Court Opinion

ID: 9536360
Source: CourtListenerOpinion
Date Created: 2023-08-07 06:58:22.74977+00
Date Added: 2024-06-11T14:54:08.137014
License: Public Domain

WOLFE, Justice
(concurring in the result).
I concur in the result that Chapter 24, Laws of Utah, is constitutional. Perhaps in a broad sense one may say that the Improvement District Act, Chapter 24, Laws of Utah 1949, is similar to the Metropolitan Water District Act, Chapter 110, Laws of Utah 1935. I think it is somewhat similar to the Water Conservancy Act, Chapter 99, Laws of Utah 1941; Chapter 11, Title 100, U. C. A. 1943. However, there is danger in comparing the structure of districts of different kinds in order to draw conclusions that one is constitutional or unconstitutional because the other was so held. Of course, there is common to the constitution of all districts permitted by law the fact that they are districts —that is, that they are confined to certain areas, and that the functioning of each is related to that area. That is why the word “district” always appears in their title. And common to the objective of forming districts is the principle of democratic cooperation by a majority in number or property value for the purpose to be subserved by the district. But the purposes of each may vary considerably and consequently the nature of the functions and the way they *292are constituted correspondingly vary according to the purposes to be effectuated. Its governing body and the procedure by which it may be constituted will likewise be fashioned to effectuate those purposes and functions.
The Metropolitan Water District Act, for instance, is for the purpose of permitting incorporated municipalities to cooperate for the development of water resources which the city or cities were not able to develop without outside aid or cooperation between or among cities, or perhaps to permit a development by a single city which it could not accomplish within its powers or resources.
The organization of Water Conservancy Districts was for the object of permitting individual owners to pool their resources for the purpose of developing water for the benefit of the owners of the lands included in the district. Drainage Districts are also organized for the purpose of pooling the resources of different owners of lands in a certain area with the object of draining and making those lands arable. Irrigation Districts are largely for the same purpose as Conservancy Districts, the latter differing from the former mainly in the magnitude of the projects needed to be constructed to accomplish in one, the major purpose of collecting and preserving water; in the other, the purpose mainly of transporting water to lands. In some of these districts, there is an overlapping of functions because necessity being the mother of invention, Acts are prompted by the particular necessities of certain areas whereas another area may require a more grandiose plan. The outstanding purpose common to all these laws is to permit communities and individuals to do things together to cooperate for their common benefit through organization established under law. It is simply an application of the pervasive principle of cooperation.
While the formation of districts have in common the idea of benefiting individuals or communities,- the type of bene*293fits may vary so greatly and the methods of accomplishing those benefits and of raising the money to pay for them differ so materially, that constitutional questions may be involved in some which are entirely absent in others. I mention these matters in order to register caution in attempting to assimilate different types of districts serving different purposes in order to use the ruling as to one type on constitutionality as a precedent for another type. In short, a law designed to establish districts for one purpose may raise constitutional questions not involved in a law designed to establish districts for another purpose although there may be elements common to each.
I had occasion to analyze the meaning and intent of Section 29, Article VI of our Constitution in my concurring opinion in the case of Lehi City v. Meiling, City Recorder, 87 Utah 237, 48 P. 2d 530. I do not believe I can now express my conclusions as regards the application of Section 29 of Article VI of our Constitution better than I did at that time. It was there said 87 Utah at page 274, 48 P. 2d at page 547:
“Having discussed the meaning of the term ‘special commission’ without resort to the extrinsic aid which the purposes which section 29 was intended to subserve might furnish, we now throw upon those words the illuminating light furnished by the objects which the section was designed to accomplish. One of. the purposes of section 29 appears to be to prevent the Legislature from interfering with the property and powers of municipal corporations through some other governmental agency specially set up for the purpose of doing that. Under the Constitution counties, cities, and towns are recognized as having a certain amount of local autonomy. The Constitution sought to leave [to] the Legislature the power of modifying, adding, or subtracting from the powers of municipal corporations; but such modification, addition, or subtraction of powers had to be general and could not be done by special legislation. That is to say, the Legislature could not pass an act specially directed at Salt Lake City or some other particular municipality. Section 29 was to prevent this being done indirectly by delegating to some commission certain powers which in their application might affect one or more cities specially. And, furthermore, to prevent all municipalities from being interfered with by outside agencies in the construction, management, or operation of their property. If any public agency, even including a city or town, were given the power to make, supervise, or interfere with a municipal improvement, municipal *294money, municipal property or effects of another city or town, it might be construed, to this extent, to be a ‘special commission.’ The latter term may therefore take content, not so much from its intrinsic meaning, as from the nature of the powers and duties which are given to it.”
Certainly the Improvement District Act did not In itself interfere nor was any entity which could be established under its terms empowered to interfere with the property or power of any municipality.
Further, as stated in the main opinion, the Improvement District Act was not set up as a special act. It was a general law usable by any community to which its provisions are applicable.
While it may be true that this type of district — an entity to accomplish certain purposes — may be set up to exercise within the limited area of the district certain functions which counties may have power to perform within the county but outside of the limits of incorporated cities and towns under Section 19 — 5—35, 43, 49, 50, 82 and 86, as-eounty functions, I am of the opinion that it is not within the prohibition of Section 29, Article VI of the Constitution reading:
“The Legislature shall not delegate to any special commission, private corporation or association, any power to make, supervise or interfere with any municipal improvement, money, property or effects, whether held in trust or otherwise, to levy taxes, to select a capítol site, or to perform any municipal functions.”
I am not convinced, however, that the county would have the duty or even the power to provide water or sewer systems to settlements within county government territory. The sections above mentioned deal mostly with sanitation and health and regulations connected therewith. Only Sec. 43 gives power to acquire rights in “reservoirs or storage companies or associations for the use of citizens of the county; may construct dams and canals for the storage and distribution of such waters.” (Italics mine.) But I have discovered no grant of power to build underground con*295duits for water distribution in a community nor to build sewer systems. These constructions are costly. The county government and its functions are generally designed to police rural, suburban and non-metropolitan territory. Farms or small isolated communities are largely dependent on well water and cesspools or septic tanks for culinary water and sewage disposal respectively.
Chapter 24, Laws of Utah 1949, provides that an improvement district may be constituted for an area within the county not included in any incorporated city or town and function in that area independently of the county through its own officers for the construction, purchase, condemnation or gift of (1) systems for the supply, treatment and disposition of water; and (2) systems for the collection, treatment and disposition of sewage. And it may be that the county itself under its powers over water, health and sanitation has the power to do the same things throughout the county area.
But it should be noted that in order to establish such district, the initiative comes not from property owners within the area but under Section 3 of Chapter 24, by resolution of the Board of County Commissioners. It is only after the district is constituted that three governors (three trustees) are elected with power to operate the systems and to manage them — Section 7, Chapter 24, Laws of Utah, 1949. But it is the Board of County Commissioners which initiates the procedure for the formation of the district and carries it through to conclusion. Until the Board of County Commissioners so moves by resolution, and after notice by advertisement, only then may owners representing more than half of the assessed value of the property in the area protest whereupon “the district should not be established.” Since, in this sense, the county retains full control of the decision as to whether there shall or shall not be a district, and then with a veto power by a majority in value of the *296ownership of real estate within the district, I am not sure whether the district is an arm of the county or a “separate arm of the government,” (if the main opinion means to use “government” as synonymous with “state”) or whether it is either, but I do not think that the question need be here determined. I rather think that it is not an arm of either but exercises the powers given it by the law as a separate and independent entity. The metaphor “arm of the state” rather implies an agency of the state and therefore may not accurately reflect the legal concept behind the relationship between the state and an entity erected by its permission or mandate. But the expression has been used to denote an entity exercising governmental functions which the state could exercise. In that sense, an Improvement District may be an arm of the state for limited purposes, but I prefer to say simply that it is a corporation created by an act of the state which permits the county to start the machinery in motion by which it may become a corporation with limited powers. In that sense, it may be an arm of the state. Be that as it may, I am convinced that it is an entity separate from county or state with certain limited independent powers of its own and that is all that need be said. Along that line, it should be furthermore noted that it is the duty of the Board of County Commissioners (but only after the creation of the district) upon petition of fifty owners of real property requesting an election for the object of determining whether bonds of the district shall be issued for the purposes stated in said petition, to adopt a resolution, fixing the time and place at which such petition shall be heard and to give notice of the same and to hold a hearing and to entertain objections and if the objections filed at said hearing are not sufficient to prevent the Board from proceeding, to proceed to call a bond election. But the decision as to whether the district shall or shall not be created lies with the Board of County Commissioners. It is only after creation that the Commissioners are required *297to act in regard to a bond issue on petition of fifty or more owners of real property. True, a certain area (determined in the resolution of the County Board) may be carved out of the non-corporated part of the county and thus in that sense the financial burden may be shifted from the county as a whole to a limited area granted that the county has the duty and power to construct water and sewer systems for unincorporated towns. But it should be noted in this regard that it would seem only fair that the local property owners who benefit from the improvements should pay for them instead of the property owners of the whole county. I shall have more to say about this hereafter.
The theory behind the act then being sound, it remains to consider whether the separate entity permitted by the Act to be set up is one that Sections 3 and 4 of Article XIV of the Constitution apply to.
An examination of the provisions of Chapter 24, Laws of Utah 1949, reveals that the bonds to be issued, if so specified in the election authorizing the bonds, may provide either that they be paid solely from revenues derived from charges or fees exacted for services rendered or by a levy of taxes on property of the district, or from both sources, Section 9. But in no case may the bonds be made an obligation of the County. They are payable only from revenues derived from service charges or as fees or are general obligations of the district payable out of revenues to be derived from taxation of property in the district depending upon the determination of the voters at the bond election.
In consequence, in no case is the county responsible for their payment. I must conclude, therefore, that the bonds are not the debt of the county but of the district only and that taxes levied against said district property for the payment of the principal of and interest on the bonds can be a lien only against real property in the district. It must follow, therefore, that only the taxpayers in the district are *298entitled to vote on the question of a bond issue and not the taxpayers of the whole county. More about this later. No election of the voters of the whole county need be held under the provisions of Section 3, Article XIV of our Constitution.
How is it as respects the debt limit provided for in Section 4 of Article XIV ? That limit of county indebtedness is 2% of the assessed value of property in the county and 4% for any “city, town, school district or other municipal corporation.” Section 4 of Article XIV further provides that
“any city of the first and second class when authorized as provided in Section three of this Article' {Article XIVJ, may be allowed to incur a larger indebtedness, not to exceed four per centum and any city of the third class, or town, and not to exceed eight per centum additional, for supplying such city or town with water, artificial lights or sewers, when the works for supplying such water, light and sewers, shall be owned and controlled by the municipality.”
In the case of Lehi City v. Meiling, supra, it was determined that a Metropolitan Water District was not a municipal corporation within the meaning of that phrase as used in Sections 3 and 4 of Article XIV, but an Improvement District is an entity under Chapter 24 with powers to cause taxes to be levied for the limited purposes of the district, power to sue and amenability to suit, to make contracts for the benefit of the district, to own and use an official seal and generally to “perform or cause to be performed all acts which in its [the trustees’] opinion are necessary or desirable in the conduct of its affairs and in the operation of the properties of the district.” Section 7, Powers of Trustees. Having all the attributes of a corporation of limited powers, it must be considered as such. But that is not to say that it is a municipal corporation as meant by Sections 3 and 4 of Article XIV of our Constitution.
In order to determine the applicability of Sections 3 and 4 of Article XIV of the Constitution, it is necessary to determine whether an Improvement District carved out of non-incorporated county territory is a subdivision of the *299county as meant by that term as used in Section 3 of Article XIV.
Mr. Justice Folland in the case of Lehi City v. Meiling, City Recorder, 87 Utah 237, at pages 256 and 257, 48 P.2d 530, speaking for the court, discussed at some length the nature of the entity known as a “metropolitan water district” in reference to Sections 3 and 4 of Article XIV of the Constitution. Our Metropolitan Water District Act permitted a maximum debt limit of 10% of the value of the taxable property of the district. It was urged there that the 10% statutory limitation imposed on the Metropolitan Water District Was in excess of the Constitutional debt limit specified — Section 4 of Article XIV. This court speaking through Mr. Justice Folland held:
“We are satisfied the Metropolitan Water district is not a subdivision of either a city, town, or county within the meaning of the word ‘subdivision’ as used in the Constitution.”
While an Improvement District and a Metropolitan Water District are different types of entities, I believe the reasoning of the court as expounded by Mr. Justice Folland in connection with a metropolitan water district is equally applicable to an improvement district on the question of whether it is an entity subject to the provisions of Sections 3 and 4 of Article XIV, although the districts permitted under that Act were not necessarily confined to a single county. Hence, the question of a part of a county carved out as a district exercising county functions did not arise.
At the time of the adoption of the constitution, the governmental and political divisions were simple. I doubt if districts, as we now know them, for local and particular benefits were in the contemplation of the drafters of our Constitution. An improvement district, for instance, is neither flesh, fish nor fowl. It is a partial city or town — a quasi municipality — in that it is set up to attain certain limited benefits for the district to be served, which benefits *300are those which an incorporated city or town could, within their debt limitations, accomplish. They are certainly part of the functions a city or town is eminently fitted to exercise and for which functions they are in part constituted. Back of the legislative acts which made possible the establishment of irrigation, drainage, improvement and mosquito abatement districts and even metropolitan water and water conservancy districts, lay the principle that they who receive the benefits should pay for them. Where the benefits are local, the locality which they are to serve should be given the opportunity to determine by election whether the property owners therein desire the benefits in contemplation and if they elect to have them, the obligation to pay for the bond issues required to construct them should be the obligation of the property owners of the district. Bond issues are a method of borrowing from a number of people to pay for improvements presently to be enjoyed but ultimately those borrowings must be paid either by taxes imposed or by revenues derived from the improvements or both, and it is only fair and equitable that the taxation be laid against those who benefit just as the charges and fees for the services rendered are charged against those who enjoy those services.
It would be very unreasonable to require taxpayers of the whole county to vote for an improvement which was to be confined to and enjoyed by the property owners of a small district. In fact, if the taxpayers of the whole county had to pay for the benefits received by a small part of a county, it is doubtful whether a favorable vote could ever be had. And it would be a most cumbersome method of going about furnishing local communities with improvements if each time the whole '•county had to vote for the local improvements for the benefit of a small part of the county.
*301True, the same thing might be accomplished if the inhabitants of the community would, instead of causing an improvement district to be established, incorporate as a city or town as the case might be. In that event, the territory encompassing the city or town would by incorporation be taken out of the county. The Improvement District Act accomplished the same thing as to water and sewer systems by lifting from the county the necessity of furnishing water and sewer facilities, if indeed it ever had that duty, but leaving with the county its ordinary functions in the district area relating to health, policing, etc. And up to the time the improvement district was created, the county had control of the situation because, as above noted, it could refuse to move in the matter of initiating the formation of the district.
I find nothing in the Constitution which prohibits the establishment of local entities in the county designed to confer local benefits on the property owners therein and to provide means to raise funds for their construction from revenue derived from charges for the water and sewer facilities and to permit taxation of the local property receiving the benefits from the improvements. There is nothing in the Constitution which prohibits the legislature from passing a law which permits the creation of instru-mentalities designed to perform functions which the county itself might perform, at least if they are local in scope, and this whether we consider that instrumentality an arm of the county or not, and a fortiori if the entity created is considered an arm of the county.
I conclude, therefore, that Sections 3 and 4 of Article XIV of our Constitution are not applicable to improvement districts and therefore the district debt limit is as specified in Section 8 of Chapter 24 under the sub-title “Proceedings on Bond Issue,” to wit, 12% of the value of the taxable property of the district. Any of the debt limits *302specified in Section 4 of Article XIV of the Constitution are not applicable.
I have given considerable attention to this matter because this is the first time this Act has been before this court for determination of its constitutionality. What we really are asked to do in these cases involving bond issues is to give a declaratory judgment as to validity and constitutionality. The issues should be, if possible, truly adversarial and not a friendly proceeding on fictitious or artificially made issues.
LATIMER, J., concurs in opinion of WOLFE, J.