Court Opinion

ID: 9588133
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:30:29.630804+00
Date Added: 2024-06-11T13:38:01.575369
License: Public Domain

*676CARRICO, J.,
dissenting.
While I agree with the views expressed by Mr. Justice Poff in his separate opinion, I would add another basis for disagreement with the majority.
As pointed out in the majority opinion, the legislation under review imposes “strict limitations” upon the power of the Virginia Housing Development Authority to finance projects that provide housing for persons in upper income brackets. The Authority may finance upper income housing only in housing rehabilitation districts or economically mixed projects. More important to the problem I address, only a local governing body may create a housing rehabilitation district or declare an economically mixed project and then only after receipt of a favorable report of a board composed principally of local bankers. Finally, by its terms, the legislation under review relates to the creation of housing rehabilitation districts or the declaration of economically mixed projects solely in the City of Portsmouth. The proceeds of the bonds proposed to be issued, therefore, can be used to finance housing projects only in that city.
After this case was argued, we discovered that the record did not contain any resolution of the council of the City of Portsmouth creating a housing rehabilitation district or declaring an economically mixed project in the city. Accordingly, we called upon counsel to comment in writing upon the absence of the local resolution, and we later ordered oral argument on the point.
Conceding that no local resolution had been adopted, counsel for both sides took the position that the adoption of such a resolution was not a prerequisite to the issuance of the bonds in question. The legislation under review, counsel stated, does not require the creation of a housing rehabilitation district or the declaration of an economically mixed project prior to the issuance of bonds, and the bond resolution adopted by the Authority does not limit the use of the proceeds of the sale of bonds to any particular project or projects. As counsel perceived the situation, if the bonds are held valid by this court but not sold because of the lack of a qualifying project, the bonds would never be issued; or, if the bonds were issued and sold but the proceeds not expended because no project then qualified, *677the proceeds would be used to redeem the bonds or held until a qualified project presented itself.
In counsel’s view, the absence of a resolution creating a housing rehabilitation district or declaring an economically mixed project presents an “application of proceeds” issue, to be decided later, rather than an “authorization or issuance of the bonds” question, which must be resolved now. Consequently, counsel maintained, the nonexistence of the local enabling resolution is a matter “beyond the scope of inquiry in this case.”
Apparently, this view has been adopted by the majority. In note 7 of its opinion, the majority disclaims any intention to adjudicate “collateral questions which could conceivably be raised in the future related to the subsequent application of bond proceeds.”
I disagree both with the majority and with counsel. This proceeding was brought pursuant to Code §§ 15.1-213 to -221, whose provisions “apply to all suits, actions and proceedings of whatever nature involving the validity of bonds of any political subdivision.” Code § 15.1-213. Under § 15.1-214, the court is required to determine, inter alia, “the legality of all proceedings theretofore taken in connection with the authorization or issuance of such bonds.” I comprehend that the mandate to determine the validity of bonds from the standpoint of “proceedings theretofore taken” necessarily includes investigation into all preissuance steps, whether taken or omitted, which might affect the validity of the bonds. One preissuance requirement is that the local governing body by resolution shall create a housing rehabilitation district or declare an economically mixed project.
It is indisputable that the legislation under review applies only to the City of Portsmouth and that the proceeds of the bonds proposed to be issued pursuant thereto can be used only to finance construction in a housing rehabilitation district or an economically mixed project created or declared by the council of that city. I believe, therefore, that the adoption of an enabling resolution by the City Council of Portsmouth is a condition precedent to the Authority’s issuance of the bonds in question and, hence, to the establishment of the validity of the bonds themselves.
Consequently, I reject the notion that the lack of a local enabling resolution is beyond the scope of inquiry in this case and that the point should be left for later determination. Indeed, a party intending to rely upon the absence of the necessary local resolution would omit at his peril to raise the point in á bond validation proceeding. *678Under Code § 15.1-220, a final decree validating bonds is “forever binding and conclusive” not only as to all matters actually adjudicated but also as to any point “which might have been presented.” Such a decree also constitutes a permanent injunction against the institution of any action or proceeding contesting any matter adjudicated or “which might have been called in question in [the bond validation] proceedings.”
The absence of a local enabling resolution is fatal to the validity of the bonds proposed to be issued in this case. Thus, I would reverse the decree of the trial court and enter a final decree declaring the proposed issue invalid.