThis Tribunal considers that leaving solely to the discretion of municipal authorities the determination of the amounts that neighbors must pay as fees, without any prior control, is not only risky due to the abuses that can be committed, but also contrary to the constitutional principles of protection of the vast majorities. Therefore, it is necessary to establish a control, whether a priori or a posteriori, by the Contraloría General de la República, a control that, it is repeated, is strictly of legality, in order for it to verify that the proposed cost of the service is correct, to prevent municipalities from charging more than what is justly due. In this sense, it is worth noting that the only constitutionally possible participation by the Contraloría in the setting of municipal fees is that legality control, in which it could object to the fee that is disproportionate to the cost of the service intended to be charged, and obviously, would be legitimized to indicate the limit for modifying the fee so that it relates to the effective cost of the service, upon ruling on its approval; reasons for which Article 85 of the Código Municipal is not unconstitutional, nor is Transitory Provision VIII of the Código de Normas y Procedimientos Tributarios.\n\nArticle 74 of the current Código Municipal eliminated the intervention of the Contraloría for setting municipal fees, but the application of Transitory Provision VIII of the Código de Normas y Procedimientos Tributarios subsists, in the judgment of the Chamber, until the setting of fees and prices is transferred in its entirety to the Autoridad Reguladora de los Servicios Públicos.\"\n\nSubsequently, in clarification and addition of the previous ruling, the Constitutional Court held a thesis in a similar sense, in resolution No. 2000-07728 at fourteen hours forty-five minutes of August thirtieth, two thousand, reinforcing the topic of controls in rate setting, by saying that:\n\n\"The setting of these rates corresponds to the local governments themselves - in attention to their recognized tax autonomy -, in coordination with the respective State institutions. However, this does not mean that they are exempt from control, precisely because being left to the discretion of municipal authorities, the risk of abuse to the detriment of users increases, therefore a controlling body is required to make effective the constitutional principle of protection of the vast majorities. This body is the Contraloría General de la República, since the Law of the Autoridad Reguladora de los Servicios Públicos partially modified Transitory Provision VIII. of the Código de Normas y Procedimientos Tributarios, so that regarding municipal services, this entity corresponds to setting the prices and rates for the collection and treatment of solid and industrial waste, only, as established by Article 5 of Law 7593. Consequently, the control of the prices and rates of other services provided directly by municipalities corresponds at this time exclusively to the Contraloría General de la República, unless there is an express provision of a special law to that effect.\"\n\nIn another decision (Voto), when granting an amparo motion, the same Constitutional Chamber (Sala Constitucional) retook the topic of ARESEP's participation in setting rates for municipal aqueduct services, and provided:\n\n\"Regarding the rate increase for potable water service: In accordance with the provisions of Law 7593 (issued in development of constitutional numerals 50, 74 and 140 subsections 8 and 20) the Autoridad Reguladora de Servicios Públicos is the competent body to authorize the increase of rates for public services, and prior to executing a rate increase, the Municipality of Montes de Oro must request the respective authorization from ARESEP. In this sense, see ruling 5445-99 of 2:30 p.m. on July 14, 1999, which, in the pertinent part, indicates:\n\n...\n\nConsidering that in official letter 03749 of May tenth, two thousand, signed by the Director of User Services of the Autoridad Reguladora de Servicios Públicos, it is recorded that ARESEP has not approved increasing the rates for the potable water service administered by the Municipality of Montes de Oro (folio 157); that the neighbors of the IMAS Project complain about rate increases for the water service not proportional to its quality (folios 4, 74, 75, 76); that the President of the Municipal Council admits that the rate increases are based exclusively on a prior study prepared by IFAM (see folio 171, section 7; and copies of La Gaceta No. 81 of April 27 of the current year and No. 152 of the following August 9, visible on folios 214 and 217); that the rate increase in question has not been submitted for ARESEP's approval, the Municipality of Montes Oro has incurred a violation of the provisions of Articles 11, 50, 74 and 169 of the Constitution, as they require Municipal Governments to administer local interests and services within the limits imposed by the principle of legality (the procedures used to achieve the ends may not exceed the current legal system). Therefore, if the Municipality of Montes de Oro considers that the rate study visible on folio 224 and subsequent pages is consistent with the circumstances of the Canton and constitutes a suitable instrument to allow the maintenance process of the Miramar Aqueduct and the effective improvement of the potable water supply service to the community, it must communicate it as such to the Autoridad Reguladora de Servicios Públicos (under the terms contained in Law 7593), and it may not execute the charge corresponding to any rate increase of this type of service while it does not have the prior approval of ARESEP.\" (Emphasis added. See ruling No.\n\n2000-09972, at fourteen hours and thirty-one minutes on the eighth of November of two thousand.)\n\nVIII.- Within the list of grievances expressed by the appellant, the fact that the new rates were not definitively approved by the Contraloría General de la República is claimed. As set forth above, that institution currently does not hold such authority, but as has been stated, this function is the responsibility of the Autoridad Reguladora de los Servicios Públicos, since there is an express rule that assigns it this authority, which is non-delegable, non-waivable, and non-transferable (Article 66 of the Ley General de la Administración Pública), without this meaning a violation of the principle of municipal autonomy, which cannot be understood in an absolute manner, but rather within the environment of the Costa Rican State, integrally understood within its national-level organizational macrostructure. Without a doubt, the nullity defects of the appealed agreement exist, insofar as the legally established procedure for such purposes, explained above, has been violated, given that the Municipal Council, through the appealed agreement, independently proceeded to set the new rates without requesting the definitive approval of the responsible body. Furthermore, these rates were agreed upon without having been previously made known to the interested parties through the publication of the draft required by Article 3 of the Ley Constitutiva del Instituto Costarricense de Acueductos y Alcantarillados—transcribed above—so that they could pronounce themselves, thereby revealing another irremediable defect that merits, in light of Article 182.1 of the Ley General de la Administración Pública, upholding the grievances expressed in this regard and ordering the nullity of all proceedings, with the corresponding procedures needing to be reinstated in accordance with the Law.\n\nIX.- CRITERIA FOR DESIGNATING THE NEW PRICE OF THE SERVICE. Every public service is based on the principle of service at cost, which is understood as the duty to include within the price \"only the costs necessary to provide the service, which allow for a competitive return and guarantee the adequate development of the activity\" (Article 3, subsection c of the ARESEP Law - Law No. 7593 of August 9, 1996). This implies that the rate set must contemplate a percentage that includes the possibility of allowing its growth and development. It is not true, as the appellant understands, that future investments cannot be foreseen within the fixed price; rather, on the contrary, every responsible service must anticipate its maintenance and growth, which must necessarily be paid for by its users. There are legal criteria for defining these rates, in the Ley Constitutiva del Instituto Costarricense de Acueductos y Alcantarillados - Law 2726-, amended by Article 1 of Law No. 5915 of July 12, 1976, when establishing:\n\n\"ARTICLE 4.- For the setting of rates, criteria of distributive social justice shall be applied, which take into account the social strata and the zone to which the users belong, so that those with greater ability to pay subsidize those with lesser ability, with the purpose of obtaining income such that it responds to the financial policy that the corresponding legal rules indicate for the Institute.\n\nThe State and its social assistance institutions may subsidize, totally or partially, areas or groups of users who, due to their economic conditions, are incapacitated from paying the established rates.\"\n\nIndeed, the Código Municipal allows, in Article 74, that the fees and prices of the services provided include this additional item, stating that:\n\n\"Article 74.- For the services it provides, the municipality shall charge fees and prices, which shall be fixed taking into consideration the effective cost plus a ten percent (10%) utility to develop them. Once fixed, they shall take effect thirty days after their publication...\"\n\nThe new aqueduct price structure implemented in Tarrazú provided for a return for service development equivalent to 6.4% for 2010, 11.7% for 2011, 11.6% for 2012, 12.0% for 2013, and 12.3% for 2014; these exceeded the authorized legal provision, with the exception of the year 2010. An excess charge of this type can cause an overprice to fall upon the service user that is outside all legal authorization, making the service more expensive above the permitted legal margins, transferring it unjustifiably to the user. In the opinion of this Chamber, although it has not been demonstrated that the new rates are ruinous in the terms set forth in the appeal, they must be assumed on the basis of a reasonable price that adheres to the law. Without a doubt, this is a factor that, at first glance, must also be reviewed by local authorities.\n\nX.- It must also be added that Agreement No. 8 of the Municipal Council of Tarrazú, adopted in ordinary session No. 033-2010, held on December 15, 2010, which rejected the extraordinary motion for review, is also null insofar as the procedure that guaranteed the interested parties their due appearance, right of defense, and guarantee of due process was not respected. In any case, for the reasons stated, Agreement No. 1, definitively approved in ordinary session No. 204-2010, held on April 20, 2010, which definitively approved the new rate scheme, is null. By connection and consequence, the absolute nullity follows of the agreement adopted in the extraordinary session held on July 29, 2010, single article, wherein the modification of water rates with credit, presented by Mr. Jesús Solís Sánchez, was also agreed upon, as it suffers from the same procedural defects. The file must be returned to the Municipal Council of Tarrazú, so that the municipal body may resume its analysis and conform to the law, in such a way that it defines rate schemes based on a fair and proportionate setting within legal limits and rectifies the procedures.\n\nTHEREFORE:\n\nThe challenged agreement is annulled and, by connection and consequence, the agreement adopted by the Municipal Council of Tarrazú, in the extraordinary session held on July 29, 2010, single article. The file is ordered returned to the Municipality of origin, so that it may reinstate the procedure in accordance with the law.\n\nName66641\n\nEvelyn Solano Ulloa Name80986\n\nExp: 11-000584-1027-ca\n\nMunicipal\n\nPartido Tarrazú Primero v. Municipalidad de Tarrazú\n\nDrafted by Judge *Solano Ulloa*, and:\n\n**CONSIDERING:**\n\n**I.- PROVEN FACTS.** For a correct resolution of this matter, the following is taken as proven: **1)** That Mr. Jesús Solís Sánchez, an official of the Instituto de Fomento y Asesoría Municipal, prepared a proposal for rate reclassification of the municipal aqueduct of Tarrazú, called \"Rate Reclassification Aqueduct, Municipalidad de Tarrazú\". Within the proposal, and based on all types of service users and the rates existing up to that point, he observed in the table called \"Income, expenses and results -Current-\", that if the existing rate model continued, negative numbers for service development would be produced, of 5.3% for 2010, 5.6% for 2011, 6.2% for 2012, 7.1% for 2013, and 8.2% for 2014. As a result, he proposed a new rate scheme that corresponds to an increase of ¢2,800.00 per month regarding the fixed service and of ¢1,050 for the first 15 m3 of the metered service, which represents an increase of 147% and 91% respectively. This proposal was prepared based on the operating cost structure of the aqueduct and, with its modifications and impact in relative terms, is summarized as follows:\n\n| Blocks | Domiciliaria | Ordinaria | Reproductiva | Preferencial | Gobierno |\n|---|---|---|---|---|---|\n| Previous fixed service<br>Proposed fixed service | 1900<br>4700 | 3800<br>9400 | 5700<br>14.100 | 1900<br>4700 | 2850<br>7050 |\n| ***Percentage increase*** | ***147.36%*** | ***147.36%*** | ***147.36%*** | ***147.36%*** | ***147.36%*** |\n| **Metered service**<br>Base 0 to 15 mts3 previous<br>Base 0 to 15 mts3 proposed | <br>1150<br>2200 | <br>2300<br>4400 | <br>3450<br>6600 | <br>1150<br>2200 | <br>1725<br>3300 |\n| ***Increase*** | ***91.30%*** | ***91.30%*** | ***91.30%*** | ***91.30%*** | ***91.30%*** |\n| **16-25mts3 (per mts3)**<br> previous<br> proposed | <br>55<br>375 | <br>63.80<br>450 | <br>118.25<br>537.50<br> | <br>71.50<br>325.00 | <br>71.50<br>325.00 |\n| ***Increase*** | ***354.54%*** | ***354.54%*** | ***354.54%*** | ***354.54%*** | ***354.54%*** |\n| **26-40 mts3 (per mts3)**<br> previous<br> proposed | <br>Identificacion409<br> | <br><br> | <br><br>537.50 | <br>71.50<br>325 | <br>71.50<br>325 |\n| ***Increase*** | ***353.42%*** | ***355.05%*** | ***354.54%*** | ***354.54%*** | ***354.54%*** |\n\nLikewise, in the table called \"Investments Period 2010-2011\", it included the possibility of financing new purchases in various areas of development of the aqueduct system, namely: for the year 2010, 15 hydrant units with their installation, for the sum of forty million colones; four macro-meters for three and a half million, purchase of 200 water meters, for seven million colones, and for the year 2011, it foresaw the acquisition of lands with springs (terrenos con nacientes) for fifty million colones; for a total of one hundred one and a half million colones in investments. With the proposal, furthermore, a return for service development was forecast equivalent to 6.4% for 2010, 11.7% for 2011, 11.6 for 2012, 12.0 for 2013 and 12.3 for 2014 (see proposal in printed slide presentation, at folios 1 to 22, especially Investments table at folio 12, income and expenses table at folio 14, rate proposal at folio 15, income and expenses table with proposal at folio 17, as well as comparative at folio 170); **2)**\n\nThat in **definitively approved agreement No. 1 of the Municipal Council of Tarrazú, adopted at ordinary session No.**\n\n204-2010, held on April 20, 2010, it was textually ordered: \"*To approve the rate reclassification study of the Municipal Aqueduct Department, presented by Mr. Jesús Solís Sánchez, from the Instituto de Fomento y Asesoría Municipal, resulting as follows:*\n\n| Bloques | DOM. | ORD. | REPR. | PREF. | GOB. |\n| --- | --- | --- | --- | --- | --- |\n| SERV. FIJO | 4.700 | 9.400 | 14.100 | 4.700 | 7.050 |\n| SERV. MEDIDO O Base 15 m3 | 2200 | 4.400 | 6.600 | 2.200 | 3.300 |\n| 16-25 M3 | 250 | 290 | 537.50 | 325 | 325 |\n| 26-40 M3 | 375 | 450 | 537.50 | 325 | 325 |\n| 41-60 M3 | 375 | 450 | 537.50 | 325 | 325 |\n| 61-80 M3 | 562.50 | 750 | 537.50 | 325 | 325 |\n| 81-100 M3 | 562.50 | 750 | 537.50 | 787.50 | 787.50 |\n| 101-120 Placa16955 |  |  | 537.50 | 787.50 | 787.50 |\n| Más de 120 Placa16955 |  |  | 537.50 | 787.50 | 787.50 |\n\n(folios 26 and 26 verso); **3)** The new rate setting was published in the Official Gazette La Gaceta No. 87 of May 6, 2010, by Mrs. Adriana Vargas Solís, Administrator of the Municipal Aqueduct (an uncontested fact); **4)** Against the preceding agreement, in a brief filed on July 14, 2010, the representative of the Partido Tarrazú Primero formally filed an extraordinary appeal for review (recurso extraordinario de revisión). Said challenge was supplemented via a document filed on the following July 21 (folios 33 to 37); **5)** In an agreement reached by the Concejo Municipal de Tarrazú, in the extraordinary session held on July 29, 2010, single article, it was ordered to approve another modification of water rates with credit, presented by Mr. Jesús Solís Sánchez, with other prices lower than the previously agreed one (folios 44 and 45); **6)** A procedural directing body having been formed to hear the previous appeal, it ruled by resolution at 6:00 p.m. on December 14, 2010, recommending that the Concejo Municipal declare it without merit (folios 52 to 59); **7)** In the definitively approved agreement No. 8 of the Concejo Municipal de Tarrazú, taken in ordinary session No. 033-2010, held on December 15, 2010, notified on December 16, 2010, said recommendation was heard, which was approved and, therefore, the extraordinary appeal for review was rejected (folios 62); **8)** Against the previous agreement, by brief dated December 18, 2010, the representatives of the Partido Tarrazú Primero filed respective ordinary appeals, the revocation (revocatoria) being rejected by agreement No. 8, taken in ordinary session No. 036-2011 of January 5, 2011, with the appeal (apelación) being elevated to this Tribunal and the corresponding legal summons being granted (appeal at folios 63 to 71, agreement at folios 72 and 73); 9) At the request of the appellant party, this Tribunal granted a precautionary measure (medida cautelar) suspending the effects of the act under appeal, by resolution No. 215-2011 at 10:25 a.m. on June 9, 2011.\n\n**II.- UNPROVEN FACTS:** The appellant party has not demonstrated: **1)** That the new proposed rates are ruinous for the users of the service (the case file).\n\n**III.- SUBJECT OF THE APPEAL:** In its appeal brief, the representative of the Partido Tarrazú Primero retakes the arguments of the extraordinary appeal for review, which are summarized below: **1)** That it is not true that the agreement which set the new rates authorized its publication, something that Mrs. Adriana Vargas Solís, Administrator of the Municipal Aqueduct, did in the Official Gazette La Gaceta No.\n\n87 of May 6, 2010; 2) That the application of the new rate proved to be totally and absolutely disproportionate and ruinous for the canton's subscribers; 3) That the study conducted by Mr. Solís Sánchez included the financing of investments for the 2010-2011 period without these having been carried out, which is essential to contemplate within the public service rate; 4) That the agreement only approves the study, but not the rate proposal, nor does it include the rate schedule to be applied and its complementary elements; 5) That there is no legal or technical justification supporting the need to make the rate adjustment; 6) That no request was made for the approval of the rates before the Contraloría General de la República, in compliance with Transitory Provision VIII of the Código de Normas y Procedimientos Tributarios; 7) That in the procedure of the extraordinary appeal for review (recurso extraordinario de revisión), they were not granted a hearing to present and expand upon their arguments.\n\n**IV.- POSITION OF THE LOCAL GOVERNMENT.** The municipal authorities estimate that the actions taken respond to the powers conferred upon local governments by reason of their political, administrative, and financial autonomy, as provided in Articles 4 subsection d) and 13 subsection b) of the Código Municipal, with which the municipal council obtains the competence to approve fees and prices it charges for municipal services. It also relies on ruling No. 5445-99 of the Sala Constitucional, which established that the setting of fees corresponds to Local Governments, since Transitory Provision VIII of the Código de Normas y Procedimientos Tributarios, which provided that the setting of public prices corresponded to the Contraloría General de la República, was rendered without effect in resolution R-CO-70-2006 at 9:00 a.m. on September 4, 2006, of the Contraloría, upon considering that it was not within its competence. It states that with the decreed increase it can meet the investment projects that the service requires, whose procedure does not require holding any hearing for interested parties. It adds that these new rates contribute to the rational and responsible consumption of users, with bills being higher when consumption increases, in a canton where human development indices are high, thereby not generating any detriment to the merchants of the canton.\n\n**V.- CONTENT OF THE AGREEMENT ADOPTED BY THE MUNICIPAL COUNCIL OF TARRAZÚ IN ORDINARY SESSION NO. 204-2010.** From a comprehensive reading of agreement 1, definitively approved by the Municipal Council of Tarrazú in ordinary session no. 204-2010, article II, which gave rise to the extraordinary appeal for review (recurso extraordinario de revisión), this Court appreciates that in the present case, the study called \"Rate Reclassification for the Aqueduct, Municipality of Tarrazú\" (\"Recalificación de Tarifas Acueducto, Municipalidad de Tarrazú\"), prepared by Mr. Jesús Solís Sánchez, carried out a meticulous analysis of the financial situation that had been occurring in the Tarrazú aqueduct, which included all the rates and types of service users and, based on the administrative cost structure, proposed a new scheme that would additionally allow for certain investments that are necessary and indispensable for its development and continuity. Upon reviewing said analysis, in agreement No. 1, article II, of ordinary session No. 204-2010 held on April 20, 2010, the Municipal Council ordered its approval, including the new proposed rates. The interpretation made by the appellant party, to the effect that these rates were not approved in this agreement, is not shared by this Court, especially upon verifying that the transcription of the agreement details the new rate schedule. In fact, said study is emphatic in giving the technical and legal reasons for its implementation, as it is based on the very norms of the Código Municipal that authorize the annual review of public service prices, as well as on the need to obtain additional resources in order to make certain investments, starting from the basis of their operating cost, where the aqueduct's expenses, the nature and proportion of users are detailed, based on the current rates.\n\n**VI.- ON MUNICIPAL AUTONOMY.** The Local Government estimates that the actions taken are a consequence of the autonomy legally and constitutionally conferred upon municipalities, which can, through the Municipal Council, set the fees and public prices for the services they provide (Article 74 of the Código Municipal), thus including that of aqueducts. While it is true that this municipal autonomy derives from Article 170 of the Constitution, which materializes, par excellence, in the power of taxation to secure the necessary income to meet its obligations, with the initiative for the creation, modification, or extinction of local municipal taxes resting with the municipal corporations, it is also true that the setting of taxes requires, in any case, the approval of the Asamblea Legislativa. On this particular point, since ruling No. 1999-5445 at 2:30 p.m. on July 14, 1999—the same one cited by the municipal corporation of Tarrazú—it was indicated that the autonomy of municipalities is limited to the strictly local and, therefore, is relative; it is not full, exclusive, nor unlimited, remaining subject to certain limits derived from its immersion within the structure of the Costa Rican State. It is thus that municipalities have the obligation to coordinate certain functions with other institutions, in which a kind of \"inter-institutional cooperation\" arises, according to constitutional and legal mandate, which can transcend even to the macro-level of national planning, always within the framework of the law, without this implying subjection to the administrative supervision of the Poder Ejecutivo nor submission to any type of direction. This also explains the fact that local governments are subject to the fiscal, financial, accounting, and budgetary controls exercised by the Contraloría General de la República (Article 183 of the Constitution), in protection of the Public Treasury, a function that even encompasses the verification of the fulfillment of purposes and goals in response to criteria of efficiency and profitability, insofar as their parameters form part of the principle of legality (bloque de legalidad).\n\n**VII.- ON THE APPLICABLE PROCEDURE FOR SETTING RATES FOR THE COLLECTION OF SERVICES DERIVED FROM MUNICIPAL AQUEDUCTS.** The municipal legal system, since long ago, established a special system for setting rates for the collection of public services provided by local governments, without recognizing them the full autonomy that supports the thesis put forward by the local corporation of Tarrazú. For such effects, a historical overview of the development of this matter is provided below. Since the prior Código Municipal—Ley 4574 of May 4, 1970—repealed with the entry of the current Code—Ley No. 7794 published on May 18, 1998—a mechanism for setting fees was provided that required the participation of some body responsible for their approval and modification. It must be clarified that, at that time, there was no differentiation between the concepts of fee (tasa), rate (tarifa), and public price (precio público), terms that have been developed and differentiated by the most recent tax doctrine over the last twenty years. Said normative body provided:\n\n\"**Article 85.-** Municipal taxes, contributions, and fees shall enter into force once they have been approved in accordance with the law and published in the Diario Oficial.\n\n**The body responsible for approving municipal fees** may modify them when resolving on their approval.\" (highlighting added)\n\nAs can be seen, the existence of a \"body responsible for approving municipal fees\" was necessary, a competence that was defined in the **Código de Normas y Procedimientos Tributarios—Ley No. 4755 of May 3, 1971**, by providing:\n\n\"Article 5. Matters reserved exclusively to the law.-\n\n...\n\nIn relation to fees, when the law does not prohibit it, the Regulation thereof may vary its amount so that they fulfill their purpose in a more suitable manner, **after intervention of the body that by law is responsible for regulating the rates of public services.** \" (highlighting added)\n\nTransitory Provision VIII of the same Code provided that, until such regulatory body was created, the modification of said rates would be approved by the Contraloría General de la República. In this regard, said article indicated:\n\n\"Transitory Provision VIII.- As long as the specific body that will be in charge of setting the rates of public services is not established by law, the modification thereof, according to the power provided in the last paragraph of Article 5, shall require the prior approval of the Contraloría General de la República.\" (currently repealed by Ley 8823 of May 5, 2010, Article 51, published in the Diario Oficial La Gaceta of June 1, 2010)\n\n**In the matter of rates for municipal aqueduct services,** **Article 19 of the Ley de Reformas al Código Municipal y Otras Leyes—Ley 6890 of September 14, 1983—**, a norm in force since September 23, 1983, added to **Article 3 of the Ley Constitutiva del Instituto Costarricense de Acueductos y Alcantarillados—Ley 2726 of April 14, 1961—**, and **expressly provided the mechanism for their setting**, indicating that:\n\n\"ARTICLE 3.- It corresponds to the Instituto Costarricense de Acueductos y Alcantarillados to prepare the fees and rates for the public services referred to in this law, provided in the country by public or private companies.\n\n...\n\n**In the case of municipal aqueducts, the fees and rates for the water service concept shall be agreed upon by the Council, after a legal and economic study to be carried out by the Instituto de Fomento y Asesoría Municipal, in consultation with the Instituto Costarricense de Acueductos y Alcantarillados, and shall send them for publication as a project, submitting them for approval to the Servicio Nacional de Electricidad, which shall have a period of thirty business days to approve them or justify their rejection.**\n\nIn the opposite case, once this period has expired, the municipality shall put them into effect starting the month following the publication of the corresponding notice in the Diario Oficial.\"\n\n(The highlighting is added)\n\nAs a consequence of the application of this law, in September 1983, the body responsible for approving the rates of local aqueducts was defined, whose precision was addressed by Transitorio VIII of the Tax Code of Norms and Procedures, leaving that regulation without application. This power fell to the Servicio Nacional de Electricidad (SNE), through which the interventionist scheme of the Costa Rican State was reinforced, which began to promote, with this type of regulation, the regulation of public services. The SNE was subsequently transformed into the Autoridad Reguladora de los Servicios Públicos, by Ley N° 7593 of August 9, 1996, Article 1. Article 5 of this regulation expanded its sphere of powers and provided that the rates for public water supply and sewerage services, including potable water, collection, treatment, and disposal of black water, wastewater, and stormwater, would henceforth be set by said autonomous institution, without making any differentiation as to which entity was responsible for providing them. In this regard, for the topic of interest, the regulation stated:\n\n\"Article 5.- Functions\n\nIn the public services defined in this article, the Autoridad Reguladora shall set prices and rates; in addition, it shall ensure compliance with standards of quality, quantity, reliability, continuity, timeliness, and optimal provision, according to Article 25 of this law. The aforementioned public services are:\n\n....\n\nc) Supply of water supply and sewerage service, including potable water, collection, treatment, and disposal of black water, wastewater, and stormwater.\"\n\nThe text of subsection c) transcribed above was amended by Article 5 of Ley N° 8641 of June 11, 2008, leaving the current version as follows:\n\n\"c) Supply of water supply and sewerage service, including potable water, the collection, treatment, and disposal of black water, wastewater, and stormwater, as well as the installation, operation, and maintenance of the hydrant service.\"\n\nThese rules coexist and are in force alongside the current Código Municipal - Ley 7794 published in La Gaceta No. 94 of May 18, 1998 -, which attributes to the Concejo Municipal the power to approve the fees and prices it charges for municipal services, by expressly providing that:\n\n\"Article 13.- The powers of the Concejo are:\n\n...\n\nb) Agree on the budgets and approve the contributions, fees, and prices it charges for municipal services, as well as propose municipal tax projects to the Asamblea Legislativa.\"\n\nFrom the transcription of such laws and, in light of the criteria of autonomy and administrative oversight (tutela administrativa), there is no doubt that with regard to the designation of rate schemes for the charging of aqueduct services, there is special legislation of priority application that prevails, so that local corporations maintain that relative autonomy for setting such prices, requiring, in accordance with the legal system, to coordinate efforts with the Instituto de Fomento y Asesoría Municipal and the endorsement of the Autoridad Reguladora de los Servicios Públicos. This must be integrated with Article 3 of the Ley Constitutiva del Instituto Costarricense de Acueductos y Alcantarillados, as it maintains the power of the Concejo Municipal to agree on the fees and rates for water service, \"following a prior legal and economic study to be carried out by the Instituto de Fomento y Asesoría Municipal, in consultation with the Instituto Costarricense de Acueductos y Alcantarillados,\" which must be finally approved by the ARESEP, within a period of thirty working days. Precisely, the Sala Constitucional came to hold a thesis in this sense, in cited judgment 1999-5445, for, referring to Transitorio VIII of the Tax Code of Norms and Procedures, it indicated:\n\n\"It must be noted that this regulation, in the opinion of the Sala, was partially repealed by virtue of the Ley de la Autoridad Reguladora de los Servicios Públicos, number 7593, of March twenty-eighth, nineteen ninety-six, by which the Autoridad Reguladora de los Servicios Públicos was created, which is responsible for setting the prices and rates of the public services defined in Article 5 of its law, so that with respect to local services, it only has jurisdiction to set the rates for the collection and treatment of solid and industrial waste. That is, until the validity of the new Código Municipal, this Transitorio had full application to the municipalities, regarding the setting of municipal fees, and as of Ley 7593, it continues to be in force for that which was not expressly transferred to the Autoridad Reguladora.\n\n...\n\nThis Court considers that leaving the determination of the amounts that residents must pay in the form of fees solely to the discretion of the municipal authorities, without any prior control, is not only risky due to the abuses that may be committed, but also contrary to the constitutional principles of protection of the great majorities. Therefore, it is necessary to establish a control, whether a priori or a posteriori, by the Contraloría General de la República, a control that, it must be repeated, is strictly of legality, in order to verify that the proposed cost of the service is correct, to prevent the municipalities from charging more than what is justly due. In this sense, it should be noted that the only constitutionally possible participation by the Contraloría in the setting of municipal fees is that legality control, in which it could object to a fee that is disproportionate to the cost of the service intended to be charged, and obviously, it would be entitled to indicate the limit for modifying the fee so that it relates to the effective cost of the service, when resolving on its approval; reasons for which, Article 85 of the Código Municipal is not unconstitutional and neither is Transitorio VIII of the Tax Code of Norms and Procedures.\n\nArticle 74 of the current Código Municipal eliminated the intervention of the Contraloría for setting municipal fees, but the application of Transitorio VIII of the Tax Code of Norms and Procedures subsists, in the opinion of the Sala, as long as the setting of fees and prices has not been transferred in its entirety to the Autoridad Reguladora de los Servicios Públicos.\"\n\nSubsequently, in a clarification and addition to the previous judgment, the Tribunal Constitucional held a thesis in a similar sense, in Resolution No. 2000-07728 of fourteen hours and forty-five minutes of August thirtieth, two thousand, reinforcing the topic of controls in rate-setting, by stating that:\n\n\"The setting of these rates corresponds to the local governments themselves - in light of their recognized tax autonomy -, in coordination with the respective State institutions. However, this does not mean they are exempt from control, precisely because being left to the discretion of municipal authorities, the risk of abuse to the detriment of users increases, which requires a comptroller body to make effective the constitutional principle of protection of the great majorities. This body is the Contraloría General de la República since the Ley de la Autoridad Reguladora de los Servicios Públicos partially modified Transitorio VIII of the Tax Code of Norms and Procedures, such that regarding municipal services, that entity is responsible for setting the prices and rates for the collection and treatment of solid and industrial waste, only, as established by Article 5 of Ley 7593. Consequently, the control of prices and rates for other services directly provided by the municipalities currently corresponds exclusively to the Contraloría General de la República, unless an express provision of a special law to the contrary applies.\"\n\nIn another Voto, upon granting an amparo appeal, the same Sala Constitucional returned to the issue of the ARESEP's participation in setting rates for municipal aqueduct services, and ordered:\n\n\"Regarding the rate increase for the potable water service: In accordance with the provisions of Ley 7593 (issued in furtherance of constitutional sections 50, 74, and 140 subsections 8 and 20), the Autoridad Reguladora de Servicios Públicos is the competent body to authorize the increase of rates for public services, and prior to executing a rate increase, the Municipalidad de Montes de Oro must request the respective authorization from the ARESEP. In this sense, see judgment 5445-99 of 14:30 hours of July 14, 1999, which in relevant part indicates:\n\n...\n\nGiven that in official letter 03749 of May tenth, two thousand, signed by the Director of Customer Service of the Autoridad Reguladora de Servicios Públicos, it is recorded that the ARESEP has not approved increasing the rates for the potable water service administered by the Municipalidad de Montes de Oro (folio 157); that the neighbors of the Proyecto IMAS complain about rate increases for the water service not proportional to its quality (folios 4, 74, 75, 76); that the President of the Concejo Municipal admits that the rate increases are based exclusively on a prior study prepared by the IFAM (see folio 171, section 7; and copies of La Gaceta No. 81 of April 27 of the current year and No. 152 of August 9 following, visible at folios 214 and 217); that the rate increase in question has not been submitted for the approval of the ARESEP, the Municipalidad de Montes de Oro has incurred a violation of the provisions of constitutional articles 11, 50, 74, and 169, as they require Municipal Governments to administer local interests and services within the limits imposed by the principle of legality (the procedures used to achieve the ends may not exceed the current legal system). So, if the Municipalidad de Montes de Oro considers that the rate study visible at folio 224 and subsequent ones is in accordance with the circumstances of the Cantón and constitutes a suitable instrument to enable the maintenance process of the Acueducto Miramar and the effective improvement of the potable water supply service to the community, it must communicate this to the Autoridad Reguladora de Servicios Públicos (under the terms contained in Ley 7593), and it may not execute the collection corresponding to any rate increase for this type of service without having the prior approval of the ARESEP.\" (The bolding is added. See Judgment No. 2000-09972, of fourteen hours and thirty-one minutes of November eighth, two thousand.)\n\nVIII.- Within the list of grievances expressed by the appellant, it is claimed that the new rates were not definitively approved by the Contraloría General de la República. As set forth supra, currently that power is not the responsibility of that institution, but as has been stated, this function is indeed the responsibility of the Autoridad Reguladora de los Servicios Públicos, as there is an express regulation that designates this power to it, which is non-delegable, inalienable, and non-transferable (Article 66 of the Ley General de la Administración Pública), without this meaning a violation of the principle of municipal autonomy, which cannot be understood in an absolute manner, but rather within the environment of the Costa Rican State, understood integrally within its national-level macro-organizational structure. Without a doubt, the grounds for nullity of the agreement under appeal exist, insofar as the legally prescribed procedure for such purposes, explained in the preceding lines, has been violated, since the Concejo Municipal, through the agreement under appeal, proceeded independently to provide for the new rates, without requesting the definitive approval of the body responsible for this purpose. In addition, said rates were agreed upon without having been previously brought to the attention of the interested parties through the publication of the project mandated by Article 3 of the Ley Constitutiva del Instituto Costarricense de Acueductos y Alcantarillados - transcribed supra -, so that they could express their opinions, thereby evidencing another irremediable defect that merits, in light of Article 182.1 of the Ley General de la Administración Pública, upholding the grievances expressed in this sense and ordering the nullity of all proceedings, and the corresponding procedures must be restated, in accordance with the Law.\n\nIX.- CRITERIA FOR DESIGNATING THE NEW PRICE OF THE SERVICE. All public service is based on the principle of service at cost, which is understood as the duty to contemplate within the price \"only the costs necessary to provide the service, which allow a competitive return and guarantee the adequate development of the activity\" (Article 3 subsection c of the ARESEP Law - Ley No. 7593 of August 9, 1996), this implies that the rate set must contemplate a percentage that includes the possibility of allowing its growth and development. It is not true, as the appellant understands it, that future investments cannot be foreseen within the set price; rather, on the contrary, every responsible service must anticipate its maintenance and growth, which must necessarily be paid for by its users.\n\nThere are legal criteria for the definition of these rates, in the Constitutive Law of the Costa Rican Institute of Aqueducts and Sewers -Ley 2726-, amended by article 1 of Ley Nº 5915 of July 12, 1976, when it provides:\n\n\"ARTICULO 4º.- For the setting of rates, criteria of distributive social justice shall be applied, taking into account the social strata and the zone to which the users belong, so that those with greater payment capacity subsidize those with lesser capacity, with the purpose of obtaining such income that responds to the financial policy that the corresponding legal norms establish for the Institute.\n\nThe State and its social assistance institutions may subsidize, totally or partially, areas or groups of users who, due to their economic conditions, are unable to pay the established rates.\"\n\nFurthermore, the Municipal Code allows, in article 74, that the fees and prices of the services it provides include this additional item, by stating that:\n\n\"Artículo 74.- For the services it provides, the municipality shall charge fees and prices, which shall be set taking into consideration the effective cost plus a ten percent (10%) utility to develop them. Once set, they shall enter into force thirty days after their publication...\"\n\nThe new aqueduct price structure implemented in Tarrazú foresaw a return for service development equivalent to 6.4% for 2010, 11.7% for 2011, 11.6 for 2012, 12.0 for 2013, and 12.3 for 2014; these exceeded the planned legal authorization, with the exception of the year 2010. An overcharge of this type can cause the service user to bear a surcharge that is outside any legal authorization, making the service more expensive above the permitted legal margins, unjustifiably transferring it to the user. In the opinion of this Chamber, although it has not been demonstrated that the new rates are ruinous in the terms set forth in the appeal, these must be assumed on the basis of a reasonable price that adheres to the law. Undoubtedly, this is a factor that, at first glance, must also be reviewed by the local authorities.\n\n**X.-** It must be added, moreover, that Agreement No. 8 of the Municipal Council of Tarrazú, taken at the ordinary session No. 033-2010, held on December 15, 2010, which rejected the extraordinary motion for review, is also null insofar as the procedure that would guarantee the interested parties their proper appearance, right of defense, and guarantee of due process was not respected. In any case, for the reasons stated, Agreement No. 1 definitively approved at the ordinary session No. 204-2010, held on April 20, 2010, which definitively approved the new rate scheme, is null. By connection and consequence, the absolute nullity arises of the agreement taken at the extraordinary session held on July 29, 2010, single article, wherein the modification of water rates with credit, presented by Mr. Jesús Solís Sánchez, was also agreed upon, as it suffers from the same procedural defects. The file must be returned to the Municipal Council of Tarrazú, so that the council body may resume its analysis and adjust to the law, in such a way that it defines rate schemes on the basis of a fair and proportional setting within legal limits and rectifies the procedures.\n\n**POR TANTO:**\n\nThe challenged agreement is annulled and, by connection and consequence, the agreement taken by the Municipal Council of Tarrazú, at the extraordinary session held on July 29, 2010, single article. It is ordered to return the file to the Municipality of origin, so that it may reestablish the procedure in accordance with the law.\n\n**V.- CONTENT OF THE AGREEMENT ADOPTED BY THE MUNICIPAL COUNCIL OF TARRAZÚ IN ORDINARY SESSION NO. 204-2010.** From a comprehensive reading of agreement 1, definitively approved by the Municipal Council of Tarrazú in ordinary session no. 204-2010, article II, which gave rise to the extraordinary appeal for review, this Tribunal observes that in the present case, the study called \"Recalificación de Tarifas Acueducto, Municipalidad de Tarrazú\", prepared by Mr. Jesús Solís Sánchez, carried out a detailed analysis of the financial situation that had been occurring in the Tarrazú aqueduct, which included all rates and types of service users and, based on the administrative cost structure, proposed a new scheme that would additionally allow for certain investments that are essential for its development and continuity. Upon reviewing this analysis, in Agreement No.\n\n1, article II, of the ordinary session No. 204-2010 held on April 20, 2010, the Municipal Council ordered its approval, including the new proposed rates. The interpretation made by the appellant, to the effect that these rates were not approved in this agreement, is not shared by this Tribunal, especially upon verifying that the transcript of the agreement details the new rate scheme. Indeed, this study is emphatic in providing the technical and legal reasons for its implementation, as it is based on the very provisions of the Municipal Code that authorize the annual review of public service prices, as well as on the need to obtain additional resources in order to make certain investments, based on their operating costs, where the aqueduct expenses, the nature and proportion of users are detailed, on the basis of the current rates.\n\n**VI.- ON MUNICIPAL AUTONOMY.** The Local Government considers that its actions are a consequence of the autonomy legally and constitutionally conferred upon the municipalities (municipalidades), which may, through the Municipal Council, set the rates and public prices of the services they provide (article 74 of the Municipal Code), thus including that of aqueducts. While it is true that this municipal autonomy derives from Article 170 of the Constitution, which materializes, par excellence, in the taxing or tributary power to procure the necessary income to meet their obligations, leaving to the municipal corporations the initiative for the creation, modification, or extinction of local municipal taxes, it is also true that the setting of taxes requires, in any case, the approval of the Legislative Assembly. On this point, since Judgment No. 1999-5445 of 2:30 p.m. on July 14, 1999 – a ruling cited by the municipal corporation of Tarrazú – it was stated that the autonomy of municipalities is limited to the strictly local and, therefore, is relative; it is not full, exclusive, or unlimited, being subject to certain limits derived from their immersion within the structure of the Costa Rican State. Thus, municipalities have the obligation to coordinate certain functions with other institutions, in which a kind of \"inter-institutional concerted action\" arises, according to constitutional and legal mandate, which can transcend to the macro-level of national planning, always within the framework of the law, without this meaning subjection to the administrative oversight (tutela administrativa) of the Executive Branch or submission to any type of direction. This also accounts for the fact that local governments are subject to the fiscal, financial, accounting, and budgetary controls exercised by the Comptroller General of the Republic (Contraloría General de la República) (Article 183 of the Constitution), in safeguarding the Public Treasury (Hacienda Pública), a function that even includes verifying the fulfillment of purposes and goals in response to criteria of efficiency and profitability, insofar as their parameters form part of the legality framework.\n\n**VII.- ON THE APPLICABLE PROCEDURE FOR SETTING RATES FOR THE COLLECTION OF SERVICES DERIVED FROM MUNICIPAL AQUEDUCTS.** The municipal legal system has, for a long time, established a special system for setting rates for the collection of public services provided by local governments, without recognizing them the full autonomy that underlies the thesis argued by the local corporation of Tarrazú. For such purposes, we shall now take a historical look at the development of this matter. From the previous Municipal Code – Law 4574 of May 4, 1970 – repealed upon the entry into force of the current Code – Law No. 7794 published on May 18, 1998 – a rate-setting mechanism was provided that required the participation of some body responsible for its approval and modification. It must be clarified that, at that time, there was no differentiation between the concepts of tax (tasa), rate (tarifa), and public price (precio público), terms that have been developed and differentiated by the most recent tax doctrine over the last twenty years. Said regulatory body provided:\n\n> ***\"Article 85.-** Municipal taxes, contributions, and rates (tasas) shall enter into force once they have been approved in accordance with the law and published in the Official Gazette.*\n>\n> ***The body responsible for approving municipal rates (tasas)** may modify them when deciding on their approval.\"* (emphasis added)\n\nAs can be seen, the existence of a \"body responsible for approving municipal rates (tasas)\" was necessary, a competence that was defined in the **Code of Tax Rules and Procedures – Law No. 4755 of May 3, 1971**, when providing:\n\n> *\"Article 5. Matters within the exclusive province of the law.-*\n>\n> *...*\n>\n> *In relation to rates (tasas), when not prohibited by law, the Regulations of the same may vary their amount so that they fulfill their purpose in a more suitable manner, **following the intervention of the body that by law is responsible for regulating the rates (tarifas) of public services.**\"* (emphasis added)\n\nTransitory Provision VIII of the same Code provided that, until such a regulatory body was created, the modification of said rates would be approved by the Comptroller General of the Republic. In this regard, said ordinal stated:\n\n> *\"Transitory VIII.- As long as the specific body responsible for setting the rates (tarifas) of public services is not established by law, the modification thereof, in accordance with the power provided in the last paragraph of Article 5, shall require the prior approval of the Comptroller General of the Republic.\"* (currently repealed by Law 8823 of May 5, 2010, Article 51, published in the Official Gazette La Gaceta of June 1, 2010)\n\n**Regarding rates for municipal aqueduct services, Article 19 of the Law of Reforms to the Municipal Code and Other Laws – Law 6890 of September 14, 1983**, a rule in force since September 23, 1983, **added Article 3 of the Constitutive Law of the Costa Rican Institute of Aqueducts and Sewers – Law 2726 of April 14, 1961**, and **expressly provided the mechanism for their setting**, indicating that:\n\n> *\"ARTICLE 3.- The Costa Rican Institute of Aqueducts and Sewers is responsible for preparing the taxes (tasas) and rates (tarifas) for the public services referred to in this law, provided in the country by public or private enterprises.*\n>\n> *...*\n>\n> ***In the case of municipal aqueducts, the taxes (tasas) and rates (tarifas) for water service shall be agreed upon by the Council, following a legal and economic study to be carried out by the Institute of Municipal Development and Advisory (Instituto de Fomento y Asesoría Municipal), in consultation with the Costa Rican Institute of Aqueducts and Sewers, and shall send them for publication as a draft, submitting them for approval to the National Electricity Service (Servicio Nacional de Electricidad), which shall have a period of thirty business days to approve them or justify their rejection.***\n>\n> *Otherwise, once this period has expired, the municipality shall put them into effect starting from the month following the publication of the corresponding notice in the Official Gazette.\"* (emphasis added)\n\nAs a consequence of the application of this law, in September 1983, the body responsible for the approval of local aqueduct rates (tarifas) – whose specification was called for by Transitory Provision VIII of the Code of Tax Rules and Procedures – was defined, thus rendering that rule inapplicable. This competence fell to the National Electricity Service (SNE), through which the interventionist scheme of the Costa Rican State, which was beginning to promote, through this type of rules, the regulation of public services, was reinforced. The SNE was subsequently transformed into the Regulatory Authority of Public Services (Autoridad Reguladora de los Servicios Públicos), through Law No. 7593 of August 9, 1996, Article 1. Article 5 of this rule expanded its sphere of competencies and provided that the rates (tarifas) for the public services of aqueduct and sewerage, including potable water, collection, treatment, and evacuation of black water, residual water, and rainwater, would henceforth be set by said autonomous institution, without making any differentiation as to which entity was responsible for providing them. In this regard, for the matter of interest, the rule dictated:\n\n> ***\"Article 5.- Functions***\n>\n> *In the public services defined in this article, the Regulatory Authority shall set prices and rates (tarifas); furthermore, it shall ensure compliance with the standards of quality, quantity, reliability, continuity, timeliness, and optimal provision, according to Article 25 of this law. The aforementioned public services are:*\n>\n> *....*\n>\n> *c) Supply of the service of aqueduct and sewerage, including potable water, collection, treatment, and evacuation of black water, residual water, and rainwater.\"*\n\nThe text of subsection c) transcribed above was reformed by Article 5 of Law No. 8641 of June 11, 2008, the current version being as follows:\n\n> *\"c) Supply of the service of aqueduct and sewerage, including potable water, collection, treatment, and evacuation of black water, residual water, and rainwater, as well as the installation, operation, and maintenance of the fire hydrant service.\"*\n\nThese norms coexist and are in force with the current Municipal Code – Law 7794 published in La Gaceta No. 94 of May 18, 1998 – which attributes to the Municipal Council the competence to approve the taxes (tasas) and prices it charges for municipal services, by expressly providing that:\n\n> *\"Article 13.- The powers of the Council are:*\n>\n> *...*\n>\n> *b) To agree on budgets and approve the contributions, taxes (tasas), and prices charged for municipal services, as well as to propose municipal tax projects to the Legislative Assembly.\"*\n\nFrom the transcription of such laws and, in light of the criteria of autonomy and administrative oversight (tutela administrativa), there is no doubt that with respect to the designation of rate schemes for the collection of aqueduct services, there exists special legislation of priority application that prevails, such that local corporations maintain that relative autonomy for the setting of such prices, requiring, in accordance with the legal system, to coordinate efforts with the Institute of Municipal Development and Advisory and the endorsement of the Regulatory Authority of Public Services. This must be integrated with Article 3 of the Constitutive Law of the Costa Rican Institute of Aqueducts and Sewers, **as it maintains the competence of the Municipal Council to agree on the taxes (tasas) and rates (tarifas) for water service, *\"following a legal and economic study to be carried out by the Institute of Municipal Development and Advisory, in consultation with the Costa Rican Institute of Aqueducts and Sewers\"***, which must finally be approved by ARESEP, within a period of thirty business days. Precisely, the Constitutional Chamber (Sala Constitucional) came to uphold a thesis in this sense, in the cited Judgment 1999-5445, since, referring to Transitory Provision VIII of the Code of Tax Rules and Procedures, it stated:\n\n> *\"It must be noted that this rule, in the judgment of the Chamber, was partially repealed by virtue of the Law of the Regulatory Authority of Public Services, number 7593, of March twenty-eighth, nineteen ninety-six, by which the Regulatory Authority of Public Services was created, which is responsible for setting the prices and rates (tarifas) of the public services defined in Article 5 of its law, so that regarding local services, it only has competence to set the rates (tarifas) for the collection and treatment of solid and industrial waste. That is to say, until the validity of the new Municipal Code, this Transitory Provision had full application to the municipalities, as regards the setting of municipal rates (tasas), and from Law 7593 onwards, it continues to be in force for that which was not expressly transferred to the Regulatory Authority.*\n>\n> *...*\n>\n> *This Tribunal considers that leaving the determination of the amounts that residents must pay for rates (tasas) solely to the discretion of municipal authorities, without any prior control, is not only risky due to the abuses that can be committed, but contrary to the constitutional principles of protecting the vast majorities. Therefore, it is necessary to establish a control, be it a priori or a posteriori, by the Comptroller General of the Republic, a control which, it is repeated, is strictly one of legality, in order to verify that the proposed cost of the service is correct, to prevent municipalities from charging more than what is justly due. In this sense, it is worth noting that the only constitutionally possible participation by the Comptroller in setting municipal rates (tasas) is this legality control, in which it could object to a rate that is disproportionate to the cost of the service being charged, and obviously, it would be empowered to indicate the limit for modifying the rate so that it relates to the effective cost of the service, when deciding on its approval; for these reasons, Article 85 of the Municipal Code is not unconstitutional, nor is Transitory Provision VIII of the Code of Tax Rules and Procedures.*\n>\n> *Article 74 of the current Municipal Code eliminated the intervention of the Comptroller for setting municipal rates (tasas), but the application of Transitory Provision VIII of the Code of Tax Rules and Procedures persists, in the judgment of the Chamber, until the setting of rates (tasas) and prices is transferred in its entirety to the Regulatory Authority of Public Services.\"*\n\nSubsequently, in a clarification and addition to the previous judgment, the Constitutional Tribunal upheld a thesis along similar lines, in Resolution No. 2000-07728 of two forty-five p.m. on August thirtieth, two thousand, reinforcing the issue of controls in setting rates, by stating that:\n\n> *\"The setting of these rates (tarifas) corresponds to the local governments themselves – in view of their recognized tax autonomy – in coordination with the respective State institutions. However, this does not mean they are exempt from control, precisely because it is left to the discretion of the municipal authorities, the risk of abuse to the detriment of users increases, which is why a comptroller body is required to make effective the constitutional principle of protecting the vast majorities. This body is the Comptroller General of the Republic, since the Law of the Regulatory Authority of Public Services partially modified Transitory Provision VIII of the Code of Tax Rules and Procedures, in such a way that regarding municipal services, that entity is responsible for setting the prices and rates (tarifas) for the collection and treatment of solid and industrial waste, only, as established in Article 5 of Law 7593.*\n\nConsequently, the control of prices and rates for other services provided directly by municipalities is now exclusively the responsibility of the General Comptroller of the Republic (Contraloría General de la República), unless an express provision in a special law states otherwise.\"\n\nIn another Voto, when granting a recurso de amparo, the same Constitutional Chamber (Sala Constitucional) revisited the issue of ARESEP's participation in setting rates for municipal aqueduct services, and ordered:\n\n\"Regarding the rate increase for the potable water service: Pursuant to the provisions of Law 7593 (issued in development of constitutional articles 50, 74, and 140 subsections 8 and 20), the Public Services Regulatory Authority (Autoridad Reguladora de Servicios Públicos, ARESEP) is the competent body to authorize rate increases for public services, and prior to executing a rate increase, the Municipality of Montes de Oro (Municipalidad de Montes de Oro) must request the respective authorization from ARESEP. In this regard, see judgment 5445-99 of 14:30 hours of July 14, 1999, which states where pertinent:\n\n...\n\nWhereas in official communication 03749 of May tenth, two thousand, signed by the Director of User Services of the Public Services Regulatory Authority (Autoridad Reguladora de Servicios Públicos), it is recorded that ARESEP has not approved an increase in the rates for the potable water service administered by the Municipality of Montes de Oro (folio 157); that the residents of the IMAS Project complain about rate increases in the water service that are not proportional to its quality (folios 4, 74, 75, 76); that the President of the Municipal Council admits that the rate increases are based exclusively on a prior study prepared by IFAM (see folio 171, section 7; and copies of La Gaceta No. 81 of April 27 of the current year and No. 152 of the following August 9, visible on folios 214 and 217); that the rate increase in question has not been submitted for ARESEP's approval, the Municipality of Montes Oro has incurred a violation of the provisions of constitutional articles 11, 50, 74, and 169, insofar as they require Municipal Governments to administer local interests and services within the limits imposed by the principle of legality (the procedures used for achieving objectives may not exceed the current legal system). Therefore, if the Municipality of Montes de Oro considers that the rate study visible on folio 224 and subsequent pages is consistent with the Canton's circumstances and constitutes a suitable instrument to enable the maintenance process of the Miramar Aqueduct and the effective improvement of the potable water supply service to the community, it must communicate this to the Public Services Regulatory Authority (in the terms contained in Law 7593), and it may not execute the corresponding charge for any rate increase of this type of service until it has obtained the prior approval of ARESEP.\" (Emphasis added. See judgment No. 2000-09972, of fourteen hours and thirty-one minutes of November eighth, two thousand.)\n\n**VIII.-** Among the list of grievances expressed by the appellant, a complaint is made regarding the fact that the new rates were not definitively approved by the General Comptroller of the Republic (Contraloría General de la República). As set forth above, this function does not currently belong to that institution, but as has been explained, this function is the responsibility of the Public Services Regulatory Authority (Autoridad Reguladora de los Servicios Públicos), since there is an express regulation that assigns it this authority, which is non-delegable, inalienable, and non-transferable (article 66 of the General Law of Public Administration (Ley General de la Administración Pública)), without this signifying a violation of the principle of municipal autonomy, which cannot be understood in absolute terms, but rather within the environment of the Costa Rican State, understood integrally within its national-level organizational macrostructure. Without a doubt, the grounds for nullity of the agreement under appeal exist, insofar as the legal procedure provided for such purposes, explained in the preceding lines, has been violated, since the Municipal Council, through the agreement under appeal, proceeded independently to decree the new rates, without requesting the definitive approval of the responsible body for this purpose. Furthermore, said rates were agreed upon without having been previously disclosed to interested parties through the publication of the draft ordered by article 3 of the Constitutive Law of the Costa Rican Institute of Aqueducts and Sewers (Ley Constitutiva del Instituto Costarricense de Acueductos y Alcantarillados) - transcribed above - so that they could comment, thereby evidencing another irremediable defect that warrants, in light of article 182.1 of the General Law of Public Administration (Ley General de la Administración Pública), upholding the grievances expressed in this regard and ordering the nullity of all proceedings, requiring that the appropriate procedures be reinitiated, in accordance with the Law.\n\n**IX.- CRITERIA FOR THE DESIGNATION OF THE NEW SERVICE PRICE**. Every public service is based on the principle of cost-of-service, which is understood as the duty to include in the price \"only the costs necessary to provide the service, that allow for a competitive return and guarantee the adequate development of the activity\" (article 3, subsection c of the ARESEP Law - Law No. 7593 of August 9, 1996), which implies that the rate set must include a percentage that allows for its growth and development. It is not true, as the appellant understands, that future investments cannot be provided for within the set price; rather, quite the contrary, any responsible service must anticipate its maintenance and growth, which must necessarily be financed by its users. There are legal criteria for defining these rates, in the Constitutive Law of the Costa Rican Institute of Aqueducts and Sewers (Ley Constitutiva del Instituto Costarricense de Acueductos y Alcantarillados) - Law 2726 -, reformed through article 1 of Law No. 5915 of July 12, 1976, by stating:\n\n\"ARTICLE 4.- For rate-setting, criteria of social distributive justice shall be applied, which take into account the social strata and the zone to which the users belong, such that those with a greater ability to pay subsidize those with lesser ability, with the purpose of obtaining income that responds to the financial policy established for the Institute by the corresponding legal norms.\n\nThe State and its social welfare institutions may fully or partially subsidize areas or groups of users who, due to their economic conditions, are unable to pay the established rates.\"\n\nEven the Código Municipal allows, in article 74, that the charges and prices of the services it provides include this additional item, by stating that:\n\n\"Article 74.- For the services it provides, the municipality shall charge fees and prices, which shall be set taking into consideration the effective cost plus a ten percent (10%) utility for their development. Once set, they shall come into effect thirty days after their publication...\"\n\nThe new aqueduct price structure implemented in Tarrazú provided a return for service development equivalent to 6.4% for 2010, 11.7% for 2011, 11.6 for 2012, 12.0 for 2013, and 12.3 for 2014; these exceeded the legal authorization provided, with the exception of the year 2010. An overcharge of this type can cause a surcharge that is outside of any legal authorization to fall on the service user, making the service more expensive beyond the permitted legal margins, unjustifiably transferring it to the user. In the opinion of this Chamber, although it has not been demonstrated that the new rates are ruinous in the terms set forth in the appeal, they must be assumed on the basis of a reasonable price that adheres to the law. Without a doubt, this is a factor that, at first glance, should also be reviewed by the local authorities.\n\n**X.-** It must also be added that agreement No. 8 of the Municipal Council of Tarrazú, adopted in ordinary session No. 033-2010, held on December 15, 2010, which rejected the recurso extraordinario de revisión, is also null insofar as the procedure that would guarantee interested parties their proper appearance, right of defense, and guarantee of due process was not respected. In any event, for the reasons stated, agreement No. 1 definitively approved in ordinary session No. 204-2010, held on April 20, 2010, which definitively approved the new rate scheme, is null. By connection and consequence, the absolute nullity of the agreement adopted in the extraordinary session held on July 29, 2010, single article, in which the modification of water rates with credit, presented by Mr. Jesús Solís Sánchez, was also agreed upon, results, as it suffers from the same procedural defects. The file must be returned to the Municipal Council of Tarrazú, so that the council may resume its analysis and conform to the law, in a way that defines rate schemes based on a fair and proportionate setting within legal limits and corrects the procedures.\"\n\nDrafted by Judge *Solano Ulloa*, and:\n\n**CONSIDERING:**\n\n**I.- PROVEN FACTS.** For a correct resolution of this matter, the following is considered proven: **1)** That Mr. Jesús Solís Sánchez, an official of the Instituto de Fomento y Asesoría Municipal, prepared a proposal for the reclassification of rates for the Tarrazú municipal aqueduct, called \"Recalificación de Tarifas Acueducto, Municipalidad de Tarrazú\". Within the proposal, and based on all types of service users and the rates existing up to that point, he noted in the table called \"Ingresos, gastos y resultados -Vigente-\" that, if the existing rate model were to continue, negative numbers for service development would result, of 5.3% for 2010, 5.6% for 2011, 6.2% for 2012, 7.1% for 2013, and 8.2% for 2014. As a result, he proposed a new rate scheme corresponding to an increase of ¢2,800.00 per month for the fixed service and ¢1,050 for the first 15 m3 of the metered service, which represents an increase of 147% and 91% respectively. Said proposal was prepared based on the operating cost structure of the aqueduct and, with its modifications and impact in relative terms, is summarized as follows:\n\n| Blocks | Domiciliary | Ordinary | Reproductive | Preferential | Government |\n|---|---|---|---|---|---|\n| Previous fixed service Proposed fixed service | 1900 4700 | 3800 9400 | 5700 14,100 | 1900 4700 | 2850 7050 |\n| ***Percentage increase*** | ***147.36%*** | ***147.36%*** | ***147.36%*** | ***147.36%*** | ***147.36%*** |\n| **Metered service** Base 0 to 15 mts3 previous Base 0 to 15 mts3 proposed |  1150 2200 |  2300 4400 |  3450 6600 |  1150 2200 |  1725 3300 |\n| ***Increase*** | ***91.30%*** | ***91.30%*** | ***91.30%*** | ***91.30%*** | ***91.30%*** |\n| **16-25mts3** ** (per mts3)**  previous proposed |  55 375 |  63.80 450 |  118.25 537.50  |  71.50 325.00 |  71.50 325.00 |\n| ***Increase*** | ***354.54%*** | ***354.54%*** | ***354.54%*** | ***354.54%*** | ***354.54%*** |\n| **26-40 mts3 (per mts3)** previous proposed |  Identificacion409  |    |   537.50 |  71.50 325 |  71.50 325 |\n| ***Increase*** | ***353.42%*** | ***355.05%*** | ***354.54%*** | ***354.54%*** | ***354.54%*** |\n\nLikewise, in the table called \"Inversiones Período 2010-2011\", it included the possibility of financing new purchases in several areas of aqueduct system development, namely: for the year 2010, 15 hydrant units with their installation, for the sum of forty million colones; four bulk meters for three and a half million, purchase of 200 hydrometers, for seven million colones, and for the year 2011, it foresaw the acquisition of lands with springs (terrenos con nacientes) for fifty million colones; for a total of one hundred one and a half million colones in investments. With the proposal, moreover, a return for service development equivalent to 6.4% was forecast for 2010, 11.7% for 2011, 11.6 for 2012, 12.0 for 2013, and 12.3 for 2014 (see proposal in printed slide presentation, on folios 1 to 22, especially the Inversiones table on folio 12, the income and expenses table on folio 14, the rate proposal on folio 15, the income and expenses table with the proposal on folio 17, as well as the comparison on folio 170); **2)**\n\nIn definitively approved agreement No. 1 of the Municipal Council of Tarrazú, adopted at ordinary session No.\n\n204-2010, held on April 20, 2010, it was textually ordered: \"Approve the tariff reclassification study of the Department of Municipal Aqueduct, presented by Mr. Jesús Solís Sánchez, of the Instituto de Fomento y Asesoría Municipal, resulting as follows:\n\n| Bloques | DOM. | ORD. | REPR. | PREF. | GOB. |\n| --- | --- | --- | --- | --- | --- |\n| SERV. FIJO | 4.700 | 9.400 | 14.100 | 4.700 | 7.050 |\n| SERV. MEDIDO O Base 15 m3 | 2200 | 4.400 | 6.600 | 2.200 | 3.300 |\n| 16-25 M3 | 250 | 290 | 537.50 | 325 | 325 |\n| 26-40 M3 | 375 | 450 | 537.50 | 325 | 325 |\n| 41-60 M3 | 375 | 450 | 537.50 | 325 | 325 |\n| 61-80 M3 | 562.50 | 750 | 537.50 | 325 | 325 |\n| 81-100 M3 | 562.50 | 750 | 537.50 | 787.50 | 787.50 |\n| 101-120 Placa16955 |  |  | 537.50 | 787.50 | 787.50 |\n| Más de 120 Placa16955 |  |  | 537.50 | 787.50 | 787.50 |\n\n(folios 26 and 26 verso); 3) The new tariff setting was published in the Official Gazette La Gaceta No. 87 of May 06, 2010, by Mrs. Adriana Vargas Solís, Administrator of the Municipal Aqueduct (an undisputed fact), 4) Against the previous agreement, in a brief filed on July 14, 2010, the representative of the Partido Tarrazú Primero filed a formal extraordinary motion for review (recurso extraordinario de revisión). Said challenge was supplemented by a document filed on the following July 21 (folios 33 to 37); 5) In an agreement reached by the Municipal Council of Tarrazú, in the extraordinary session held on July 29, 2010, sole article, it was ordered to approve another modification of water tariffs with credit, presented by Mr. Jesús Solís Sánchez, with other lower prices than the previously agreed upon (folios 44 and 45); 6) Having formed a directing body of the procedure, for the purpose of hearing the previous motion, it ruled by resolution at 18:00 hours on December 14, 2010, recommending that the Municipal Council declare it without merit (folios 52 to 59); 7) In the definitively approved agreement No. 8 of the Municipal Council of Tarrazú, taken in ordinary session No. 033-2010, held on December 15, 2010, notified on December 16, 2010, said recommendation was heard, which was approved and, therefore, the extraordinary motion for review filed was rejected (folios 62); 8) Against the previous agreement, by brief dated December 18, 2010, the representatives of the Partido Tarrazú Primero filed respective ordinary motions, resulting in the revocation being rejected by agreement No. 8, taken in ordinary session No. 036-2011 of January 5, 2011, elevating the appeal to this Court and granting the corresponding legal summons (motion at folios 63 to 71, agreement at folios 72 and 73); 9) At the request of the appellant party, this Court granted a precautionary measure of suspension of the effects of the act being appealed, by resolution No. 215-2011 at 10:25 hours on June 9, 2011.\n\nII.- UNPROVEN FACTS: The appellant party has not demonstrated: 1) That the proposed new tariffs are ruinous for the users of the service (the case file).\n\nIII.- SUBJECT OF THE APPEAL: In its petition for appeal, the representative of the Partido Tarrazú Primero retakes the arguments of the extraordinary motion for review, which are summarized as follows: 1) That it is not true that the agreement that set the new tariffs had authorized their publication, something that Mrs. Adriana Vargas Solís, Administrator of the Municipal Aqueduct, carried out in the Official Gazette La Gaceta No.\n\n87 of May 6, 2010; 2) That the application of the new rate turned out to be totally and absolutely disproportionate and ruinous for the canton's subscribers; 3) That the study carried out by Mr. Solís Sánchez included the financing of investments for the 2010-2011 period without these having been made, which is fundamental to contemplate it within the public service rate; 4) That the agreement only approves the study, but not the rate proposal, nor does it include the rate table to be applied and its complementary elements; 5) That there is no legal or technical justification that supports the need to make the rate adjustment; 6) That they did not proceed to request the approval of the rates before the Contraloría General de la República, in accordance with Transitory Provision VIII of the Código de Normas y Procedimientos Tributarios; 7) That in the procedure of the extraordinary appeal for review, they were not granted a hearing to present and expand their arguments.\n\n**IV.- POSITION OF THE LOCAL GOVERNMENT.** The municipal authorities estimate that what was done responds to the powers conferred on local governments by reason of their political, administrative, and financial autonomy, as provided in articles 4 subsection d) and 13 subsection b) of the Código Municipal, with which the municipal body obtains the competence to approve fees and prices it charges for municipal services. It is also based on ruling No. 5445-99 of the Sala Constitucional, which established that the setting of fees corresponds to Local Governments, since Transitory Provision VIII of the Código de Normas y Procedimientos Tributarios, which provided that the setting of public prices corresponded to the Contraloría General de la República, was rendered without effect in resolution R-CO-70-2006 at 9:00 a.m. on September 4, 2006, of the Contraloría, upon considering that it was not within its competence. It states that with the decreed increase it can face the investment projects that the service requires, whose procedure does not require holding any hearing for the interested parties. It adds that these new rates contribute to the rational and responsible consumption of users, with bills being higher when consumption increases, in a canton where human development indices are high, not thereby generating any detriment to the canton's merchants.\n\n**V.- CONTENT OF THE AGREEMENT ADOPTED BY THE CONCEJO MUNICIPAL OF TARRAZÚ IN ORDINARY SESSION NO. 204-2010.** From an integral reading of agreement 1, definitively approved by the Concejo Municipal of Tarrazú in ordinary session no. 204-2010, article II, which gave rise to the extraordinary appeal for review, this Tribunal appreciates that in the present case, the study called \"Recalificación de Tarifas Acueducto, Municipalidad de Tarrazú\", prepared by Mr. Jesús Solís Sánchez, carried out a meticulous analysis of the financial situation that had been occurring in the Tarrazú aqueduct, which included all the rates and types of service users and, based on the administrative cost structure, proposed a new scheme that would allow, additionally, making certain investments that are essential for its development and continuity. Upon knowing said analysis, in agreement No. 1, article II, of ordinary session No. 204-2010 held on April 20, 2010, the Concejo Municipal ordered its approval, including the new proposed rates. The interpretation made by the appellant party, in the sense that these rates were not approved in this agreement, is not shared by this Tribunal, especially upon verifying that the transcription of the agreement details the new rate scheme. Even more, said study is emphatic in giving the technical and legal reasons for its implementation, since it is based on the very norms of the Código Municipal that authorize the annual review of public service prices, as well as on the need to obtain additional resources in order to make some investments, starting from the basis of their operating cost, where the aqueduct's expenses, the nature, and proportion of users are detailed, based on the rates in force.\n\n**VI.- ON MUNICIPAL AUTONOMY.** The Local Government estimates that what was done is a consequence of the autonomy legally and constitutionally conferred on municipalities, which can, through the Concejo Municipal, set the fees and public prices of the services they provide (article 74 of the Código Municipal), thus including that of aqueducts. While it is true that this municipal autonomy derives from article 170 of the Constitution, which materializes, par excellence, in the taxing or tributary power to procure the necessary income to meet its obligations, with the initiative for the creation, modification, or extinction of local municipal taxes resting in the municipal corporations, it is also true that the setting of taxes requires, in any case, the approval of the Asamblea Legislativa. On this particular, since ruling No. 1999-5445 at 2:30 p.m. on July 14, 1999 - the same one cited by the municipal corporation of Tarrazú - it was indicated that the autonomy of municipalities is limited to what is strictly local and, therefore, is relative, not full, exclusive, nor unlimited, remaining subject to certain limits derived from its immersion within the structure of the Costa Rican State. It is thus that municipalities have the obligation to coordinate certain functions with other institutions, in which a kind of \"inter-institutional coordination\" arises, according to constitutional and legal mandate, which can transcend to the macro-level of national planning, always within the framework of the law, without this meaning subjection to the administrative tutelage of the Executive Branch or submission to any type of direction. To this is also due the fact that local governments are subject to the fiscal, financial, accounting, and budgetary controls exercised by the Contraloría General de la República (article 183 of the Constitution), in safeguarding the Public Treasury, a function that even encompasses the verification of the fulfillment of objectives and goals in response to criteria of efficiency and profitability, as their parameters form part of the legality framework.\n\n**VII.- ON THE APPLICABLE PROCEDURE FOR SETTING RATES FOR THE COLLECTION OF SERVICES DERIVED FROM MUNICIPAL AQUEDUCTS.** The municipal legal system from long ago established a special system for setting rates for the collection of public services provided by local governments, without recognizing the full autonomy that supports the thesis put forward by the local corporation of Tarrazú. For such purposes, a historical glance at the development of this matter is undertaken next. Since the previous Código Municipal - Ley 4574 of May 4, 1970 - repealed with the entry into force of the current Code - Ley No. 7794 published on May 18, 1998 -, a fee-setting mechanism was foreseen that required the participation of some body in charge of their approval and modification. It must be clarified that, at that time, there was no differentiation between the concepts of fee (tasa), rate (tarifa), and public price (precio público), terms that have been developed and differentiated by the most recent tax doctrine over the last twenty years. Said normative body provided:\n\n\"*Artículo 85.-* Municipal taxes, contributions, and fees shall enter into force once they have been approved in accordance with the law and published in the Diario Oficial.\n\n*The body in charge of approving municipal fees* may modify them when resolving on their approval.\" (highlighting added)\n\nAs can be seen, the existence of a \"body in charge of approving municipal fees\" was necessary, a competence that was defined in the Código de Normas y Procedimientos Tributarios - Ley No. 4755 of May 3, 1971 -, by providing:\n\n\"Artículo 5. Matter exclusive to the law.-\n\n...\n\nIn relation to fees, when the law does not prohibit it, the Regulation of the same may vary their amount so that they better fulfill their purpose, *prior intervention of the body that by law is in charge of regulating the rates of public services.*\" (highlighting added)\n\nTransitory Provision VIII of the same Code provided that, as long as that regulatory body had not been created, the modification of said rates would be approved by the Contraloría General de la República. In this regard, said article indicated:\n\n\"Transitorio VIII.- As long as the specific body that will be in charge of setting the rates for public services has not been established by law, the modification thereof, pursuant to the power foreseen in the last paragraph of article 5, shall require the prior approval of the Contraloría General de la República.\" (currently repealed with Ley 8823 of May 5, 2010, article 51, published in the Diario Oficial La Gaceta of June 1, 2010)\n\n&nbsp;\n\n**Regarding rates for municipal aqueduct services,** **article 19 of the Ley de Reformas al Código Municipal y Otras Leyes - Ley 6890 of September 14, 1983 -**, a norm in force since September 23, 1983, added **article 3 of the Ley Constitutiva del Instituto Costarricense de Acueductos y Alcantarillados - Ley 2726 of April 14, 1961 -**, and **expressly provided the mechanism for their setting,** and indicated that:\n\n\"ARTICULO 3º.- It is the responsibility of the Instituto Costarricense de Acueductos y Alcantarillados to prepare the fees and rates for the public services referred to in this law, provided in the country by public or private companies.\n\n...\n\n*Regarding municipal aqueducts, the fees and rates for water service shall be agreed upon by the Concejo, after a legal and economic study to be carried out by the Instituto de Fomento y Asesoría Municipal, in consultation with the Instituto Costarricense de Acueductos y Alcantarillados, and shall send them for publication as a project, referring them for approval to the Servicio Nacional de Electricidad, which shall have a period of thirty business days to approve them or justify their rejection.*\n\n*Otherwise, once this period has expired, the municipality shall put them into effect starting from the month following the publication of the corresponding notice in the Diario Oficial.*\n\n(The highlighting is added)\n\nAs a consequence of the application of this law, in September 1983, the body responsible for approving the tariffs of local aqueducts was defined, the specification of which was made by Transitory Provision VIII of the Tax Rules and Procedures Code, leaving that provision without application. This competence fell to the National Electricity Service (SNE), through which the interventionist scheme of the Costa Rican State was reinforced, which was beginning to promote, with this type of rules, the regulation of public services. The SNE was subsequently transformed into the Regulatory Authority for Public Services, through Law No. 7593 of August 9, 1996, article 1. Article 5 of this regulation expanded its sphere of competencies and provided that the tariffs for the public services of aqueduct and sewerage, including drinking water, collection, treatment, and evacuation of black water, residual water, and stormwater, would henceforth be set by said autonomous institution, without making any differentiation as to which entity was in charge of providing them. In this regard, on the topic of interest, the regulation stated:\n\n\"Article 5.- Functions\n\nIn the public services defined in this article, the Regulatory Authority shall set prices and tariffs; in addition, it shall ensure compliance with the standards of quality, quantity, reliability, continuity, timeliness, and optimal provision, pursuant to article 25 of this law. The aforementioned public services are:\n\n....\n\nc) Supply of the aqueduct and sewerage service, including drinking water, collection, treatment, and evacuation of black water, residual water, and stormwater.\"\n\nThe text of subsection c) transcribed above was amended by Article 5 of Law No. 8641 of June 11, 2008, resulting in the current version, as follows:\n\n\"c) Supply of the aqueduct and sewerage service, including drinking water, the collection, treatment, and evacuation of black water, residual water, and stormwater, as well as the installation, operation, and maintenance of the hydrant service.\"\n\nThese rules coexist and are in force alongside the current Municipal Code - Law 7794 published in La Gaceta No. 94 of May 18, 1998 - which grants the Municipal Council the competence to approve the rates and prices it charges for municipal services, by expressly providing that:\n\n\"Article 13.- The powers of the Council are:\n\n...\n\nb) Agree on the budgets and approve the contributions, rates, and prices it charges for municipal services, as well as propose municipal tax projects to the Legislative Assembly.\"\n\nFrom the transcription of such laws and, in light of the criteria of autonomy and administrative oversight, there is no doubt that regarding the designation of tariff schemes for charging for aqueduct services, there is special legislation of priority application that prevails, so that local corporations maintain that relative autonomy for setting such prices, requiring, in accordance with the legal system, to coordinate efforts with the Institute for Municipal Development and Advisory Services (Instituto de Fomento y Asesoría Municipal) and the approval of the Regulatory Authority for Public Services. This must be integrated with Article 3 of the Constitutive Law of the Costa Rican Institute of Aqueducts and Sewerage, as it maintains the competence of the Municipal Council to agree on the rates and tariffs for the water service concept, \"following a prior legal and economic study to be conducted by the Institute for Municipal Development and Advisory Services, in consultation with the Costa Rican Institute of Aqueducts and Sewerage,\" which must finally be approved by ARESEP, within a period of thirty business days. Precisely, the Constitutional Chamber came to uphold a thesis in this sense, in ruling 1999-5445 as cited, for when referring to Transitory Provision VIII of the Tax Rules and Procedures Code, it indicated:\n\n\"It must be noted that this provision, in the Chamber's opinion, was partially repealed by virtue of the Law of the Regulatory Authority for Public Services, number 7593, of March twenty-eighth, nineteen ninety-six, by which the Regulatory Authority for Public Services was created, which is responsible for setting the prices and tariffs of the public services defined in Article 5 of its law, so that with regard to local services, it only has competence to set tariffs for the collection and treatment of solid and industrial waste. That is, until the validity of the new Municipal Code, this Transitory Provision had full application to the municipalities, with respect to setting municipal rates, and as of Law 7593, it continues in force for matters not expressly transferred to the Regulatory Authority.\n\n...\n\nThis Tribunal considers that leaving the determination of the amounts that residents must pay as rates solely to the discretion of municipal authorities, without any prior control, is not only risky due to the abuses that could be committed, but also contrary to the constitutional principles of protection for the vast majorities. Therefore, it is necessary to establish a control, either a priori or a posteriori, under the responsibility of the Comptroller General of the Republic, a control that, it is reiterated, is strictly one of legality, in order to verify that the proposed cost of the service is correct, so as to prevent municipalities from charging more than what is justly due. In this sense, it should be noted that the only constitutionally possible participation by the Comptroller in setting municipal rates is that legality control, through which it could object to a rate that is disproportionate to the cost of the service intended to be charged, and obviously, it would be legitimized to point out the limit for modifying the rate so that it bears a relationship with the effective cost of the service, when resolving on its approval; for which reasons, Article 85 of the Municipal Code is not unconstitutional, nor is Transitory Provision VIII of the Tax Rules and Procedures Code.\n\nArticle 74 of the current Municipal Code eliminated the intervention of the Comptroller for the setting of municipal rates, but the application of Transitory Provision VIII of the Tax Rules and Procedures Code subsists, in the Chamber's opinion, until the setting of rates and prices is transferred in its entirety to the Regulatory Authority for Public Services.\"\n\nSubsequently, in a clarification and addition to the previous ruling, the Constitutional Court upheld a thesis in a similar sense, in Resolution No. 2000-07728 of fourteen hours and forty-five minutes on August thirtieth, two thousand, reinforcing the issue of controls in tariff setting, by stating that:\n\n\"The setting of these tariffs corresponds to the local governments themselves - in consideration of their recognized tax autonomy -, in coordination with the respective State institutions. However, this does not mean they are exempt from control; precisely because it is left to the discretion of municipal authorities, the risk of abuse to the detriment of users increases, which is why a controlling body is required to make effective the constitutional principle of protecting the vast majorities. This body is the Comptroller General of the Republic, as the Law of the Regulatory Authority for Public Services partially modified Transitory Provision VIII of the Tax Rules and Procedures Code, such that with respect to municipal services, that entity is responsible for setting the prices and tariffs for the collection and treatment of solid and industrial waste, only, as established by Article 5 of Law 7593. Consequently, the control of the prices and tariffs of other services provided directly by municipalities corresponds at this time exclusively to the Comptroller General of the Republic, unless otherwise expressly provided by a special law to that effect.\"\n\nIn another Decision, when granting an amparo appeal, the same Constitutional Chamber revisited the issue of ARESEP's participation in setting tariffs for municipal aqueduct services, and ordered:\n\n\"Regarding the tariff increase for the drinking water service: In accordance with the provisions of Law 7593 (issued in development of constitutional numerals 50, 74, and 140 subsections 8 and 20), the Regulatory Authority for Public Services is the competent body to authorize tariff increases for public services, and prior to executing a tariff increase, the Municipality of Montes de Oro must request the respective authorization from ARESEP. In this sense, see ruling 5445-99 of 14:30 hours on July 14, 1999, which as relevant indicates:\n\n...\n\nGiven that in official document 03749 of May tenth, two thousand, signed by the Director of User Services of the Regulatory Authority for Public Services, it is recorded that ARESEP has not approved increasing the tariffs for the drinking water service administered by the Municipality of Montes de Oro (folio 157); that the residents of the IMAS Project complain about tariff increases in the water service not proportional to its quality (folios 4, 74, 75, 76); that the President of the Municipal Council admits that the tariff increases are based exclusively on a prior study prepared by IFAM (see folio 171, section 7; and copies of La Gaceta No. 81 of April 27 of the current year and No. 152 of the following August 9, visible on folios 214 and 217); that the tariff increase in question has not been submitted for ARESEP's approval, the Municipality of Montes de Oro has incurred a violation of the provisions of Articles 11, 50, 74, and 169 of the Constitution, insofar as they require Municipal Governments to administer local interests and services within the limits imposed by the principle of legality (the procedures used to achieve the ends may not exceed the current legal system). Therefore, if the Municipality of Montes de Oro considers that the tariff study visible on folio 224 and subsequent ones is in accordance with the circumstances of the Canton and constitutes a suitable instrument to enable the maintenance process of the Miramar Aqueduct and the effective improvement of the drinking water supply service to the community, it must communicate it as such to the Regulatory Authority for Public Services (in the terms contained in Law 7593), and it may not execute the collection corresponding to any tariff increase of this type of service as long as it does not have the prior approval of ARESEP.\" (The bolding is added. See ruling No. 2000-09972, of fourteen hours and thirty-one minutes on November eighth, two thousand.)\n\nVIII.- Within the list of grievances expressed by the appellant, the fact is claimed that the new tariffs were not definitively approved by the Comptroller General of the Republic. As stated supra, at present such competence does not belong to that institution, but as has been set forth, this function is indeed the responsibility of the Regulatory Authority for Public Services, for there is an express rule that designates its competence, which is non-delegable, non-waivable, and non-transferable (Article 66 of the General Law on Public Administration), without this signifying a violation of the principle of municipal autonomy, which cannot be understood absolutely, but rather within the environment of the Costa Rican State, understood integrally within its national-level organizational macrostructure. Without a doubt, the nullity defects of the appealed agreement exist, insofar as the legal procedure provided for such purposes, explained in previous lines, has been violated, since the Municipal Council, through the appealed agreement, proceeded independently to set the new tariffs, without requesting the definitive approval of the body responsible for that purpose. Furthermore, said tariffs were agreed upon without having been previously made known to the interested parties through the publication of the draft mandated by Article 3 of the Constitutive Law of the Costa Rican Institute of Aqueducts and Sewerage - transcribed supra -, so that they could express their views, thereby revealing another irremediable defect that gives merit, in light of Article 182.1 of the General Law on Public Administration, to uphold the grievances expressed in this regard and order the nullity of all proceedings, with the strict procedures needing to be repeated, in accordance with the Law.\n\nIX.- CRITERIA FOR THE DESIGNATION OF THE NEW PRICE OF THE SERVICE. Every public service is based on the principle of service at cost, which is understood as the duty to include within the price \"only the costs necessary to provide the service, which allow for competitive remuneration and guarantee the adequate development of the activity\" (Article 3 subsection c) of the ARESEP Law - Law No. 7593 of August 9, 1996). This implies that the tariff set must contemplate a percentage that includes the possibility of allowing its growth and development. It is not true, as the appellant understands, that future investments cannot be provided for within the set price; rather, on the contrary, every responsible service must anticipate its maintenance and growth, which must necessarily be financed by its users.\n\nThere are legal criteria for the definition of these rates, in the Constitutive Law of the Costa Rican Institute of Aqueducts and Sewers -Ley 2726-, amended by article 1 of Ley Nº 5915 of July 12, 1976, when providing:\n\n\"ARTICLE 4.- For the setting of rates, criteria of distributive social justice shall be applied, which take into account the social strata and the zone to which the users belong, so that those with greater ability to pay subsidize those with less ability, with the purpose of obtaining income that responds to the financial policy that the corresponding legal norms establish for the Institute.\n\nThe State and its social assistance institutions may subsidize, totally or partially, areas or groups of users who, due to their economic conditions, are unable to pay the established rates.\"\n\nEven the Municipal Code allows, in article 74, that the rates and prices of the services it provides include this additional item, by stating that:\n\n\"Article 74.- For the services it provides, the municipality shall charge rates and prices, which shall be set taking into consideration the effective cost plus a ten percent (10%) utility for developing them. Once set, they shall come into effect thirty days after their publication...\"\n\nThe new aqueduct price structure implemented in Tarrazú provided for a return for service development equivalent to 6.4% for 2010, 11.7% for 2011, 11.6 for 2012, 12.0 for 2013 and 12.3 for 2014; same that exceeded the legal authorization provided, with the exception of the year 2010. A charge in excess of this type can cause a surcharge to fall upon the user of the service that is outside of any legal authorization, making the service more expensive above the permitted legal margins, transferring it unjustifiably to the user. In the opinion of this Chamber, although it has not been demonstrated that the new rates are ruinous in the terms set forth in the appeal, these must be assumed on the basis of a reasonable price and in compliance with the law. Without a doubt, this is a factor that, at first glance, must also be reviewed by the local authorities.\n\nX.- It must also be added that agreement No. 8 of the Municipal Council of Tarrazú, taken in ordinary session No. 033-2010, held on December 15, 2010, which rejected the extraordinary motion for review, is also null insofar as the procedure that guaranteed the interested parties their proper appearance, right of defense, and guarantee of due process was not respected. In any case, for the reasons stated, agreement No. 1 definitively approved in ordinary session No. 204-2010, held on April 20, 2010, which definitively approved the new rate scheme, is null. By connection and consequence, the absolute nullity ensues of the agreement taken in the extraordinary session held on July 29, 2010, sole article, in which the modification of water rates on credit was also agreed, presented by Mr. Jesús Solís Sánchez, because it suffers from the same procedural defects. The file must be returned to the Municipal Council of Tarrazú, so that the council body may resume its analysis and adjust to the law, in such a way that it defines rate schemes on the basis of a fair and proportionate setting within legal limits and rectifies the procedures.\n\nPOR TANTO:\n\nThe challenged agreement is annulled and, by connection and consequence, the agreement taken by the Municipal Council of Tarrazú, in the extraordinary session held on July 29, 2010, sole article. It is ordered to return the file to the Municipality of origin, so that it may reinstate the procedure in accordance with the law.\n\nNombre66641\n\nEvelyn Solano Ulloa Nombre80986\n\nExp: 11-000584-1027-ca\nMunicipal\nPartido Tarrazú Primero v/ Municipalidad de Tarrazú"
}