Court Opinion

ID: 5145274
Source: CourtListenerOpinion
Date Created: 2022-01-02 01:25:24.576358+00
Date Added: 2024-06-11T08:24:43.972134
License: Public Domain

GIBSON, J.
(dissenting). I am unable to agree with the majority of my associates that this court should place its stamp of approval on the $3,000,000 of bonds to be issued purportedly for the acquisition and erection of a water supply system and for improving and extending the power and heating plant system of the Oklahoma Agricultural and Mechanical College at Stillwater.
No words can sufficiently describe the nature and purpose of the bond proceedings and at the same time conceal the fact that the water supply system is being acquired and erected to supply the needs of the city of Stillwater as well as those of the College.
In fact, the bond proceedings attempt no such concealment for therein is contained a report from Colonal Donnell in which the reasons for the College undertaking the expansion are disclosed, and it is further stated:
“After this decision on the part of the College, the Commissioners of the City of Stillwater realized that it would be to our mutual advantage for them to become a party to the project and to this end a contract has been arranged which will supply income as indicated in Paragraph 4 of the contract, Exhibit ‘E’,”
And the engineer’s report contains the following:.
‘5. The proposed contract for sale of water to the City of Stillwater is attached as Exhibit ‘E’.
“Features of the contract are that the City agrees to pay the College a minimum of $76,000 annually, that water will be delivered to the City at the nearest point in their distribution system, that maximum demand by the City shall not exceed 6,000,000 gallons per day, and that the term of the contract is 25 years with renewal provisions. . . .
“It is expected that the City will shut down their present plant, keeping it intact for emergencies, as with the minimum payment required it will be most economical for the City to purchase all of its treated water. ...”
Incidentally, the cost of this utility, which is to be constructed sufficient in size and power to enable it to supply the water needs of the city of Stillwater for a period of 25 years “with renewal provisions”, is to be defrayed in part out of revenues derived from
“(a) A student fee to be charged and collected from every student in attendance at the Oklahoma Agricultural and Mechanical College at the regular and summer sessions of the College, for the use or availability of the services and facilities to be afforded by the system, in such amount per student as will make the proceeds thereof fully sufficient to carry out all of the requirements of this resolution.
“(b) All other revenues . . . including the revenue to be derived from such student fees (supplemental and in addition to the fees described in paragraph (a) above) as may at any time be necessary to be imposed to pay maintenance and operation expenses as hereinafter provided. . . .”
It may be conceded that a student fee may be imposed for the erection of a facility for the use and enjoyment of such student, but never before has it been held that a student fee may be imposed for the part payment of the cost of construction of a utility erected for the purpose of supplying the water needs of the students and in addition the water needs of a city for a period of 25 years with renewal privileges.
In my opinion the wisdom and desirability of the proposed enterprise, considered from the standpoint of the evident advantages to be enjoyed by the College and the city of Stillwater as the beneficiaries, can afford no justification for the bond issue unless such enterprise can and is to be accomplished within the limits of the authority granted the Board of Regents under the law. And, such being true, the power of this court to approve and thereby give finality to any question *59concerning the validity of the bonds can be properly exercised only where it appears to the court that the authority of the Board to act as it proposes to do is manifest.
An express limitation upon the authority of the Board appears in the following words of the statutes (Tit. 70, O. S. A. 1941, Supp. 1947 §2071):
“(provided, that such Boards of Regents shall, not construct or acquire, for their respective institutions, such utility plants or systems whose capacity is in excess of the present or reasonably contemplated future needs of such institutions).”
The majority opinion states that under said section 2071 the Board of Regents may acquire utilities “for the comfort, convenience and welfare of the students.” With that I agree, but that section does not authorize the erection of a utility to furnish services to an independent municipality for 25 years with renewal privileges.
It is obvious from the papers on file herein that the capacity of the proposed water system is not deemed by the Board to be not in excess of the present and contemplated future needs of the College. In the application for approval of the bonds, filed on its behalf, is the following statement:
“Applicant considers these facts as establishing the water needs of the Oklahoma Agricultural and Mechanical College as being no less than sufficient water for the entire college — City Community.”
This language alone is sufficient to negative any contention that the needs of the College only are made the basis for the capacity of the utility to be provided unless it can be concluded that the city, under the circumstances, is, in substance, an adjunct of the College. Such conclusion could not obtain by reason of the facts and, a thing which is equally important, that the Board entertained no such thought is reflected by the further fact it is contemplated that the service to be provided is to be sold to the city as a separate entity to be by it distributed to its customers.
The authority of the College to sell its surplus is not questioned but its power in such respect is limited to what in terms of the statute is a temporary surplus, not one designed to continue for 25 years or longer. The surplus contemplated by the statute can be none other than that afforded by the excess of capacity for future needs over that required for present needs of the College. Such is not the situation here where the College needs are expressly combined with the city needs for 25 years or longer in determining the size of the bond issue and the capacity of the water system. In such circumstances the product of the utility over and above the needs of the College is not a surplus, but the over-supply is designedly produced so that it may be sold to the city of Stillwater. Furthermore, the “envisioned” increase in the enrollment at the College has not materialized, if information- said to have been released by the College is correct.
Conceding that the Board is authorized to determine the needs of the A. & M. College for a water system, it does not follow that the Board has any authority to determine the water needs of the city of Stillwater, which needs the Board intends to supply.
The resolution of the Board discloses that the bond issue of $3,000,000 is for the purpose of the “acquisition of a new water supply system . . . and improving and extending the power and heating plant and system . . .”
Among the papers submitted to us is a “Report on Economic Features of Proposed Water Supply System for Oklahoma A. & M. College,” which is said in the majority opinion to have been prepared by a “well known engineer of recognized high professional standing.” Upon examination I find the report relates to the water system alone. Nowhere do I find any evidence of the need for “improving and extending the power and heating plant and system.”
*60It is true that the resolution recites that “it has been determined” that it is necessary to improve and extend the power and heating system, but we are not advised upon what evidence, if any, such finding of the ultimate fact of the need was made. To approve the bonds in such circumstances is but to give the proceedings a “rubber stamp” approval so that the bonds issued thereunder will not be subject to attack thereafter.
We are not advised as to what portion of the $3,000,000 is to be expended for a water system and what part for the power and heating system. Nor was the public advised as to how and in what amounts this huge sum of money is to be expended by the notice which was published. This is an ex parte proceeding. I think we should be informed before we act, especially in view of the expressed intention of the Board to erect for the A. & M. College a utility which is private in name but public in fact. It will be relieved, however, of the controls and restrictions imposed by law upon other public utilities.
I do not impugn the motives and intentions of the members of the Board, for I know them to be able, honest and honorable men, but under the majority’s construction of the act under which the bonds in question are to be issued, there are no bars or restraints left for controlling others who may not be so well intentioned.
The resolution also discloses that it is anticipated that there will be a surplus of revenue received from the business of operating the utilities over and above annual needs for the principal and interest of the bonds and that such surplus may be “devoted to and used for any lawful purpose.”
By approving the bonds the majority opinion of necessity approves the proceedings under which the bonds were issued, including the provision for the use of surplus revenue, which is so broad and indefinite in meaning that it should never be approved. The majority opinion says that the bonds are approved by this court on the theory that the revenue from the utilities involved will be devoted to the uses specified in 70 O. S. Supp. 1947, §2076. That is a commendable position, but the court can only approve or disapprove the bonds as presented. We cannot add to or take from the bond proceedings. If the Board has'provided for the use of the revenue in a way not authorized by the statute under which the revenue accrues, it has acted beyond its authority and the bonds should be disapproved.
I am of the opinion that the Board of Regents has not acted within the authority granted it by statute and I therefore respectfully dissent.