Case Name: Cleveland Electric Illuminating Company, Appellant, v. City of Cleveland et al., Appellees
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1988-05-25
Citations: 37 Ohio St. 3d 50
Docket Number: No. 87-852
Parties: Cleveland Electric Illuminating Company, Appellant, v. City of Cleveland et al., Appellees.
Judges: Moyer, C.J., Sweeney and Wright, JJ., concur.
Reporter: Ohio State Reports, Third Service
Volume: 37
Pages: 50–56

Head Matter:
Cleveland Electric Illuminating Company, Appellant, v. City of Cleveland et al., Appellees.
[Cite as Cleveland Elec. Ilium. Co. v. Cleveland (1988), 37 Ohio St. 3d 50.]
No. 87-852
Submitted February 16, 1988
Decided May 25, 1988.
Squire; Sanders & Dempsey, Daniel J. O’Loughlin, Frank J. Pokomy, Alan D. Wright and Carl E. Chancellor, for appellant.
Calfee, Halter & Griswold, JohnE. Gotherman, Mark I. Wallach, Marilyn G. Zack, director of law, and June M. Wiener, for appellees.
Kelley, McCann & Livingstone, Stephen M. O’Brien and Daniel S. Strouse, urging affirmance for amicus curiae, Ohio Municipal Attorneys Assn.
Patrick A. D’Angelo, urging reversal for amicus curiae, Cleveland Police Patrolmen’s Assn.

Opinion:
Douglas, J.
The question we must decide today is whether the Charter of the city of Cleveland forbids the release of Muni Light from any obligation to repay the sum of $29,450,273 previously expended by the city for the benefit of Muni Light. We hold that the city charter prohibits the use of tax-generated funds to subsidize municipally owned public utilities such as Muni Light.
The Charter of the city of Cleveland contains the following pertinent provisions:
Ҥ 41 Transfer of Appropriations.
"Upon the written recommendation of the mayor, the council may at any time transfer an unencumbered balance of an appropriation made for the use of one department, division or purpose to any other department, division or purpose, but no such transfer of revenues or earnings of any non-tax supported public utility to any other purpose shall be made [with certain exceptions not relevant here] (Emphasis added.)
Ҥ 111 General Powers and Duties.
"The Director of Public Utilities shall manage and supervise all non-tax supported public utility undertakings of the City, including all Municipal water, lighting, heating, power and transmission enterprises, but excluding mass transportation enterprises, and such other utilities now owned or hereafter acquired by the City of Cleveland as may be placed under any management and supervision other than that of the Director of Public Utilities." (Emphasis added.)
The meaning of the words "non-tax supported" in the above charter provisions is the determinative issue in this case. Appellees contend that these words do not constitute a prohibition on the use of tax revenues to support the city's ownership and operation of its public utilities. We do not agree. Our review of the relevant charter provisions compels us to conclude that the words "non-tax supported" were intended to establish that municipally owned and operated utilities shall be self-supporting enterprises independent of public subsidies.
Section 111 of the charter, quoted above, provides that the director of public utilities "shall manage and supervise all non-tax supported public utility undertakings of the City, including all Municipal water, lighting, heating, power and transmission enterprises ." (Emphasis added.) Obviously, all municipally owned and operated public utilities, with certain stated exceptions, are intended to be non-tax supported. Such public utilities are specifically defined as including municipal lighting and power enterprises, of which Muni Light is clearly an example.
Appellees place much emphasis on the absence from the charter of a specific provision prohibiting municipally owned public utilities from receiving support from tax monies. In our view, however, this prohibition is proclaimed by the very use of the words "non-tax supported public utility." Appellees' proposed conclusion can only be sustained by a disregard for that phrase as it is used throughout the Cleveland Charter. A court construing a provision in a city charter, statute, contract or other writing may not ignore the existence of any word or phrase. The inadvisability of such an approach is particularly apparent in the case before us, where the consequences of ignoring the phrase in question could be extreme.
It cannot be disputed that once the debt is excused, Muni Light becomes a tax supported utility, since the money advanced was taken from tax-generated city funds. If this change in status from a non-tax supported to a tax supported utility is permitted to occur, then all the provisions in the Cleveland City Charter relating to non-tax supported public utilities -will no longer apply to Muni Light. For example, the authority given by Section 111 to the city's director of public utilities to "manage and supervise all non-tax supported public utility undertakings of the City " will no longer include any authority over the (now tax supported) Muni Light. Section 112, governing the fixing of rates charged by non-tax supported public utilities, will likewise have no application to Muni Light. Section 41 would no longer prohibit the transfer of Muni Light revenues or earnings to any other purpose.
The practical effects of appellees' proposed approach could be far-reaching. Consider a fact pattern wherein a city (here Cleveland) decides to provide support to its municipally owned water public utility from the city's tax-generated general fund. It would seem that the water utility would no longer be "non-tax supported." It would follow then, as noted above, that the section of a charter (herein Section 41) that prohibits transfer of revenues or earnings from the utility to any other purpose would be inoperative — because the utility is no longer non-tax supported and thus not governed by the restriction. Thus, a water rate, exceeding that which was necessary to operate the water utility, could be charged and the excess revenues transferred to pay for other activities not in any way connected with the production and sale of water. In our judgment, appellees' approach would provide a way for city councils and administrations to raise general operational money through rates instead of requiring that such money be raised through traditional tax measures. The excessive rate becomes, in effect, a hidden tax.
This result is clearly -untenable. When the larger picture is considered, the importance of the phrase "non-tax supported" becomes plain. Contrary to the view advanced by appellees, this phrase does have meaning — a crucial meaning. Tax-generated funds may not be used to support Muni Light.
In matters of construction, " it is the duty of this court to give effect to the words used, not to delete words used or to insert words not used. " (Emphasis added.) Columbus-Suburban Coach Lines v. Pub. Util. Comm. (1969), 20 Ohio St. 2d 125, 127, 49 O.O. 2d 445, 446, 254 N.E. 2d 8, 9. It is argued that by interpreting the charter as prohibiting tax support of municipally owned public utilities, this court is inserting words into the charter, since that document contains no provision specifically declaring that such support is forbidden. However, this approach overlooks the fact that the rule of construction cited above consists of several imperatives. Courts are commanded to refrain from inserting or deleting words. However, we are also directed to "give effect to the words used ." Id. The Cleveland City-Charter uses the words "non-tax supported" in connection with municipally owned public utilities, not just once but several times. We cannot pretend that these words do no exist or that they have no meaning.
Nor are the words "non-tax supported" limited in their prohibitive effect to outright transfers of tax-generated funds to utilities such as Muni Light. Support in any form is forbidden where such support is derived from tax revenue. Any money advanced to Muni Light from the general fund or other tax-generated source on terms substantially more favorable than those generally available in the commercial market constitutes "support" to the extent that Muni Light enjoys a benefit therefrom. Where a "non-tax supported" utility receives an advancement from a tax-generated fund on terms which call for, as an example, interest payments far lower than the prevailing rate, or which set forth an unrealistically lengthy repayment schedule, the advancement provides "support" in much the same manner as an outright gift. Should this occur, the utility would become tax supported in violation of the city charter.
We agree with appellees that the Ohio Attorney General Opinions cited by appellant regarding advancements are not applicable. The advancements approved in the situations described therein were made with the expectation of prompt and full repayment to the general fund. Obviously, no such expectation existed in the case before us today, since Muni Light was relieved of its obligation to reimburse the general fund. Given the prohibition contained in the Cleveland City Charter, any "advancement" from the general fund to a non-tax supported municipal utility would be forbidden where, as here, there is no anticipation of full and prompt repayment.
We hold, therefore, that a municipality may not support a municipally owned public utility with monies derived from tax-generated revenue where the city charter provides that such utilities are to be "non-tax supported." Where a city charter declares that municipally owned public utilities are to be "non-tax supported," that prohibition extends to advancements from a tax-generated fund to such public utilities where there is no expectation of prompt and complete repayment.
Accordingly, pursuant to the foregoing, we find that money advanced by the city to Muni Light without provision for prompt and full repayment is an act in violation of the city charter. Therefore, the advanced sums remaining unpaid must be promptly and fully reimbursed by Muni Light to the general fund of the city in accordance with a repayment plan to be approved by the trial court. The judgment of the court of appeals is hereby reversed, and the cause is remanded to the trial court for further proceedings consistent with this opinion.
Judgment reversed and cause remanded.
Moyer, C.J., Sweeney and Wright, JJ., concur.
Locher, Holmes and H. Brown, JJ., dissent.
We are not unaware of the provisions of R.C. 743.05.
1951 Ohio Atty. Gen. Ops. No. 859; 1951 Ohio Atty. Gen. Ops. No. 933; 1954 Ohio Atty. Gen. Ops. No. 4342; 1964 Ohio Atty. Gen. Ops. No. 960; 1964 Ohio Atty. Gen. Ops. No. 1209.