Opinion ID: 1198948
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: The plaintiff District is a quasi-municipal corporation, established in the early 1950s to provide treated water to rapidly growing areas in and around Johnson County. The Act provided for the establishment of new, and the acquisition of existing, water distribution systems within the District's boundaries. The Club, a Missouri corporation organized as a private social and golf club, is located within the boundaries of the District. The Club's golf course is located on the eastern edge of the District's boundary and next to the western boundary of Kansas City, Missouri. The Club and its golf course were originally within the franchise service area of the former Kansas Water Company (KWC). The KWC was a privately owned water utility that obtained its water supply from Kansas City, Missouri. In 1990, the area formerly served by the KWC was voluntarily annexed by the District under K.S.A. 19-3512. When KWC's service area was annexed, the Club became a District inhabitant. The Club has consistently purchased large volumes of water, at high rates of flow, from the District for irrigation purposes. After the annexation, and in reliance on the consumption history and anticipated future demand within the KWC service area, the District invested in substantial capital improvements. The District wished to enhance its water supply facilities and distribution mains to accommodate future demand, which is affected by the large maximum day and maximum hour flow requirements of the Club. The District made these improvements in conformance with recommendations made in a 1991 hydraulic study completed by an engineering firm. In 1994, the District developed a new rate structure to encourage reduction of peak or summer consumption of water services. The objective was to more nearly equalize the demands for water services over the year on plant and facilities and reduce the need for future expenditures for a new plant and increased facility capacity. The new rate structure resulted in a large increase in the Club's water bill. The Club has neither challenged the rate structure nor complained about the quality of service it received. In 1994, the Club began investigating ways to reduce irrigation costs. After deciding that use of effluent waste water would not result in savings, the Club entered into a lower priced purchase agreement with the water department of Kansas City, Missouri. By constructing a private pipeline under State Line Road, the Club would be able to pipe pressurized treated water from Kansas City, Missouri, to water its greens and fairways. The water purchase agreement contemplates a water meter on the Missouri side of State Line Road. When the Club notified the District of the agreement, the District objected. The District's elected board adopted the following rule: Pursuant to Water District law, K.S.A. 19-3501 et seq., the Water District has the exclusive right and duty to serve, supply and service all users of treated water within its boundaries, and therefore no treated water shall be provided through any type of water supply or distribution pipe, conduit or other system, regardless of the point of supply, for use within the District's boundaries by any other water utility or other source of supply unless otherwise authorized by these Rules or by contract with the Water District. Representatives of the Club's board attended the hearing on adoption of the exclusivity rule. The Club informed the District of the Club's intent to disregard the rule. Eventually, the District filed this action seeking to enjoin the Club from obtaining water from any source other than the District. The District was concerned that customers located on or near its boundaries would contract with adjoining water utilities to purchase water to the detriment of the District. (Six other water districts are adjacent to the District on the north, west and south.) The District believed that unless it was the exclusive supplier of treated water to citizens living within its boundaries it would be subject to ruinous competition.