1. When the Metropolitan Council determines that a city's comprehensive land use plan may have a substantial impact on or contain a substantial departure from the Metropolitan Council's regional system plans, the Council has the statutory authority to require the city to conform to the Council's system plans.
2. The Metropolitan Council's final decision, as reflected in Resolution 2003-10, that the City of Lake Elmo's comprehensive land use plan may have a substantial impact on and substantially depart from the Council's regional system plans is supported by a preponderance of the evidence.
3. The Metropolitan Council's requirement that the City of Lake Elmo accommodate the number of sewered households prescribed in its regional system plans does not exceed the Council's statutory authority nor does it require the city to construct a new sewer system as that term is defined in Minn. Stat. § 115.01, subd. 18.
Heard, considered, and decided by the court en banc.
The opinion of the court was delivered by: Blatz, Chief Justice.
This appeal arises out of the City of Lake Elmo's challenge to the Metropolitan Council's ("Council") final decision, Resolution 2003-10, which requires Lake Elmo to conform its comprehensive land use plan ("comprehensive plan") to the Council's regional system plans ("system plans"). See Metropolitan Council Res. 2003-10 (April 7, 2003) (hereinafter "Resolution 2003-10"). The City of Lake Elmo argues that the Council does not have the statutory authority to adopt Resolution 2003-10 and, therefore, the resolution is not binding upon it. The court of appeals affirmed the Council's decision, holding that Lake Elmo's comprehensive plan may have both a substantial impact on and contain a substantial departure from the Council's system plans. City of Lake Elmo v. Metro. Council, 674 N.W.2d 191, 198 (Minn. App. 2003). Applying the relevant statutory provisions, the court also concluded that the Council had the statutory authority to compel the City of Lake Elmo to modify its comprehensive plan. Id. We affirm.
In February 2002, the City of Lake Elmo, appellant, submitted its completed comprehensive plan to the Council, respondent, for review as required by Minn. Stat. § 473.858, subd. 1 (2002). Lake Elmo's comprehensive plan proposed to restrict future development and maintain the rural character of the city. On September 11, 2002, the Council adopted Metropolitan Resolution 2002-30 (hereinafter Resolution 2002-30), the initial resolution in this matter. The Council found that Lake Elmo's comprehensive plan "may have a substantial impact on or contain a substantial departure from" the Council's system plans. See Minn. Stat. § 473.175, subd. 1 (2002). The resolution required Lake Elmo to make nine modifications to its comprehensive plan that would allow for continued population growth through the year 2040. Lake Elmo contested the resolution and requested a hearing before an administrative law judge ("ALJ") pursuant to Minn. Stat. § 473.866 (2002).*fn1
The ALJ addressed two issues: (1) whether Lake Elmo's comprehensive plan may have a substantial impact on or contain a substantial departure from the metropolitan system plans; and (2) whether the Council possessed the statutory authority to require modification of Lake Elmo's comprehensive plan in the manner prescribed by Resolution 2002-30. On March 13, 2003, the ALJ issued its report, findings of fact, and conclusions of law, determining that the Council met its burden of proof and showed by a preponderance of the evidence that Lake Elmo's comprehensive plan may have both a substantial impact on and contain a substantial departure from metropolitan system plans. The ALJ also concluded that the Council possessed the statutory authority to modify Lake Elmo's comprehensive plan. Following the ALJ's decision, the Council passed Resolution 2003-10, the Council's final decision. In that resolution, the Council adopted the ALJ's recommended decision in its entirety and decided that Lake Elmo must modify its comprehensive plan as prescribed in its first resolution, Resolution 2002-30. Lake Elmo then sought review of the Council's final decision from the court of appeals, which upheld the Council's decision in all material respects. City of Lake Elmo v. Metro. Council, 674 N.W.2d 191. We granted Lake Elmo's petition for review on February 25, 2004.
Minnesota Statutes § 473.866 sets forth the scope of review applicable to contested Council decisions. By reference, it incorporates Minn. Stat. § 14.69 (2002), which states that a reviewing court may reverse or modify an agency's decision "if the substantial rights of the petitioners may have been prejudiced" because the administrative decision was, among other things, in excess of statutory authority, unsupported by substantial evidence, or arbitrary or capricious. Important to our review here, section 473.866 goes on to modify this traditional scope of review in two ways:
The scope of review shall be that of section 14.69, provided that: (1) the court shall not give preference to either the administrative law judge's record and report or the findings, conclusions and final decision of the council, and (2) the decision of the court shall be based upon a preponderance of the evidence * * *.
First, the statute gives no preference to the fact-finder and, second, it adopts a preponderance of the evidence standard, rather than an "unsupported by substantial evidence" standard.*fn2 The preponderance of the evidence standard requires that to establish a fact, it must be more probable that the fact exists than that the contrary exists. Netzer v. N. Pac. Ry. Co., 238 Minn. 416, 425, 57 N.W.2d 247, 253 (1953). If evidence of a fact or issue is equally balanced, then that fact or issue has not been established by a preponderance of the evidence. Id. The preponderance of the evidence standard is a higher standard than the substantial evidence standard set forth in section 14.69, which is the typical evidentiary standard applied by appellate courts when reviewing agency decisions.*fn3 Therefore, in following the statutory dictates of section 473.866, we will give no "preference" to either the ALJ's report or the Council's decision. Additionally, when determining whether ...