Case Name: PEARL RIVER VALLEY WATER SUPPLY DISTRICT, et al. v. HINDS COUNTY, et al.
Court: Mississippi Supreme Court
Jurisdiction: Mississippi
Decision Date: 1984-01-25
Citations: 445 So. 2d 1330
Docket Number: No. 54387
Parties: PEARL RIVER VALLEY WATER SUPPLY DISTRICT, et al. v. HINDS COUNTY, et al.
Judges: PATTERSON, C.J., BROOM, P.J., and ROY NOBLE LEE, J., concur.
Reporter: Southern Reporter, Second Series
Volume: 445
Pages: 1330–1364

Head Matter:
PEARL RIVER VALLEY WATER SUPPLY DISTRICT, et al. v. HINDS COUNTY, et al.
No. 54387.
Supreme Court of Mississippi.
Jan. 25, 1984.
William N. Reed, Neil P. Olack, J. Brad Pigott, Watkins, Ludlam & Stennis, Jackson, for appellants.
Natie P. Caraway, David W. Clark, Wise, Carter, Child & Caraway, Jackson, Robert Brooks, Barnett & Brooks, Carthage, for appellees.

Opinion:
WALKER, Presiding Justice,
for the court:
Hinds County, Leake County and Roger Stewart, appellees and cross-appellants, hereinafter referred to as Hinds County, et ah, initiated this action by bill of complaint, as amended, seeking an injunction, accounting and return of funds against the Pearl River Valley Water Supply District, et al.
BACKGROUND
On August 20, 1982, the Chancery Court of the First Judicial District of Hinds County entered its final judgment, permanently enjoining the Pearl River Valley Water Supply District from using any State ad valorem tax proceeds diverted to the District by Mississippi Code Annotated section 51-9-131 (1972) for any purpose other than paying, prepaying, redeeming or retiring bonds. The court also permanently enjoined the District from making a special levy under Mississippi Code Annotated section 51-9-139 (1972) in any year that the State ad valorem taxes paid to the District exceed the amount of the District's debt service.
The Pearl River Valley Water Supply District was created in 1958 with the Legislature's passage of the Pearl River Valley Water Supply District Law, Mississippi Code Annotated section 51-9-101, et seq. The District was formally established through petition to the Chancery Court of Hinds County. The voters of five counties —Hinds, Leake, Rankin, Madison and Scott — elected to make their counties members of the District.
The District is an agency of the State. Miss.Code Ann. § 51-9-105 (1972). Its powers are prescribed by statute, Mississippi Code Annotated section 51-9-121 (1972), and exercised by a board of directors, Mississippi Code Annotated section 51-9-107 (Supp.1982). Although it is an agency of the State, the District does not receive an appropriation of money by the Legislature from the general fund of the State.
Mississippi Code Annotated section 51-9-133 (1972) authorized and empowered the District to issue bonds of the District for the purpose of paying the costs of acquiring, owning, constructing, operating, repairing, and maintaining the project.
Since construction of the reservoir was completed, the expenses of the District, including debt service on the bonds, i.e., interest and principal, have been defrayed by the following revenues, according to the District records:
(1) The avails of two mills of the State ad valorem tax collected in each of the five-member counties (State levy);
(2) The avails of a special tax levy by the District board on property in the five-member counties in an amount not to exceed two mills (the special levy);
(3) Real estate development and lease payments;
(4) Camping, garbage, water and sewer, and miscellaneous fees;
(5) Interest on investments; and
(6) Contractual payments by the City of Jackson.
In its brief, the District acknowledges that the proceeds of the special tax, i.e., the special tax levy cannot be used to pay operation and maintenance expenses of the District. The District also acknowledges that in the past, the proceeds from the State levy and the other revenues mentioned above have been used first to pay operation and maintenance expenses with the balance being applied toward payment of debt service on the bonds. Hinds County, et al object to this method and contend that the State levy tax proceeds can only be used for retirement of the District's bonded indebtedness.
As late as 1968, the District's budgeted revenue from the full State levy and full special levy exceeded the District's bond cost, i.e., principal and interest payments, by only about $5,800.00. However, the revenues to the District from the State's two-mill levy have been increasing steadily and in 1982 were projected to yield $1,470,-000.00. By the year 1981, the revenues from the State's two-mill levy alone were sufficient to service the District's annual bond cost which is a relatively constant amount. For fiscal year 1983, the District anticipated that the revenues from the State two-mill levy alone, would exceed annual bond charges by $187,500.00.
The residential lessee population of the District by 1981 was approximately 5,000, and the District's "operation and maintenance" expenditures increased dramatically from $622,455.03 in 1972 to an estimate of $2,687,500.00 in 1982. A large portion of the District's budget during this period was spent furnishing services for the residential population, including utility service, police protection, fire protection, and street maintenance. Of these services furnished by the District to the lessees, there was no charge for the police protection, the fire protection, or the road and street maintenance. For many years the District provided free garbage pickup. The District has not charged the lessees for the police protection or for the road and street maintenance even though those lessees agreed, in their leases, to pay their pro-rata share of the cost of such services. The law provides for such charges; and it is patently unfair for the District's five-member counties to bear this burden. Miss.Code Ann. § 51-9-121(t).
The amount by which the District's "operation and maintenance" expenditures have exceeded receipts from the residential and commercial "lease rental" payments has grown from $417,464.16 in 1972, to $747,435.00 in 1976, to $1,651,482.00 in 1980, to a projected $2,558,000.00 in 1983.
Studies commissioned by the District revealed that with the escalating "operation and maintenance" cost of the District and the leases executed by the District, that even when the District is fully developed, its revenues from the annual "lease rental" payments will pay only about one-half of the "operation and maintenance" expense of the District. It is evident that the District will never be self-sustaining if expenditures are not brought under control.
BILL OF COMPLAINT
Hinds County, et al's bill of complaint, as amended, had five separate counts, only two of which are pertinent to this opinion.
In Count I, Hinds County, et al charged that under the Pearl River Valley Water Supply District Law, Mississippi Code Annotated sections 51-9-101 et seq, the proceeds of the State two-mill levy (section 51-9-131) are required to be used solely for the purpose of paying bonds or the costs of bonds issued pursuant to the District Law. They further contended that the amount received annually by the defendant-appellant Pearl River Valley Water Supply District under such State levy exceeded the District's annual bond costs, that no special levy under section 51-9-139 could be properly imposed, and that the District may apply the excess State levy revenues only to prepay bonds.
In Count II, Hinds County, et al contended that in making the determination of whether a special levy under section 51-9-139 was "necessary," and could thus be imposed, the District had not been giving Hinds County, or the other taxpayers of member counties, credit for substantial revenues, projected revenues and funds which were coming to the District or were available to the District, all in violation of the District Law and particularly of section 51-9-139.
CHANCERY COURT'S DECREE
After hearing the matter on the merits, the chancellor entered the court's final decree, which provided in pertinent part as follows:
"(1) That defendant Pearl River Valley Water Supply District is permanently enjoined, effective November 1, 1982, from using any funds paid to such District by Hinds County or Leake County by virtue of Mississippi Code Section 51-9-131 for any purpose or use other than paying, prepaying, redeeming or retiring the bonds issued under the Water Supply District Law;
(2) That defendant Pearl River Valley Water Supply District be and hereby is permanently enjoined from making any further special levy or special levy request as authorized by Section 51-9-139 so long as the revenue of the two mills levy under Section 51-9-131 is equal to or exceeds the amount needed to pay the principal of, interest on and costs of the bonds issued under the Water Supply District Law;
ASSIGNMENT OP ERROR AND LAW
The appellants, Pearl River Valley Water Supply District, et al have assigned, inter alia, that the chancellor erred in his construction of Mississippi Code Annotated section 51-9-131 and related provisions of the Pearl River Valley Water Supply Act.' In making his ruling, the chancellor placed much stress on the wording of section 51-9-131 saying:
Section 51-9-131 is composed of only one short statement. It states two mills payable on or before February 1, 1961, and so long as any bonds issued hereunder are outstanding, the tax collector of said county shall pay into the depository selected by the said water district . it goes on to state that the levy shall continue at not less than two mills on each county in the district so long as any bonds issued pursuant to this article remain outstanding. (Emphasis theirs).
It is clear to this Court that the intent of the Legislature was that the State levy of two mills would be used only for the payment of the principal of, interest on, and other charges in connection with said bonds. Likewise, the tax collector of the member counties was directed to pay said levy to the district for the purpose of paying off the bonds.
The Legislature then provided a safeguard by providing in Section 51-9-139 that in the event additional funds were needed in connection with the bonds, they might be raised by the special tax not to exceed two mills. The Defendants concede that this special tax can only be used for bond payments.
Significant to this Court is the language of Section 51-9-133, supra. This section states, inter alia, that the district is authorized to issue bonds for the purpose of paying the costs of acquiring, owning, constructing, operating, repairing, and maintaining the district. This section makes it clear the bonds shall not constitute general obligation bonds and provides that the said bonds shall be secured by three sources:
(A) A pledge of the net revenue,
(B) the two mills provided in Section 51-9-131, and
(C) The special tax provided in Section 51-9-139.
Defendants argue that if the Legislature had intended to restrict the two mill state levy authorized in Section 51-9-131, it would have done so. As stated above, this Court is of the opinion that the Legislature did just that when the two mills of all ad valorem taxes due by the member county was tied directly to the life of the bonds. It is inconceivable to this Court, as contended by Defendants, that the Legislature intended that the district might use this two mill levy for any purpose. Such a construction would say to the district, "You are not required to use any of the two mills from the five counties to pay bonds but may continue to use same for operation and maintenance."
We are of the opinion that the learned chancellor erred in his construction of section 51-9-181. The Pearl River Valley Water Supply District Law is a comprehensive act of the legislature and the legislative intent must be determined from the total language of the act and not from one section thereof considered apart from the remainder. McCluskey v. Thompson, 363 So.2d 256, 259 (Miss.1978), citing Brady v. John Hancock Mutual Life Insurance Co., 342 So.2d 295 (Miss.1977), appeal dismissed, 434 U.S. 804, 98 S.Ct. 32, 54 L.Ed.2d 61 (1977); Miss. Public Service Commission v. City of Jackson, 328 So.2d 656 (Miss.1976) and Akers v. Johnson's Estate, 236 So.2d 437 (Miss.1970). Additionally, the words of a statute or act should be ascribed their ordinary and usual meaning. Brady v. John Hancock Mutual Life Insurance Co., supra at 298; Entrican v. King, 289 So.2d 913, 917 (Miss.1974).
With these rules of construction in mind, we find it necessary to refer to several relevant statutes in the Pearl River Valley Water Supply District Law in order to determine the intent of the legislature.
First, Mississippi Code Annotated section 51-9-103 (1972) is a declaration of legislative policy with reference to the creation of the Pearl River Valley Water Supply District. That section states in part:
It is further determined and declared that the preservation, conservation, storage, and control of the waters of the Pearl River and its tributaries and its overflow waters for domestic, municipal, commercial, industrial, agricultural, and manufacturing purposes, for recreational uses, for flood control, timber development, irrigation, and pollution abatement are, as a matter of public policy, for the general welfare of the entire people of the state, (emphasis added).
That section goes on to provide in part: "All the terms and provisions of this article are to be liberally construed to effectuate the purposes herein set forth, this being a remedial law."
Mississippi Code Annotated section 51-9-159 (Í.972) made provisions for the District to acquire preliminary expenses prior to issuance of any bonds. That section reads:
Any municipality or county which is within the territorial limits of the district may advance funds to said district to pay the preliminary expenses, including engineers' reports, organization, or administration expenses . [and] The Board of directors is hereby authorized to repay any such advances from the proceeds of any bonds issued under the provisions of this article.
By this statute, it is evident that the legislature contemplated that the District would begin operation and have expenses prior to the issuance of any bonds or receiving any monies from tax levies. It was, therefore, a foregone conclusion that bonds would be issued and the Pearl River Valley Water Supply District would be in operation prior to February 1, 1961. This explains the provision in section 51-9-131 relied on so heavily by the chancellor, which states: "... beginning with the ad valorem tax assessment for the calendar year 1960, payable on or before February 1, 1961, and so long as any bonds issued hereunder are outstanding, the tax collector of said county shall pay into the depository selected by said water district for said purpose the amount of two mills of all ad valorem taxes due by said county to the State of Mississippi...."
After preliminary studies and plans were made for construction of the reservoir, the first bonds authorized by section 51-9-133 were issued and construction began.
The part of the Pearl River Valley Water Supply District Law authorizing the issuance of bonds is section 51-9-133 and is dispositive of the question before us. It provides as follows:
The board of directors of the district is hereby authorized and empowered to issue bonds of the district for the purpose of paying the costs of acquiring, owning, constructing, operating, repairing, and maintaining the projects and works specified herein, including related facilities, and including all financing and financial advisory charges, interest during construction, engineering, legal, and other expenses incidental to and necessary for the foregoing, or for the carrying out of any power conferred by this article. Said board of directors is autho-r rized and empowered to issue such bonds at such times and in such amounts as shall be provided for by resolution of the said board of directors, not to exceed the limitation prescribed in section 51-9-137. All such bonds so issued by said district shall be secured solely by a pledge of the net revenues which may now or hereafter come to the district, by the pledge of the avails of the two mill ad valorem tax levy provided for in section 51-9-131, and by the pledge of the special tax levy of two mills provided for in section 51-9-139; and such bonds shall not constitute general obligations of the Staté of Mississippi or of the counties comprising said district, and shall not be secured by a pledge of the full faith, credit, and resources of said state or of said counties. Bonds of the district shall not be included in computing any present or future debt limit of any county in such district under any present or future law. "Revenues " as used in this article shall mean all charges, rentals, tolls, rates, gifts, grants, tax proceeds, moneys, and all other funds coming into the possession of the district by virtue of the provisions of this article, except the proceeds from the sale of bonds issued hereunder. "Net revenues " as used in this article shall mean the revenues after payment of costs and expenses of operation and maintenance of the project and related facilities, (emphasis added).
Said section first authorized the issuance of bonds by the district for the purpose of paying costs of acquiring, owning, constructing, operating, repairing, and maintaining the projects and works specified, including related facilities, and including all financing and financial advisory charges, interest during construction, engineering, legal, and other expenses incidental and necessary thereto as well as for the carrying out of any power conferred by the Pearl River Valley Water Supply District Law. It then provided that "All such bonds so issued by said district shall be secured solely by a pledge of the net revenues which may now or hereafter come to the district, by the pledge of the avails of the two mill ad valorem tax levy provided for in section 51-9-131, and by the pledge of the special tax levy of two mills provided for in section 51-9-139_" The statute went on to define "Revenues" to mean all charges, rentals, tolls, rates, gifts, grants, tax proceeds, moneys, and all other funds coming into the possession of the District, except the proceeds from the sale of bonds. "Net revenues" was defined in the statute as "the revenues after payment of costs and expenses of operation and maintenance of the project and related facilities."
It is therefore clear from a study of the above statutes that the legislature contemplated that there would be expenses of operation and maintenance of the District other than the expenses of paying interest on and retiring the bonds, and that these expenses would have to be first met if the purpose of the District Law was to be accomplished. Therefore, if, as conceded by all parties, the wording of section 51-9-139 precludes the use of the avails of the "special levy" provided for under that section from being used for any purpose except for the retirement of bonds when necessary, there would remain all other funds coming into the possession of the District from whatever source, including the tax proceeds from the "State levy." From those funds, the statute (section 51-9-133) contemplates that there would first be deducted the payment of costs and expenses of operation and maintenance of the project and related facilities with the balance being applied to the retirement of the bonds. In the event there was not a sufficient amount remaining to pay the cost of interest and bond retirement in a given year, then and only then, the board of directors has the authority under section 51-9-139 to assess the additional "special levy" of not more than two mills to also be applied toward the retirement of bonds.
When all of the funds coming into the District are properly applied, there may or may not be a need for the special two-mill levy provided for under section 51-9-139, but, that question is not now before us.
We are of the opinion that the learned chancellor erred in issuing the injunction. Therefore, for the reasons set out above, the judgment of the chancery court enjoining the Pearl River Valley Water Supply District from using funds paid to the District by Hinds County and Leake County as required by section 51-9-131 (State levy) for any purpose or use other than paying, prepaying, redeeming, or retiring the bonds issued by the District, and from using any of the special levy funds authorized by section 51-9-139 (special levy) when the revenue from the two-mill levy provided for under section 51-9-131 is equal to or exceeds the amount needed to pay the interest on and costs of the bonds issued pursuant to the District Law; and, assessing attorney's fees in the sum of $70,204.28 against the District should be reversed without prejudice.
CROSS-APPEAL
On cross-appeal we are unable to say that the chancellor was manifestly wrong in not ordering a full accounting and in not awarding damages to Hinds County et al., the appellees. However, we are of the opinion that this cause should be remanded to the chancery court for further hearings, if necessary, with reference to Count IV of the amended bill of complaint in which it is alleged as follows:
Regardless of which tax revenues the Water Supply District has used to make the annual bond payments — whether some of the Section 51-9-131 funds or some of the Section 51-9-139 funds — at least a substantial portion of the remaining tax revenues received by the Water Supply District have been and continue to be used by the defendants for purposes which are not authorized by the Water Supply District Law, which the Water Supply District does not have the power to perform or fulfill, which other political subdivisions have a duty to perform or fulfill, or which the Water Supply District has no legal or moral obligation to perform or fulfill. Furthermore, the Water Supply District has used such remaining tax funds for items and services which are not necessary to the fulfillment of the purposes and functions of the Water Supply District as set forth in the Water Supply District Law.
If the court finds that the Water Supply District is using District funds for purposes which are not authorized by the Water Supply District Law, or which the Water Supply District does not have the power to perform or fulfill, or which other political subdivisions have a duty to perform or fulfill, or which the Water Supply District has no legal or moral obligation to perform or fulfill or which are not necessary to the fulfillment of the purposes and functions of the Water Supply District as set forth in the Water Supply District Law and which are not discretionary functions of the District, the court should enter a decree incorporating its findings with regard thereto and enjoin the District and its officers and directors from any future violations with respect to said specific findings.
If the court should find that the District has violated the District Laws or exceeded its authority and enjoins the District from future violations, then, in that event, the court may award attorney's fees to cross-appellants that seem just and proper under the circumstances.
The judgment of the chancery court on direct appeal is reversed and injunctions dissolved without prejudice.
On cross-appeal this cause is remanded for further proceedings not inconsistent with this opinion.
REVERSED ON DIRECT APPEAL AND INJUNCTIONS DISSOLVED WITHOUT PREJUDICE:
All Justices participating concur.
REMANDED ON CROSS APPEAL FOR FURTHER PROCEEDINGS:
All Justices participating concur.
ON DENIAL OF ATTORNEYS' FEES AND ON DENIAL OF FULL ACCOUNTING:
PATTERSON, C.J., BROOM, P.J., and ROY NOBLE LEE, J., concur.
BOWLING, HAWKINS, PRATHER and ROBERTSON, JJ., dissent.
DAN M. LEE, J., not participating.
. One of the primary purposes of the Reservoir was for flood control according to the legislative determination and declaration of policy. Miss. Code Ann. § 51-9-103 (1972).
. It is evident from the record that a disproportionate amount of these expenditures are incident to the residential development upkeep, maintenance, police protection, etc., and have no relationship to the primary. purposes for which the Reservoir District was created. Miss. Code Ann. § 51-9-103 (1972).
. Section 51-9-135 provides that no bonds shall have a longer maturity than forty (40) years from January 1, 1961. This would make the last bond mature no later than January 1, 2001 and would terminate the State tax levy (section 51-9-131) and the authority for the special tax levy (section 51-9-139).
. The term "operation and maintenance" does not encompass permanent improvements or capital expenditures.
. In determining the gross revenues coming into the hands of the District, exclusive of sums from the special levy, the Act is clear that there should be taken into consideration all moneys coming into the hands of the District from any and all sources without exception. The Act does not provide for "special funds" such as the "Property Improvement Fund" set up by the District to be deducted from the gross revenues before determining the need for the special levy. It is true that there was a period of approximately one year from March 1973 until June 1974 that section 51-9-140 provided that estimated costs of planning and construction of improvements of public benefits on the shoreline of the project and within the project not to exceed $350,000 during any one year, were to be deducted from the gross revenues prior to determining whether the "special levy" provided for in section 51-9-139 could be requested and levied. However, that statute (section 51-9-140) contained an automatic repeal clause effective March 1973 and is no longer in effect.