Case Title: STATE v CITY OF HELENA

Citation: 

Docket Number: 80-306

State: montana

Court: Montana Supreme Court

Date: 1981-08-11T00:00:00Z

Document:
No. 80-306 IN THE SUPREME COURT OF THE STATE OF MONTANA 1981 THE STATE OF MONTANA, acting by and through the Department of Highways of the State, Plaintiff and Respondent, VS . THE CITY OF HELENA, Defendant and Appellant. Appeal from: District Court of the First Judicial District, In and for the County of Lewis and Clark. Honorable Gordon Bennett, Judge presiding. Counsel of Record: For Appellant: Hull and Sherlock, Helena, Montana Jeffrey M. Sherlock argued, Helena, Montana For Respondent: Beate Galda argued, Helena, Montana Submitted: June 17, 1981 Decided: August 11, 1981 Filed : AUG 11 1981 M r . Chief J u s t i c e Frank I. H a s w e l l delivered the Opinion of t h e Court . ~ e f e n d a n t c i t y of Helena appeals from a d e c l a r a t o r y judg- ment entered June 19, 1980, i n t h e D i s t r i c t Court of the F i r s t ~ u d i c i a l D i s t r i c t . The judgment ordered t h e C i t y t o pay 25 percent of c o s t s incurred i n the r e l o c a t i o n of c e r t a i n u t i l i t y f a c i l i t i e s owned by t h e City. On August 9, 1974, Helena's Broadway Avenue between Montana and Warren S t r e e t s was approved t o become p a r t of t h e Federal Aid Urban System. With such designation, j u r i s d i c t i o n over Broadway Avenue w a s t r a n s f e r r e d from t h e C i t y t o t h e Montana Highway Department. Construction of t h e p r o j e c t was completed on May 15, 1979. A necessary p a r t of t h e p r o j e c t was t h e r e l o c a t i o n of cer- t a i n f a c i l i t i e s owned by t h e City and used i n i t s water, sewer and l i g h t systems. On May 16, 1977, t h e C i t y and t h e Montana Highway Department entered i n t o an agreement concerning t h e r e l o c a t i o n of those f a c i l i t i e s . The p a r t i e s agreed t h a t t h e re- l o c a t i o n of t h e f a c i l i t i e s was necessary and i n t h e p u b l i c in- t e r e s t , and t h e C i t y granted t h e S t a t e t h e a u t h o r i t y t o a d j u s t , replace, r e p a i r and r e l o c a t e the f a c i l i t i e s . I n t h e document both p a r t i e s i n d i c a t e d they could not agree on t h e proper a l l o - c a t i o n of r e l o c a t i o n c o s t s ; however, they d i d not wish t h e d i s - pute t o i n t e r f e r e with t h e construction p r o j e c t . Therefore, t h e p a r t i e s agreed t o allow the Montana Highway Department t o proceed with t h e p r o j e c t and t o l i t i g a t e t h e c o s t d i s p u t e . The c o s t of r e l o c a t i o n r e l e v a n t t o t h i s a c t i o n amounted t o $14,572.80 On June 19, 1980, t h e D i s t r i c t Court issued i t s order r e q u i r i n g t h e C i t y of Helena t o pay 25 percent of t h e r e l o c a t i o n c o s t s , equivalent t o $3,643.20. The following i s s u e s are r a i s e d by t h e City of Helena on appeal : 1. whether t h e C i t y of Helena i s required by s e c t i o n 60-4-403, MCA, t o pay 25 percent of t h e u t i l i t y r e l o c a t i o n c o s t s incurred a s a r e s u l t of t h e Broadway Avenue p r o j e c t ; 2. whether t h e necessary r e l o c a t i o n of municipally-owned u t i l i t y systems i s a taking of p r i v a t e property r e q u i r i n g j u s t compensation; I 3. whether t h e d o c t r i n e of l o c a l self-government prevents t h e a p p l i c a t i o n of s e c t i o n 60-4-403, MCA, t o Montana's c i t i e s ; and 4. whether r e q u i r i n g municipally-owned u t i l i t y systems t o pay 25 percent of r e l o c a t i o n c o s t s imposes an unlawful tax o r d e b t upon municipal r e s i d e n t s . The C i t y contends t h a t s e c t i o n 60-4-403, MCA, i s i n a p p o s i t e and t h a t t h e City i s e n t i t l e d t o be paid j u s t compensation be- cause t h e S t a t e has exercised its eminent domain power. The C i t y would have t h e S t a t e pay a s j u s t compensation t h e e n t i r e r e l o c a t i o n c o s t . The S t a t e i s w i l l i n g t o be responsible f o r 75 percent of t h e c o s t a s provided f o r i n t h e s t a t u t e . The D i s t r i c t Court concluded t h a t t h e C i t y of Helena was required by s e c t i o n 60-4-403, MCA, t o pay 25 percent of t h e c o s t s incurred i n t h e r e l o c a t i o n of t h e u t i l i t y f a c i l i t i e s on Broadway Avenue. Sections 60-4-401 e t seq., MCA, provide f o r t h e r e l o c a t i o n of u t i l i t y f a c i l i t i e s on any of t h e Federal Aid Urban System p r o j e c t s . The s t a t u t e provides t h a t 75 percent of a l l c o s t s of r e l o c a t i o n a r e t o be paid by t h e S t a t e Highway Department. The s t a t u t e expressly a p p l i e s t o both p u b l i c l y and p r i v a t e l y owned u t i l i t i e s . A c i t y a c t i n g i n i t s p r o p r i e t a r y capacity a s an operator of water, sewer and l i g h t i n g f a c i l i t i e s i s a p u b l i c u t i l i t y . Section 69-3-101, MCA; Leischner v. Knight (1959), 135 Mont. 109, 337 P.2d 359. The C i t y contends t h a t the r e l o c a t i o n s t a t u t e , s e c t i o n s 60-4-401 e t seq., MCA, does not apply t o t h i s case because t h e C i t y had j u r i s d i c t i o n of t h e s t r e e t when t h e u t i l i t i e s w e r e o r i - g i n a l l y i n s t a l l e d . The C i t y r e l i e s on Jones v. Burns (1960), 138 Mont. 268, 357 P.2d 22, and construes Jones t o hold t h a t s e c t i o n s 60-4-401 e t seq., MCA, c o n t r o l only when t h e u t i l i t i e s were i n i t i a l l y i n s t a l l e d pursuant t o s e c t i o n 69-4-101, MCA. Therefore, t h e C i t y argues t h a t s i n c e it d i d n o t need t h e S t a t e ' s permission t o l o c a t e i t s f a c i l i t i e s on Broadway, s e c t i o n 60-4-403, MCA, does n o t apply. However, Jones does not stand f o r t h e pro- p o s i t i o n t h a t the two s t a t u t e s a r e i n t e r r e l a t e d i n t h e manner sug- gested by t h e City. I n Jones, t h e predecessor t o s e c t i o n s 60-4- 4 0 1 e t seq., MCA, was attacked on numerous c o n s t i t u t i o n a l grounds. I t was argued t h a t t h e r e l o c a t i o n s t a t u t e would transform a bare permissive use of p u b l i c roads by u t i l i t y companies i n t o a vested property r i g h t . Section 69-4-101, MCA, was c i t e d t o i l l u s t r a t e t h a t t h e telephone and telegraph companies involved i n t h e liti- g a t i o n d i d n o t have a vested property r i g h t , b u t r a t h e r a m e r e permission from t h e s t a t e t o l o c a t e f a c i l i t i e s on t h e p u b l i c ways. This Court found t h a t t h e r e l o c a t i o n s t a t u t e d i d not g i v e t h e u t i l i t y companies a vested property r i g h t t o place f a c i l i t i e s i n the public way, b u t r a t h e r the s t a t u t e merely recognized an e q u i t a b l e r i g h t i n t h e u t i l i t y companies t o be protected a g a i n s t any l o s s they might s u f f e r a s a r e s u l t of t h e s t a t e ' s e x e r c i s e of i t s p o l i c e power. The s t a t e has ownership and c o n t r o l of a l l c i t y streets i n Montana, and i f t h e s t a t e chooses t o d e l e g a t e a u t h o r i t y t o t h e c i t y t o c o n t r o l i t s s t r e e t s , t h e c i t y becomes a t r u s t e e thereof. P a l f f y v. Director of Finance of C i t y of Bozeman (1975), 168 Mont. 108, 540 P. 2d 955; S t a t e v. S t a t e Water Conservation ~ o a r d (1958), 134 Mont. 403, 332 P.2d 913; City of ~ i l l i n g s v. ~ e r o l d (1956), 130 Mont. 138, 296 P.2d 263; Bidlingmeyer v. c i t y of Deer Lodge (1954), 128 Mont. 292, 274 P.2d 821. The s t a t e may a l s o revoke the j u r i s d i c t i o n given t o t h e c i t y t o c o n t r o l and maintain t h e c i t y s t r e e t s . Bidlingmeyer, supra. The C i t y of Helena, exercising t h e j u r i s d i c t i o n delegated t o it by t h e S t a t e , granted i t s e l f a f r a n c h i s e t o use t h e s t r e e t s f o r l o c a t i o n of u t i l i t i e s c o n t r o l l e d by t h e C i t y i n i t s p r o p r i e t a r y capacity. When operating i n a p r o p r i e t a r y capacity, a c i t y i s s u b j e c t t o the same burdens, r e s p o n s i b i l i t i e s and l i a b i l i t i e s a s a p r i v a t e business and i s e n t i t l e d t o t h e same r i g h t s , p r i v i l e g e s and i m - munities. S t a t e v. Holmes (1935), 1 0 0 Mont. 256, 47 P.2d 624. When t h e j u r i s d i c t i o n of Broadway Avenue w a s t r a n s f e r r e d from t h e C i t y of Helena t o t h e Montana Highway Department, t h e nature of t h e C i t y ' s r i g h t s a s a public u t i l i t y d i d not change. Under common law, any f r a n c h i s e granted t o a p u b l i c o r p r i v a t e u t i l i t y t o use c i t y s t r e e t s i s s u b j e c t t o an implied o b l i g a t i o n t o r e l o - c a t e i t s f a c i l i t i e s t h e r e i n a t i t s own expense when necessary t o make way f o r a proper governmental use of t h e s t r e e t s . Jones v. Burns (1960), 138 Mont. 268, 357 P.2d 22; Connecticut Ry. & L. Co. v. New B r i t a i n Redev. Comm'n (1971), 161 Conn. 234, 287 A.2d 362; McQuillin, Municipal Corporations, § § 34.72, 34.74(a), (1970 e d . ) . The f a c t t h a t t h e governing body which r e q u i r e s t h e r e l o c a t i o n was n o t t h e grantor of t h e f r a n c h i s e does n o t a f f e c t t h e power t o r e q u i r e r e l o c a t i o n , nor does it a f f e c t t h e a p p l i - c a b i l i t y of s e c t i o n s 60-4-401 e t seq., MCA. I t i s t h e p o s i t i o n of t h e City of Helena t h a t t h e u t i l i t y f a c i l i t i e s were t h e p r i v a t e property of t h e City and t h a t j u s t compensation must be paid under Mont. Const., A r t . 11, Sec. 29, f o r t h e "taking" of t h e f a c i l i t i e s . The D i s t r i c t Court found t h a t when t h e S t a t e r e q u e s t s the u t i l i t y t o move i t s f a c i l i t i e s , t h e r e i s no "taking" i n t h e c o n s t i t u t i o n a l sense. There was no e r r o r i n t h i s conclusion. While it i s t r u e t h a t p r i v a t e property of a municipality cannot be taken without j u s t compensation, C i t y of Three Forks v. S t a t e Highway Commission (1971), 156 Mont. 392, 480 P.2d 826; and t h a t t h e u t i l i t y f a c i l i t i e s a r e t h e p r i v a t e property of t h e municipality a c t i n g i n i t s p r o p r i e t a r y capacity, a p p e l l a n t ' s conclusion t h a t forced r e l o c a t i o n of t h e u t i l i t i e s r e q u i r e s j u s t compensation does not follow. I f t h e state a c t i o n i s a proper e x e r c i s e of t h e ,pol-ice power and i s d i r e c t l y connected with m a t t e r s of p u b l i c h e a l t h , s a f e t y and welfare, a reasonable burden may be imposed upon p r i v a t e property without compensation. Yellowstone Valley E l e c t r i c Cooperative, Inc. v. Ostermiller (1980), - Mont. I - P. 2d , 37 St.Rep. 536. O n t h e o t h e r hand, i f t h e s t a t e - a c t i o n i s an e x e r c i s e of t h e eminent domain power whereby p r i v a t e property i s taken f o r a p u b l i c use, j u s t compensation i s required. See e.g. McTaggert v. Montana Power Co. (1979), Mont. P. 2d - - I - , 36 St.Rep. 2079. The l i n e of demarca- - t i o n is n o t always c l e a r l y v i s i b l e . I n McTaggert, t h e owner of a g r i c u l t u r a l land p e t i t i o n e d f o r r e l o c a t i o n of a u t i l i t y l i n e pursuant t o s e c t i o n s 69-4-401 e t seq., MCA, a l l e g i n g t h a t he d e s i r e d t o i n s t a l l a new i r r i g a - t i o n system and t h a t t h e u t i l i t y l i n e which crossed h i s land i n t e r f e r e d with t h e planned system. The s t a t u t e s w e r e found t o c o n s t i t u t e a taking of p r i v a t e property f o r public use under t h e eminent domain power r a t h e r than an e x e r c i s e of t h e pol-ice power. Public h e a l t h , s a f e t y and welfare were only i n d i r e c t l y concerned. The Yellowstone Valley case involved a challenge t o a s t a t u t e which required u t i l i t i e s a t t h e i r own expense t o r a i s e o r remove t h e i r transmission l i n e s t o allow f o r t h e passage of oversized equipment and s t r u c t u r e s being moved on t h e p u b l i c highways. Section 69-4-603, MCA. For s e v e r a l reasons t h e s t a t u t e was found t o be a r e g u l a t i o n enacted w i t h i n t h e p o l i c e power of t h e s t a t e . P u b l i c s a f e t y was promoted by t h e s t a t u t e which was intended t o p r e v e n t e l e c t r i c a l a c c i d e n t s . Second, a p u b l i c b e n e f i t was conferred w i t h minimal i n t e r f e r e n c e w i t h t h e p r i v a t e r i g h t s of t h e u t i l i t i e s . And most s i g n i f i c a n t l y , t h e r e was no a p p r o p r i a t i o n of a p r o p e r t y r i g h t because: " I n l o c a t i n g t h e i r f a c i l i t i e s upon a p u b l i c right-of-way, u t i l i t i e s and c o o p e r a t i v e s a r e conferred a p r o p e r t y r i g h t which, by i t s very n a t u r e , i s s u b j e c t t o o t h e r competing f r a n c h i s e s and p r i v i l e g e s . The easement which i s obtained is n o t an a b s o l u t e p r o p e r t y r i g h t ; t h e r e i s no r i g h t conferred upon u t i l i t i e s t o have t h e i r f a c i l i t i e s occupy a p a r t i c u l a r l o c a t i o n . " Y e l - lowstone Valley Elec. Coop., Inc. v. O s t e r m i l l e r , supra, 37 St.Rep. 536, 540. The McTaggert s i t u a t i o n involved a g r e a t e r p r o p e r t y r i g h t , s i n c e t h e u t i l i t y had a n easement a c r o s s p r i v a t e land which was d i s t u r b e d by t h e a p p l i c a t i o n of t h e s t a t u t e . The C i t y of Helena d i d n o t have an a b s o l u t e r i g h t t o l o c a t e i t s u t i l i t y f a c i l i t i e s i n t h e street, b u t r a t h e r t h e r i g h t was s u b j e c t t o t h e S t a t e ' s e x e r c i s e of i t s p o l i c e power. Jones, supra. The b e n e f i t t o t h e p u b l i c a s a whole outweighed t h e temporary d e p r i v a t i o n and inconvenience s u f f e r e d by t h e C i t y . W e f i n d t h a t t h e D i s t r i c t Court c o r r e c t l y concluded t h a t when t h e S t a t e r e q u i r e d t h e C i t y t o r e l o c a t e i t s u t i l i t i e s , t h e r e was no t a k i n g i n t h e c o n s t i t u t i o n a l . sense, b u t r a t h e r a l e g i t i m a t e use of t h e p o l i c e power f o r which no compensation i s r e q u i r e d . F i n a l l y , t h e C i t y argues t h a t t h e d o c t r i n e of l o c a l s e l f - government p r e v e n t s a p p l i c a t i o n of s e c t i o n 60-4-403, MCA, t o Montana' s cities, and t h a t t h e s t a t u t e u n c o n s t i t u t i o n a l l y com- p e l s t h e C i t y t o i n c u r a d e b t o r impose t a x e s without i t s con- s e n t . W e f i n d no m e r i t i n t h e s e c o n t e n t i o n s . The l e g i s l a t u r e i n e n a c t i n g s e c t i o n s 60-4-401 e t seq., MCA, sought t o a l l e v i - a t e p a r t of t h e burden imposed upon u t i l i t i e s by t h e common law r u l e which r e q u i r e d u t i l i t i e s t o shoulder t h e e n t i r e expense of r e l o c a t i o n of f a c i l i t i e s . Jones, supra. The s t a t u t e s r e q u i r e t h e S t a t e t o assume 75 p e r c e n t of t h e c o s t of r e l o c a t i o n n e c e s s i t a t e d by f e d e r a l l y aided p r o j e c t s . Since t h e s t a t u t e a l l e v i a t e s most of t h e burden previously imposed upon u t i l i t i e s , t h e C i t y ' s argument t h a t t h e l e g i s l a t u r e has imposed a t a x o r compelled t h e i n c u r r e n c e of a d e b t must f a i l . Nor i s t h e r i g h t of home r u l e adversely a f f e c t e d by t h e s t a t u t e . I t i s d i f f i c u l t t o p e r c e i v e how a s t a t u t e a l l e v i a t i n g a f i n a n c i a l burden could c o n s t i t u t e a n impermissibl-e meddling i n t o p u r e l y l o c a l a f f a i r s . Affirmed. Chief J u s t i c e