Court Opinion

ID: 9846730
Source: CourtListenerOpinion
Date Created: 2023-09-24 03:47:10.119762+00
Date Added: 2024-06-11T09:19:46.646884
License: Public Domain

Justice Exum
dissenting.
Both the majority and I agree that G.S. 160A-314(a) authorizes a municipality to increase rates, not for services to be furnished, but only for services which are being furnished. I disagree with the majority’s conclusion that this proposition does not govern disposition of the case.
It cannot be questioned that the town’s increased sewer rates contested here were made necessary by the construction of a new sewage disposal plant designed to replace, not to expand, its old existing system. The uncontested findings of the trial judge were:
“3. Prior to July 1, 1979, it became necessary for the Plaintiff Town to improve and update its water and sewer system, particularly its waste water disposal facilities to meet federal and state guidelines and requirements and this necessitated a considerable outlay of capital.
*2554. Construction was commenced prior to July 1, 1979, on a new waste water treatment facility which was not completed and placed in operation until December, 1979.
5. The plaintiff increased its water and sewer rates to help pay for the new water treatment facility. The rates were increased effective July 1, 1979, and the defendant was sent a bill for $414.00 covering the period from June 25th through August 31, 1979.” (Emphasis supplied.)
The majority argues that because the town would have been authorized to increase its water and sewer rates in any event notwithstanding the construction of a new plant, the limitation in G.S. 160A-314(a) has no application. Thus the majority, in effect, decides a case that is not before the Court. This increase in this case, everyone concedes, was due solely to anticipated new costs relative to the operation of the new plant. But for the new plant, there would have been no increase. The question for decision is therefore whether the increased charges were for services being furnished within the meaning of the statute.
The problem in the case stems from the ambiguity in the emphasized portions of Finding 5. If this finding means that the increased rates were used to finance construction of the new plant, as the Court of Appeals’ majority thought, then I would have less difficulty agreeing with that court’s majority that the increased rates were for services being furnished within the meaning of the statute as of 1 July 1979 when construction was under way. The question would be more difficult, though, than the one actually before us.
On oral argument defendant contended strongly that the increased charges were not for plant construction costs. They were instead for the purposes of maintaining the new plant and creating a capital reserve fund which would be sufficient to replace the plant when it became necessary to do so because of anticipated ordinary wear and tear. Plaintiff’s counsel was less sure about this fact. Evidence in the record seems to support defendant’s view of the facts. The town’s mayor testified that in anticipation of constructing the new sewage disposal facility the town resolved to increase “its water and sewer rates as may be required to fund the operating and maintenance costs, capital reserve costs, and other applicable costs of its water and sewer *256systems.” The town also resolved to apply for state and federal grants to construct the facility and to finance itself whatever construction costs were not covered by the grants. According to the mayor, the new plant cost “approximately” $1,100,000 to build. The town received federal and state grants totaling $962,000. It then obtained authorization to issue sanitary sewer bonds and bond anticipation notes to a maximum of $250,000. As of the date of trial, 20 March 1980, the mayor testified that bond anticipation note proceeds had amounted to $137,500. It is true that at one point in his testimony the mayor mentioned “construction” as being one of the purposes for the increased rates. The figures he gave, however, seem to me to establish that the increased rates were actually for maintenance and a capital reserve fund.
Given this evidence, Finding 5 should be interpreted to mean that plaintiff increased its water and sewer rates to pay for maintaining “the new water treatment facility” and to provide a capital reserve fund for eventually replacing the plant. If Finding 5 is so interpreted, then I am satisfied the town had no statutory authority to increase its water and sewer rates until the new plant actually went into service in December 1979. The moment at which the plant went on line marks the moment at which the town was actually furnishing the services for which the increased water and sewer charges were being collected. For it is not until this moment that costs relating to maintaining the plant and creating a capital reserve fund for the plant’s replacement due to normal wear and tear begin to be incurred.
For these reasons, I respectfully dissent and vote to reverse the decision of the Court of Appeals.