Opinion ID: 777777
Heading Depth: 2
Heading Rank: 3

Heading: Priority of Sewer and Water Bills

Text: 39 Tecumseh asserts that its liens for MBA Poultry's unpaid sewer and water bills have priority over Dapec's construction lien. Under Nebraska law, 40 All special assessments, regularly assessed and levied as provided by law, shall be a lien on the real estate on which assessed, and shall take priority over all other encumbrances and liens thereon except the first lien of general taxes under section 77-203. 41 Neb.Rev.Stat. § 77-209. According to Tecumseh, its sewer and water bills have priority because its ordinances authorize a delinquent sewer or water bill to be collected as a special tax in the manner provided by law. Tecumseh City Code, §§ 3-121, 3-212. 42 Under Nebraska law, [s]ewer use charges are not special assessments. Rutherford v. City of Omaha, 183 Neb. 398, 160 N.W.2d 223, 228 (1968). Tecumseh concedes this point, but argues Nebraska law allows a municipality to treat such charges as if they were special assessments. 7 43 Tecumseh's argument rests ultimately on two Nebraska statutes. First, Nebraska allows a city of the second class, such as Tecumseh, to collect delinquent sewer charges in the same manner as other municipal taxes are certified, assessed, collected and returned. Neb.Rev.Stat. § 18-503. Second, Nebraska also permits cities of the second class to provide by ordinance for the collection of water charges and taxes. Neb.Rev.Stat. § 17-538. Neither of these statutes specifically permits a municipality to treat unpaid utility bills like special assessments. 44 Because they lack such provisions, the statutes cited by Tecumseh do not make unpaid sewer and water bills the equivalents of special assessments. In Nebraska, any statutory authorization to levy special assessments must be strictly construed against the municipality. Foote Clinic, Inc. v. City of Hastings, 254 Neb. 792, 580 N.W.2d 81, 84 (1998). Although section 18-503 allows a municipality to collect sewer bills in the way it collects other municipal taxes, it says nothing in particular about levying or collecting special assessments. Section 17-538, which authorizes the collection of water bills, says nothing at all about special assessment procedures. Construing these statutes strictly against Tecumseh, as we must, we hold that they do not give automatic priority to Tecumseh's sewer and water bills. 8 45 While Nebraska law does not give MBA Poultry's unpaid sewer and water bills automatic priority, those bills may still be liens. See Neb.Rev.Stat. §§ 17-538, 17-925.01. Dapec does not contest the district court's holding that the sewer and water bills are liens. As liens, the unpaid sewer and water bills may or may not have priority over Dapec's construction lien under Nebraska's general rules governing lien priority. Thus, the district court correctly ordered the case remanded to the bankruptcy court for a new determination of priority.