Opinion ID: 1106817
Heading Depth: 1
Heading Rank: 4

Heading: the city's financial ability to make the improvements and furnish the municipal services, as promised

Text: Prior to the passage of the ordinance, the governing authorities of the City had devoted considerable study to the proposition of expansion. They had created a Planning Board, composed of 35 men and women, and hired a full-time Director and staff. They had intensified their study for the preceding three years. An overwhelming majority of the Planning Board, present and voting, approved an expansion, substantially in conformity with the boundaries, which were fixed in the ordinance. It was shown that in 1949, the time of the last expansion, there was a deficit of over $85,000 in the general fund.  Notwithstanding this situation, the City had been able to render the services to the people affected in that instance. At the time of the passage of the ordinance, as contradistinguished from the previous expansion, the City had already completed and financed adequate facilities to furnish water for a quarter of a million people. Besides there was on hand and in unsold bonds in excess of $5,000,000, available toward the provision of fire and police protection, library, sanitary sewers, water, street lighting and other municipal services to the people of the City and in the annexed area. Too, there was a surplus in the general fund as of September 30, 1958, of $2,021,989.49, for immediate municipal services to the people in the City and in the annexed area. The assessed valuation of property within the City for 1948 was $91,903,412, whereas in 1958 this amounted to $220,782,438. The estimated assessed value of the property in the annexed territory was $40,524,900. Insofar as ad valorem taxation was concerned, the levy for 1958 was 20.50 mills as compared to 19.75 mills in 1948. The Jackson Separate School District, a separate legal entity, has been working on a large school building program, with the result that the levy for school purposes has been increased to 22.00 mills in 1958 as compared to 12.25 mills in 1948. While the City had outstanding approximately $21,000,000 of bonds and other indebtedness, under the debt limitation of 15%, it still had a margin between $11,000,000 and $12,000,000. In like manner, the Separate school district lacked between $17,000,000 and $18,000,000 of reaching the allowable debt limitation status. It was further shown that the City has an excellent bond rating of BAA, in fact, the same as Hinds County. In contrast to the picture of financial affairs, as presented by the witnesses for the City, A.N. Morgan, a certified public accountant, and witness for the appellants, testified that the City, on Sept. 30, 1949, when the  last expansion occurred, had outstanding general, street intersection, water works, and special assessment bonds in the amount of $9,041,500, whereas on February 25, 1959, it had outstanding and authorized for those purposes $27,233,000. School bonds of the Jackson Separate School District outstanding as of September 30, 1949, amounted to $745,000, whereas on February 25, 1959, there was outstanding and authorized for that purpose $21,047,000. By combining the overall bonded indebtedness of both the City and the Separate school district, he estimated that there has been a debt increase within the past ten years of approximately 393.43 per cent, with an estimated debt increase per person from $117.90 to $386.16. Also, under his estimates, the residents in the annexed areas will assume a per capita debt of $151.01. Along with this, there had been an increase from 32 to 42.5 mills. In addition, for several years, the City had been collecting a one-half cent sales tax, which produced about $1,000,000 a year, the equivalent of a 4.6 mill increase in ad valorem taxes. On his basis of the cost of operating the added area, he estimated that there would be an annual recurring cost item, and, on the basis of the expected tax revenue, the City would have an operating deficit each year of $584,363.20. By September 30, 1962, he said that the surplus in excess of $2,000,000 will be gone, and there will be a deficit of $420,001.23. He concluded that the expansion will necessitate a 10.29% increase in taxes for all property within the City. It was shown that the City contemplated the erection of six new fire stations, one of the six having two rather than one company, and that the people, in the annexed area, would receive substantial reductions in their fire insurance rates. Actually the City had furnished fire protection to Area 13 for the last ten years, having answered 39 calls in that area. The City's waterworks system was presently supplying water to a substantial number of residences in Area  13. The inclusion of this area will automatically reduce present rates one-half. Besides, the patrons of private companies will reap the same benefits. The City water lines can be tied into the existing lines in the whole area, according to the City's estimates, for $734,525, and the City has entered into a contract to purchase the Hinds County Sewer System. Under the City's evidence, it will be able to make the improvements and furnish the services, which it has promised in the ordinance. However, the witnesses, living in Area 13, who testified in opposition to the inclusion, with one accord, were satisfied with their present situation, including water supply, private garbage collection, road maintenance by the county, and police protection from the county authorities. While depending largely on septic tanks and lagoons, they were of the opinion that their disposal of sewage was sufficient and satisfactory. They were greatly concerned over the loss of transportation for their children to school. While these children will continue to attend the Jackson City schools, they will be required to ride the regular busses and pay therefor, or be transported by private conveyances. Some of them say that they would call the City fire department in case of a fire. In other words, these witnesses did not think that they needed the City services, and they believed that they will sustain a heavy increase in their tax bills without correspondent benefits. The appellants emphasized the fact that the estimated cost to supply water for Area 13 was $245,137, or practically one-third of the total cost of estimated expenditures for this purpose, and that the anticipated gain in population in that area is only about 15,000. They further pointed out that, while the City had a contract of purchase of the named sewer system, there was no estimate as to the cost of it or other water and sewerage utilities. They also maintain that the figures on garbage  collection, while showing an increase of 50%, at the same time, showed an increase of 130% in the cost thereof. (A) Beyond question, the evidence in this record showed that there is an urgent need for the expansion of the City's corporate limits. (B) It is true that Area 13 constitutes a considerable territory. But it is clear that there are already substantial developments in that part of the proposed expansion, and that the area is building up rapidly. The trends indicate that it is attractive to would-be homeowners as well as for commercial and industrial enterprises. While there are gaps between the city limits and some of the areas under development, it appears that like situations existed in other expansions. While one experienced realtor testified that he always developed a subdivision more cheaply before it was taken into the corporate limits than after, and that the construction would be just as good without city control, his success does not necessarily establish a rule to that effect. Others might effect their profits by faulty construction. There is much merit in the theory of overall planning, namely, where it can be reasonably anticipated that a certain area will become a part of a city in a reasonable time, it is better to take it in and develop the same properly and wisely, with particular reference to a uniform system for securing water, the development of streets, and the collection and disposal of sewage and waste, rather than to let the area develop in a harum-scarum manner as each builder or developer may determine. Instances of the lack of uniform planning in laying out streets, water lines, and sewage disposal in the towns and cities can be seen on every hand. It must be borne in mind too that the final decree in fact excluded a large part of the territory in Area 13. (Hn 7) The burden of proof was on the City to establish that the enlargement of its boundaries was reasonable.  In Re Extension of the Boundaries of the City of Indianola, 226 Miss. 760, 85 So.2d 212; Spears v. City of Oxford, 227 Miss. 801, 87 So.2d 61. (Hn 8) Since the learned chancellor very properly excluded a large part of Area 13, the Court is of the opinion that there was substantial evidence before him, and he was fully warranted in finding that the inclusion of Area 13, as modified, was reasonable. (C) Evidently if the effluent and waste from the septic tanks and the lagoons in Areas 12 and 13 are permitted to drain into Pearl River upstream from the City's raw water intake, there will be pollution of the City's water supply, which could result in a health hazard to those using such water. Obviously if the City's water can be taken by a conduit from the reservoir itself, the effluent from the Hanging Moss and Purple Creek basin will not be a source of danger to users of the City's water. Estimates as to the cost of the conduit system were somewhat fragmentary. But W.P. Bridges, Sr., President of the Reservoir Commission, testified that Lester Engineering Company gave the Commission an estimate of the cost of this construction as slightly more than two million dollars. The estimated cost of the lagoon system, as proposed by the City Engineer, was in excess of four million dollars. While, with the use of a conduit, the City's water users would not be affected from this effluent, at the same time, the discharge from septic tanks, as Dr. Gray testified, could constitute a health hazard to those living in that area. Thus the collection and disposal of sewage by the City in some feasible way must be accepted as one of the benefits of inclusion within the corporate boundaries and, as such, will therefore redound to the health and well-being of the people of the area. (D) The City of Jackson and the Jackson Separate School District are two separate entities. Their boundaries do not coincide. However, a large majority of the people in the separate school district live within the corporate  limits, and the tax levies and debt loads of both entities fall upon them. So far as available funds are concerned, it appears that the City is in better financial shape to assume the expense of the present expansion than it was at the time of the 1949 expansion. Of course there has been a large increase in the cost of operation of both the City and the school district and in the bonded debt of both; but, at the same time, both have received considerable increases in revenue. People now demand more public services and, of course, in order to get what they demand, they must pay more taxes. The burden of taxation gets heavier and heavier year by year. But the City still maintains a high credit rating. Without going into any further detail, the Court is not in position to say that the chancellor, on this sharply disputed issue of fact, was in error in holding that the City is financially able to make the improvements and furnish the municipal services to which it has obligated itself. (E) Having weighed all of the evidence and the arguments, pro and con, the Court is of the opinion that the learned chancellor had substantial evidence on which to approve, ratify, and confirm as reasonable in all respects the expansion, as modified, and that he was not in error in holding that the inclusion of the territory in Area 13, as designated, was reasonable. From which it follows that the decree of the trial court must be, and it is, affirmed. Affirmed. All Justices concur, except Roberds, J., who took no part.