Opinion ID: 2516695
Heading Depth: 2
Heading Rank: 2

Heading: utah municipal bond act

Text: ¶ 32 Low sought injunctive and declaratory relief in the verified complaint in which Low alleged that Monticello City violated the Utah Municipal Bond Act (the Act), Utah Code Ann. §§ 11-14-1 to -9 (1999), or in the alternative, that Monticello City violated the Notice of Debt Issuance Act, id. § 11-14a-1. The trial court granted Monticello City summary judgment on this claim, concluding that (1) the Governmental Immunity Act shields Monticello City from this claim, (2) this claim is unripe, (3) Low lacks standing to pursue this claim, (4) the Act did not require Monticello City to publish a bond notice, and thus any alleged misstatement in the notice did not violate the Act, and (5) the Notice of Debt Issuance Act is inapplicable to this case. Low did not argue on appeal that the trial court erred in concluding that the Notice of Debt Issuance Act is inapplicable, and we will therefore not address it. See Holmes Dev., LLC v. Cook, 2002 UT 38, ¶¶ 54-55, 48 P.3d 895. Thus, we turn to whether the trial court properly granted Monticello City summary judgment on Low's claim that Monticello City contravened the Act by making misstatements in the notice of bonds to be issued. ¶ 33 To the extent constitutionally permissible, municipalities . . . may issue bonds payable solely from . . . revenues derived from the operation of revenue-producing facilities such as electrical power systems. Utah Code Ann. § 11-14-17 (1999); see also id. § 11-14-1(1)(k); Tribe v. Salt Lake City Corp., 540 P.2d 499, 505 (Utah 1975) (noting that revenue bonds are to be paid, interest and amortization of the principal, by the revenues derived from the project); Utah Power & Light Co. v. Ogden City, 95 Utah 161, 171, 79 P.2d 61, 66 (1938) (stating that holders of proposed revenue bonds can satisfy bonds only from earnings of proposed power plant). Before the municipality can issue revenue bonds under the Act to cover the power system acquisition costs, the municipality's governing body must pass a resolution providing for the issuance of the bonds, Utah Code Ann. § 11-14-14 (1999); see also id. § 11-14-17, but the Utah Code does not obligate the municipality to hold an election of the general public regarding the issuance of revenue bonds, id. § 11-14-13; see also Mun. Bldg. Auth. v. Lowder, 711 P.2d 273, 277 (Utah 1985). The resolution must specify either the rate or rates of interest, if any, on the bonds or specify the method by which the interest rate or rates on the bonds may be determined while the bonds are outstanding. Utah Code Ann. § 11-14-14(1). ¶ 34 Low first argues summary judgment was inappropriate because the trial court erred in concluding that the Act did not require the city to publish the notice of bonds to be issued and that therefore Monticello City did not violate the Act in making any misstatements in an optional notice. It is unnecessary, however, to address this contention if it is determined that the notice of bonds to be issued published by the city did not contravene the Act. Although we may not directly address the trial court's conclusion with such a holding, we can affirm a trial court's order if the order `is sustainable on any legal ground or theory apparent on the record.' Bailey v. Bayles, 2002 UT 58, ¶ 10, 52 P.3d 1158 (quoting Dipoma v. McPhie, 2001 UT 61, ¶ 18, 29 P.3d 1225 (quotation omitted)). ¶ 35 In this case, after the city passed resolution 2000-3 authorizing the issuance of revenue bonds to cover the cost of acquisition of the system, the city published a notice of bonds to be issued. With respect to such notice of bonds to be issued, the Utah Code states: In case of a resolution or other proceeding providing for the issuance of bonds, the governing body may, in lieu of publishing the entire resolution or other proceeding, publish notice of bonds to be issued, titled as such, containing: (a) the name of the issuer; (b) the purpose of the issue; (c) the type of bonds and the maximum principal amount which may be issued; (d) the maximum number of years over which the bonds may mature; (e) the maximum interest rate which the bonds may bear, if any; (f) the maximum discount from par, expressed as a percentage of principal amount, at which the bonds may be sold; and (g) the times and place where a copy of the resolution or other proceeding may be examined, which shall be at an office of the issuer, identified in the notice, during regular business hours of the issuer as described in the notice and for a period of at least 30 days after the publication of the notice. Utah Code Ann. § 11-14-21(3) (1999) (emphasis added). ¶ 36 Low asserts that Monticello City violated subsection 11-14-21(3) of the Act because the City misrepresented to its residents [both] in . . . the notice of intent to issue and in the information on file with the City the maximum interest rate and maximum principal amount of the bonds. Subsection 11-14-21(3) provides that the municipality can give notice of a resolution authorizing the issuance of bonds in lieu of publishing the entire resolution because the subsection merely serves to afford persons in interest notice that a resolution was enacted authorizing the issuance of bonds and notice of the material contents of such resolution so that persons in interest have the opportunity to challenge the bonds. See id. § 11-14-21(3). Accordingly, a municipality makes misrepresentations in a notice of bonds to be issued only if the material terms of the bonds to be issued as set forth in the notice do not comport with the resolution authorizing the bonds. ¶ 37 In this case, the notice of bonds to be issued provided that the aggregate principal amount of the revenue bonds authorized in resolution 2000-3 would not exceed three million dollars. The notice of bonds to be issued also provided that the interest rate on those bonds would not exceed 6.75 percent per annum. The notice of bonds to be issued simply notified the public of the contents of resolution 2000-3: The notice provided that the city would issue not more than $3,000,000 aggregate principal amount of its Electric Revenue Bonds . . . to bear interest at a rate or rates of not to exceed six and three-quarters percent (6.75%) per annum. Because the notice of bonds to be issued perfectly recapitulates resolution 2000-3, the notice does not contain any misstatements regarding the city's intent to issue bonds. ¶ 38 However, this is not to say that a municipality does not have a duty to issue the bonds in conformity with the resolution as enacted, and consequently, with the notice of bonds to be issued. Indeed, because a resolution defines the parameters delimiting the material terms of a bond issuance, a municipality acts within its authority in issuing revenue bonds only when those bonds accord with the resolution. ¶ 39 Therefore, because Monticello City did not make any misstatements in the notice of bonds to be issued, it did not violate the Act, and the trial court did not err in granting Monticello City summary judgment on Low's Utah Municipal Bond Act claim. Accordingly, there is no need to decide whether the trial court correctly determined that the Act did not require the city to publish notice. In addition, because the city did not violate the Act, Low's contentions that the trial court erred in granting Monticello City summary judgment under the Governmental Immunity Act, the ripeness doctrine, and the standing doctrine are now moot and those issues need not be resolved on appeal. [5]