Court Opinion

ID: 9534690
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:42:07.808911+00
Date Added: 2024-06-11T13:31:06.929338
License: Public Domain

PETERS, P. J.
I dissent. I am of the opinion that the Charter of the City and County of San Francisco expressly prohibits the expenditure of moneys from the Hetch Hetchy fund for the purposes here involved.
The basic facts are as follows: On December 1, 1941, the board of supervisors purported by ordinance to appropriate $10,000 out of the “unappropriated balance in the Hetch Hetchy Power Division” to provide funds to defray the expenses of the mayor, city attorney, representatives of the public utilities commission and two members of the board of supervisors for a trip to Washington, D. C., so that such persons could appear before a congressional committee to urge the adoption of an amendment to the so-called Raker Act, which amendment was deemed vital to the interests of the city by a majority of the board. The proposed amendment would have authorized the utility to dispose of its power in a manner prohibited by existing law. The sole question involved is whether the board of supervisors had power to appropriate money from that fund for that purpose.
I agree with the majority opinion insofar as it holds that where a charter does not prohibit or expressly permits such expenditures that such expenditures do not violate public policy. There can be no doubt that under such circumstances governmental agencies may properly send their representatives to Washington, D. C., to appear before congressional committees to urge, in a proper manner, the adoption or defeat of legislation which the governing body deems necessary for the protection of the governmental agency involved. In my opinion there can be no reasonable doubt but that the city of San Francisco lawfully could have appropriated *301money from its general fund for this purpose. The real question here presented is not whether the challenged power would exist in the absence of express prohibition, but whether the charter of San Francisco prohibits the use of Hetch Hetchy funds for the purpose here under discussion. This is purely a question of interpretation. If the people of San Francisco, in an attempt to prevent dissipation of the utility’s funds, have seen fit to rigidly prohibit the expenditure of the utility’s funds except for certain designated purposes, and if the purpose here involved does not fall within the permitted categories, the board of supervisors simply lacks power to expend the money for the challenged purpose. In my opinion, a reading of the pertinent provisions of the charter demonstrates to a certainty that the charter prohibits appropriations from the Hetch Hetchy fund for the purpose here involved.
The applicable sections of the charter are quoted in the majority opinion, and need not be again quoted in their entirety in this dissent. Section 127 is the basic section. It requires all receipts from each utility, of which Hetch Hetchy is one, to be deposited by the public utilities commission in the city and county treasury “and maintained in a separate fund for each such utility.” The section then providés that appropriations from such separate funds shall be made for certain designated purposes. Subdivision (a) provides that money may be appropriated from the fund for “operating expenses” and certain other expenses not here involved. Subdivisions (b), (c), (d) and (e) provide for appropriations from that fund for certain other specific purposes not here involved, and subdivision (f) provides “for a surplus fund.” Section 129 provides that when the surplus fund reaches a certain size a portion thereof shall be transferred to the general fund. The majority opinion, after holding that the purpose here involved is a proper public purpose, holds that, under the power to appropriate money from the fund for “operating expenses,” the board has power to appropriate money for the purpose of sending representatives of the commission and of the city and county to Washington to urge the adoption of the measure then under consideration.
The basic theory of the charter is that funds earned by each utility shall be kept in a separate fund, and that no money shall be taken therefrom except for the purposes speei*302fied. The funds of the utility are not to be used to pay the expenses of the city and county generally, nor are such funds to be dissipated because, forsooth, the majority of the board of supervisors decide that the expenditure is reasonably necessary for the protection of the city and county or of the utility. If the phrase “operating expenses” is to be “interpreted” into a general catch-all that will authorize all expenditures deemed necessary by a majority of the board to protect the utility, the entire protection of the utility’s funds set up by the charter will be lost.
The precise problem here involved has already been passed upon by the Supreme Court on at least two occasions. In both cases the decisions were adverse to respondents. Mines v. Del Valle, 201 Cal. 273 [257 P. 530], is the leading case. That tease involved the interpretation of the charter of the city of Los Angeles. That charter conferred upon the board of public service commissioners power “to construct, operate, maintain and extend” power plants; required the funds of the utility to be deposited in the city treasury in a separate fund, and provided that such moneys could be expended, among other things, “For the necessary expense of conducting, operating and maintaining, and extending the business of said department pertaining to electric power, of the electric power works, plants, systems and equipments and of making all current and ordinary extensions, betterments and repairs.” The city operated a public utility that supplied electricity to some of its inhabitants, but the plant was too small to supply all the electric energy needed, and a considerable quantity of electric energy was purchased from a competing company. The city council determined to submit to the electors of the city a bond issue for the purpose of securing money to extend the system. The bond issue was contested. The governing board of the utility determined that the opponents of the measure were circulating (p. 278) “misleading, deceptive and untruthful reports against said bonds ... in the form of circulars, newspaper articles and advertisements.” The board thereupon expended from the utility’s funds some $12,000 in payment of claims for the cost of advertising the merits of the bond issue in newspapers, and for the cost of cards, banners, windshield stickers, handbills, postal cards, etc. This was done in an attempt to urge the voters to approve the bond issue and to offset what the board believed was the misleading and untruthful reports of *303the opponents of the issue. A taxpayer challenged these payments. The defense of the city was that the extension of the electric system was necessary to the best interests of the city; that the opponents were circulating false reports in an attempt to defeat the bond issue; that in order to inform the voters of the merits of the proposal it was necessary to incur the expenditures. The trial court granted the taxpayer judgment on the pleadings, holding that such expenditures from the utility’s funds could not be justified under the power to “extend” the system. It was urged that the power to extend the system included the power to do all things reasonably necessary to execute that power. The court held (p. 282) that the “vice of this argument is in assuming that the raising of the necessary funds is any part of the power to extend said electrical system. We may all concede that the system cannot be extended without funds with which to carry on such extension. But the raising of the money to extend said system is one thing and the extension of it is an entirely different and distinct power. The provisions of the charter giving to the board of public service commissioners power to extend the electrical plants and works of said city and to expend the funds in the power fund for the purpose of extending said public utility in our opinion refer simply to the physical management of the same and cannot be enlarged to include another and distinct power, that of raising money either directly or indirectly for the purpose of . . . extending the business” of the utility. The court then held that the expenditures could not be justified by the argument that they were necessary to correct the misinformation disseminated by the opponents of the bond issue. The problem was purely one of construing the provisions of the charter. At page 288 it is stated: “It is sufficient to show that the authority claimed by the board of public service commissioners to make such expenditures was not given to them by any express provisions of the charter, nor can it be implied from any of the terms thereof. This being so, neither said board nor this court nor any other court can invest said board with the authority denied it by the charter, no matter how desirable or necessary it may be made to appear that said board should be invested with such authority.”
The other case in which the precise question here involved has been decided adversely to the position taken in the majority opinion is Mobley v. Board of Public Works, 44 *304Cal.App. 167 [186 P. 412]. That case involved the old charter of San Francisco under which the board of supervisors were authorized to make appropriations from the receipts of a public utility for the purpose of “extensions and improvements.” The city operated a municipal railway system. The board sought to appropriate from the municipal railway fund a sum of money to be expended in investigating the availability of a competing private railway for purchase by the city. The District Court of Appeal affirmed a decision in favor of a taxpayer who had brought an action to enjoin the expenditure. The Supreme Court, in denying a hearing, stated (44 Cal.App. 167 at p. 173): “Without regard to any other question discussed in the opinion of the district court of appeal, we are satisfied that the charter of San Francisco, as now written, does not authorize the payment of money from the funds of the municipal railway system for the purpose of investigating the condition and availability of a part or the whole of another street railway with a view to its purchase. The purposes for which expenditures from such fund can be made are carefully specified in section 16, article XII, of the charter, which, we think, excludes any such expenditure as here proposed. Such an investigation may not fairly be held to constitute an ‘extension or improvement’ of the municipal system.”
These cases are direct and controlling authority on the issue presented in the instant case. In the Mines case, supra, the Supreme Court held that power to expend money to extend the utility did not include the power to expend money to induce the electorate to extend the utility by approving a bond issue. In the Mobley case it was held that power to expend money for extensions and improvements did not include the power to expend money for the purpose of investigating the merits of a proposed extension. In our case, the power to expend money for “operating expenses” cannot be interpreted to mean that the board has power to expend the utility’s funds to induce the Congress to extend the utility by approving an amendment to the Raker Act so as to permit the utility to extend its system by disposing of its electric energy in a manner then prohibited.
The Mines and Mobley cases, supra, constitute binding and conclusive adjudications on the precise point here involved. If the power to extend the system does not include the power to expend money to advocate the extension, or, if the power *305to make “extensions and improvements” does not include the power to expend money to investigate the propriety of an extension, how can the power to expend money for “operating expenses” be interpreted to include the power to advocate an extension of the system? It must be remembered that the purpose of the committee was to advocate a specific amendment to the Raker Act by which the utility would be permitted to operate in a manner then prohibited by federal law. That is just as surely an attempt to “extend” the system as would be the purchase of a competing utility. It makes no difference legally that the utility here had already illegally “extended” its system by entering into the prohibited contract. Certainly there can be no difference so far as the question of power is concerned between seeking approval of an extension in the first instance, and seeking ratification of such extension, where the extension was illegal when made, after it becomes a completed fact. The theory of the two cases under discussion was simply that the charter provisions there under consideration did not authorize such expenditures.
The majority opinion apparently holds that there is some distinction between an attempt to convince the voters of the propriety of an extension, and an attempt to convince the Legislature or one of its committees of the propriety of such extension. In the Mines case, supra, the desired extension had to be approved by the voters. In the present base approval for the desired extension had to be secured from the Congress. Certainly if expenditures to convince the voters, the repository of legislative power, was improper, expenditures to convince a congressional committee are equally improper.
The majority opinion cites Crawford v. Imperial Irrigation District, 200 Cal. 318 [253 P. 725], in support of its conclusions, and implies that in some way that case qualifies the holding of the Mines ease. All that the Crawford case held was that the employment of persons to influence legislation, in a proper way, is not against public policy, and that there was no limitation in the statutes regulating irrigation districts which prohibited the expenditure of money for this purpose. With that holding I heartily agree. The point is that in the present case the charter prohibits such expenditures from this fund.
The majority place considerable reliance upon the decision *306in O’Connell v. City and County of San Francisco, 204 Cal. 1 [266 P. 1118]. A reading of that opinion discloses that it is not authority for any rule of law. That opinion is five and one-half lines long. It simply holds that the plaintiff’s complaint failed to state a cause of action, and that the demurrer thereto was properly sustained. What the complaint alleged is not disclosed, nor are we told why the contents of the undisclosed allegations were not sufficient. That case is not authority for any point of law. (7 Cal.Jur. p. 641, § 46.) The opinion cannot be bolstered by a reference to the record. There were many reasons disclosed in the record why the complaint therein may not have stated a cause of action, and this court is not entitled to engage in conjecture, surmise or guess as to the basis of that opinion. We know that the Supreme Court in that case did not mention the Mines or Mobley cases, supra, and we certainly are entitled to believe that that court did not intend, in such cavalier fashion, to overrule those cases.
In my opinion, the record demonstrating thax the proposed expenditures are prohibited, the judgment should be reversed.
Appellant’s petition for a hearing by the Supreme Court was denied March 6, 1944. Edmonds, J., Carter, J., and Traynor, J., voted for a hearing.