### 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,Judgepresiding. 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: 

# AUG11

## 1981Mr. Chief JusticeFrank I. Haswell delivered the Opinion of the Court

# . ~efendant cityof Helena appeals from 

### a declaratory judgment entered June 19, 1980, inthe DistrictCourt of the First ~udicial District. The judgment ordered the City to pay 25 percent of costs incurred inthe relocation of certain utility facilitiesowned by the City. On August 9, 1974, Helena's Broadway Avenue between Montana and Warren Streetswas approved tobecome part of the Federal Aid Urban System. With such designation, jurisdiction over Broadway Avenue 

### was transferred from the City to the Montana Highway Department. Construction of the project was completed

on May 15, 1979. A necessary part of the project was the relocation of 

### certain facilitiesowned by the City and used in

### itswater, sewer and light systems. On May 16, 1977, the City and the Montana Highway Department entered into an agreement concerning the relocation of those facilities. The parties agreed that the 

### relocation of the facilitieswas necessary and inthe public interest, and the City granted the State the authority to adjust, replace, repair and relocate the facilities. In the document both parties indicated they could not agree on the proper allocation of relocation costs; however, they did not wish the dispute to interferewith the construction project. Therefore, the parties agreed to allow the Montana Highway Department to proceed with the project and to litigate the cost dispute. The cost of relocation relevant to this action amounted to $14,572.80 On June 19, 1980, the DistrictCourt issued 

### itsorder requiring the City of Helena topay 25 percent of the relocation costs, equivalent to $3,643.20. The following issues 

### are raised by the City of Helena on appeal:1. whether the City of Helena 

### is required by section 60-4-403, MCA, to pay 25 percent of the utilityrelocation costs incurred as a result of the Broadway Avenue project; 2. whether the necessary relocation of municipally-owned utility systems 

### isa taking of private property requiring just compensation;
I 3. whether the doctrine of local self-government prevents the application of section 60-4-403, MCA, toMontana's cities; and 

### 4. whether requiring municipally-owned utility systems to pay 25 percent of relocation costs imposes an unlawful tax or debt upon municipal residents. The City contends that section 60-4-403, MCA, 

### is inapposite and that the City 

### is entitled to be paid just compensation because the Statehas exercised 

### its eminent domain power. The City would have the Statepay asjust compensation the entire relocation cost. The State 

### iswilling tobe responsible for 75 percent of the cost asprovided for inthe statute. The District Court concluded that the City of Helena was required by section 60-4-403, MCA, to pay 25 percent of the costs incurred inthe relocation of the utilityfacilities on Broadway Avenue. Sections 60-4-401 etseq., MCA, provide for the relocation of utility facilitieson any of the Federal Aid Urban System projects. The statuteprovides that 75 percent of allcosts of relocation are tobe paid by the StateHighway Department. The statuteexpressly applies toboth publicly and privately owned utilities. A city acting in

### itsproprietary capacity as an operator of water, sewer and lighting facilities 

### is a public utility. Section 69-3-101, MCA; Leischner v. Knight (1959), 135Mont. 109, 337 P.2d 359.The City contends that the relocation statute, sections 60-4-401 

### et seq., MCA, does not apply to this case because the City had jurisdiction of the streetwhen the utilities

### were originally installed. The City relies on Jones v. Burns (1960), 138Mont. 268, 357 P.2d 22, and construes Jones to hold that sections 60-4-401 etseq., MCA, control only when the utilities

were initially installed pursuant to section 69-4-101, MCA. Therefore, the City argues that since 

### it did not need the State's permission to locate 

### its facilitieson Broadway, section 60-4-403, MCA, does not apply. However, Jones does not stand for the proposition that the two statutesare interrelated in the manner suggested by the City. InJones, the predecessor to sections 60-4- 401 etseq., MCA, was attacked on numerous constitutional grounds. Itwas argued that the relocation statutewould transform a bare permissive use of public roads by utility companies into a vested property right. Section 69-4-101, MCA, was cited to illustrate that the telephone and telegraph companies involved inthe litigation did not have a vested property right, but rather a 

### mere permission from the state to locate facilities on the public ways. This Court found that the relocation statutedid not give the utility companies a vested property right toplace facilities inthe public way, but rather the statutemerely recognized an equitable right inthe utilitycompanies tobe protected against any loss they might suffer as a result of the state's exercise of 

### itspolice power. The statehas ownership and control of allcity 

### streets in Montana, and if the statechooses todelegate authority to the city to control 

### its streets, the citybecomes 

### a trustee thereof. Palffy v. Director of Finance of City of Bozeman (1975), 168 Mont. 108, 540 P.2d 955; Statev. StateWater Conservation ~oard (1958), 134 Mont. 403, 332 P.2d 913; City of ~illings v. ~erold (1956), 130Mont. 138, 296 P.2d 263; Bidlingmeyer v. cityofDeer Lodge (1954), 128Mont. 292, 274 P.2d 821. The statemay also revoke the jurisdiction given to the city to control and maintain the city streets. Bidlingmeyer, supra. The City of Helena, exercising the jurisdiction delegated to 

### it by the State, granted itself a franchise touse the streets for location of utilities controlled by the City in

### itsproprietary capacity. When operating ina proprietary capacity, a city

### is subject to the

same burdens, responsibilities and liabilities as a private business and 

### isentitled to the same rights, privileges and 

### immunities. Statev. Holmes (1935), 

### 100Mont. 256, 47 P.2d 624. When the jurisdiction of Broadway Avenue 

### was transferred from the City of Helena to the Montana Highway Department, the nature of the City's rights as a public utility did not change. Under

common law, any franchise granted to a public or private utility to use city streets 

### is subject to an implied obligation to relocate 

### its facilities therein at

### itsown expense when necessary tomake way for a proper governmental use of the streets. Jones

v. Burns (1960), 138Mont. 268, 357 P.2d 22; Connecticut Ry. & L. Co. 

### v. New Britain Redev. Comm'n (1971), 161Conn. 234, 287 A.2d 362; McQuillin, Municipal Corporations, §§ 34.72, 34.74(a), (1970 ed.). The fact that the governing body which requires the relocationwas not the grantor of the franchise does not affect the power to require relocation, nor does 

### it affect the applicability of sections 60-4-401 

### et seq., MCA. It 

### is the position of the City of Helena that the utility facilitieswere the private property of the City and thatjust compensation must be paid under Mont. Const., Art. 11, Sec. 29, for the "taking" of the facilities. The DistrictCourt found thatwhen the Staterequests the utility tomove 

### its facilities, there 

### isno "taking" inthe constitutional sense. There was no
error inthis conclusion.

### While itis true thatprivate property of a municipality cannot be taken without just compensation, City of Three Forks

v. StateHighway Commission (1971), 156 Mont. 392, 480 P.2d 826; and that the utility facilities are the private property of the municipality acting initsproprietary capacity, appellant's conclusion that forced relocation of the utilitiesrequires just compensation does not follow. If the state action 

### is a proper exercise of the,pol-ice power and isdirectly connected with matters of public health, safety and welfare, a reasonable burden may be imposed upon private property without compensation. Yellowstone Valley Electric Cooperative, Inc. v. Ostermiller (1980), 

## - Mont. I 

## - P.2d 

## , 37 St.Rep. 536. On the other hand, if the state 

## - action is an exercise of the eminent domain power whereby private property 

### is taken for 

### a public use, just compensation 

### isrequired. See e.g. McTaggert v. Montana Power Co. (1979), Mont. P.2d 

## - -I 

## - 

## , 36 St.Rep. 2079. The lineof demarca

## - tion 

### is not always clearlyvisible. InMcTaggert, the owner of agricultural land petitioned for relocation of a utility linepursuant to sections 69-4-401 

### et seq., MCA, 

### alleging that he desired to install a new irrigation system and that the utility linewhich crossed his land interfered with the planned system. The statutes

### were found to constitute a taking of privateproperty for public use under the eminent domain power rather than an exercise of the pol-ice power. Public health, safety and welfare were only indirectly concerned. The Yellowstone Valley case involved a challenge to a statutewhich required utilities attheir own expense to raise

or remove their transmission lines to allow for the passage of oversized equipment and structuresbeing moved on the public highways. Section 69-4-603, MCA. 

### For several reasons thestatutewas found tobe a regulation enacted within the police power of the state. Public safetywas promoted by the statute which was intended toprevent electrical accidents. Second,



### a public benefitwas conferred with minimal interferencewith theprivate rights of the utilities. And most significantly, therewas no appropriation of a property rightbecause: "In locating their facilities upon a public right-of-way, utilities and cooperatives are conferred a property rightwhich, by 

### itsvery nature, 

### is subject to other competing franchises and privileges. The easement which 

### isobtained 

### is not an absolute property right; there 

### is no right conferred upon utilities to have their facilities occupy a particular location." Yellowstone Valley Elec. Coop., Inc. 

### v. Ostermiller, supra, 37 St.Rep. 536, 540. The McTaggert situationinvolved a greater property right, since theutilityhad an easement acrossprivate land which was disturbed by the application of the statute. The City of Helena did not have an absolute right to locate 

### its utility facilitiesin the 

### street, but rather the right

was subject to the State's exercise of 

### itspolicepower. Jones, supra. The benefit to thepublic asa whole outweighed the temporary deprivation and inconvenience suffered by the City. We find that the DistrictCourt correctly concluded thatwhen the Staterequired theCity to relocate 

### its utilities, therewas

no taking inthe constitutional. sense, but rather a legitimate

use of thepolice power for which no compensation 

### is required. Finally, theCity argues that the doctrineof local selfgovernment prevents application of section 60-4-403, MCA, to Montana'

### s cities, and that the statuteunconstitutionally compels the City to incur a debt or impose taxes without 

### its consent. We find no 

### meritinthese contentions. The legislature inenacting sections 60-4-401 

### et seq., MCA, sought to alleviatepart of the burden imposed upon utilities by the common law rulewhich required utilities to shoulder the entire

### expense of relocation of facilities. Jones, supra. The statutesrequire the State toassume 75 percent of the cost of relocation necessitated by federally aided projects. Since the statutealleviatesmost of theburden previously imposed upon utilities, the City's argument that the legislature has imposed a tax or compelled the incurrence of a debtmust fail. Nor 

### is the right of home rule adversely affected by the statute. It 

### isdifficult toperceive how a statutealleviating

a financial burden could constitute an impermissibl-emeddling intopurely local affairs. Affirmed.

Chief Justice