Court Opinion

ID: 9683373
Source: CourtListenerOpinion
Date Created: 2023-08-24 13:27:32.571767+00
Date Added: 2024-06-11T18:17:47.456139
License: Public Domain

John A. Fogleman, Justice, concurring. I concur because of the narrow grounds on which the opinion is based, i.e., (1) the fact that the North Little Rock City Council retained for itself the sole responsibility for rate making when it turned the operation of the electrical distribution system over to an independent commission, as authorized by statute; and (2) the fact that it is conceded that a major objective in the rate making ordinance was to insure a definite surplus or profit for definite municipal purposes. This is also reflected in the ordinance creating the commission by the provisions for the council filing documents evidencing the revenues necessary for general municipal purposes and for the council’s authority to make charges for allocation to the city’s general fund take any form it chooses. Rate making for a franchised utility has always been considered to be a legislative function. Lawrence v. Jones, 228 Ark. 1136, 313 S.W. 2d 228. There is really little difference in rate making for a municipally owned utility operated by an independent commission. When the council fixes rates for that commission, not as “just compensation” as provided by Ark. Stat. Ann. § 19-2318 (Repl. 1968) but for established municipal purposes, I must agree that it acts legislatively. It could have entrusted the matter of rates to the commission it created, “subject to such restrictions as may be prescribed in the ordinance creating said board pertaining to the expenditure of surplus utility revenues, establishment of rates for service, ***.” Ark. Stat. Ann. § 19-3935 (Repl. 1968). I suggest, however, that it is contemplated by our statutes that a municipally owned utility be operated for a profit. The term “just compensation” doesn’t mean that only the cost of operating and financing the system be uncovered. Just compensation means the market value of a product. It means full compensation. Arkansas State Highway Comm’n v. Stupenti, 222 Ark. 9, 257 S.W. 2d 37. As regards public utilities, it means a fair return on the value of the property. Black’s Law Dictionary (4th Ed.). It is significant that the provision for just compensation must be applied to franchised and municipally owned utilities alike. Statutes providing for use of the surplus income of a municipally owned utility are a clear indication of the intention of the Arkansas General Assembly that municipally owned utilities be operated at a profit and that those profits (surplus revenues) be devoted to numerous purposes. To illustrate, they may be used under various circumstances to pay bonded indebtedness of certain improvement districts. Ark. Stat. Ann. § 19-3901 (Repl. 1968); for off-street parking facilities, sanitation facilities, hospital facilities, public park buildings, improvements and facilities, auditoriums, convention centers, streets and roadways and airport improvement facilities. Ark. Stat. Ann. § 19-3931 (Repl. 1968). It seems quite possible that the rate making process for a municipally owned utility can be performed in a manner in which the commission controlling and operating it acts administratively. See Kruzich v. West Memphis Utility Commission, 257 Ark. 187, 515 S.W. 2d 71. If the council acts only in reviewing or approving or disapproving rates fixed by a commission, it might well be that it could be said to act quasi-judicially. If so, its action would be subject to judicial review on certiorari. See Ark. Stat. Ann. § 22-303 (Repl. 1962); Pine Bluff Water & Light Co. v. City of Pine Bluff, 62 Ark. 196, 35 S.W. 227; Williams v. Dent, 207 Ark. 440, 181 S.W. 2d 29; Jones v. Leighton, 200 Ark. 1015, 142 S.W. 2d 505; Veteran’s Taxicab Co. v. City of Ft. Smith, 213 Ark. 687, 212 S.W. 2d 341. It seems clear to me that the rates fixed, however established, would be subject to judicial review for reasonableness, even though it might be done in a manner not subject to referendum. See Delony v. Rucker, 227 Ark. 869, 302 S.W. 2d 287; City of Malvern v. Toung, 205 Ark. 886, 171 S.W. 2d 470; 12 McQuillan, Municipal Corporations 483, § 35.37a. I do not disagree with the majority opinion in any respect. I simply feel compelled to express these additional views.