Court Opinion

ID: 5045072
Source: CourtListenerOpinion
Date Created: 2021-10-01 07:13:05.116382+00
Date Added: 2024-06-11T08:18:44.621982
License: Public Domain

JONES, Justice
(dissenting).
In my view the majority opinion is based on neither the law nor the facts.
The city of Somerset has owned and operated a municipal gas system since 1951. The city has been able to furnish natural gas to its residents, businesses and industries. Now, the city is caught in the “energy crisis.” Reduction of natural gas supplies has made it necessary for the city to allocate gas to its customers. Gas supplies to major industries have been drastically reduced. New industries, including an important health-care facility of the Commonwealth, have been refused the service of natural gas. The exigent circumstances which give rise to the need for additional supplies of natural gas place Somerset in the words of a mountain colloquialism, “between the crib loft and a tight place.”
The only available supply of natural gas for the city of Somerset is located in Leslie County, some 70 miles from Somerset. The only way this supply can be brought to Somerset is by construction of a pipeline approximately 22 miles in length to another gas line. To finance that construction, Somerset proposes to issue and sell revenue bonds privately and without any prior public advertisement.
Somerset is a city of the 3rd class. “The legislative body of any city of the 3rd class may, by ordinance, provide the city and its inhabitants with water, light, power, heat, and telephone service, by contract or by *381works of its own, located either within or beyond the boundaries of the city; make regulations for the management thereof, and fix and regulate the prices to private consumers and customers.” KRS 96.170.
Somerset of necessity adopted a plan to sell bonds to a limited number of investors within the meaning of SEC regulations. The trial court, in detailed and concise findings of fact and conclusions of law, held that the proposed bonds to be sold would take on some of the aspects of industrial building revenue bonds as authorized by Chapter 103 of the Kentucky Revised Statutes.
The majority opinion is bottomed on statutes that are not pertinent to the issues presented in this case. The majority opinion contains this broad statement, “For many years the general policy of the Commonwealth has been to require the offering of municipal bonds at a publicly advertised competitive sale.” That policy is predicated upon the stale authority of Eagle v. City of Corbin, 275 Ky. 808, 122 S.W.2d 798 (1938). The principles enumerated in Eagle, supra, are distinguishable from those presented in the case at bar.
The Legislature has relieved governmental agencies from the requirements that their bonds be sold at a publicly advertised sale. Examples of agencies so exempted are the Capitol Plaza Authority, the Turnpike Authority, and the County Turnpike Authority. These agencies are authorized by the Legislature to sell revenue bonds either at public or private sales. The precedent set by the Legislature is of sufficient authority to justify this court in modifying its previously announced public policy of requiring the sales of municipal bonds to be publicly advertised. The result of the majority opinion this day rendered is a cruel and harsh blow to the hopes and aspirations of Somerset and its citizens. I respectfully dissent from the majority opinion and I would affirm the judgment.