Court Opinion

ID: 4568566
Source: CourtListenerOpinion
Date Created: 2020-09-22 23:06:23.738718+00
Date Added: 2024-06-11T08:46:36.249010
License: Public Domain

RENDERED: SEPTEMBER 11, 2020; 10:00 A.M.
                     TO BE PUBLISHED

           Commonwealth of Kentucky
                   Court of Appeals
                    NO. 2019-CA-001247-MR

CITY OF STANFORD, KENTUCKY, ACTING
THROUGH THE STANFORD WATER AND
SEWER COMMISSION; CITY OF HUSTONVILLE,
KENTUCKY; AND CITY OF CRAB ORCHARD,
KENTUCKY                                         APPELLANTS

            APPEAL FROM LINCOLN CIRCUIT COURT
v.         HONORABLE JEFFREY T. BURDETTE, JUDGE
                   ACTION NO. 18-CI-00062

LINCOLN COUNTY, KENTUCKY; JAMES
WOODS ADAMS, JR., IN HIS OFFICIAL
CAPACITY AS JUDGE/EXECUTIVE AND
MEMBER OF THE FISCAL COURT OF
LINCOLN COUNTY, KENTUCKY; AND LONNIE
PRUITT, DAVID FAULKNER, JOHNNIE
PADGETT, AND JOSEPH STANLEY, IN
THEIR OFFICIAL CAPACITIES AS ELECTED
MAGISTRATES AND MEMBERS OF THE FISCAL
COURT OF LINCOLN COUNTY, KENTUCKY                     APPELLEES

                          OPINION
                         AFFIRMING

                         ** ** ** ** **

BEFORE: COMBS, KRAMER, AND L. THOMPSON, JUDGES.
THOMPSON, L., JUDGE: The Appellants, City of Stanford, City of Hustonville,

and City of Crab Orchard, appeal from an order of the Lincoln Circuit Court which

upheld an ordinance enacted by the Lincoln County Fiscal Court. We find no error

and affirm.

                    FACTS AND PROCEDURAL HISTORY

              In 2017, the Lincoln County Fiscal Court adopted an ordinance which

imposed a $4.00 fee on all active water service within the county in order to help

fund its emergency 911 services. The ordinance required any entity operating a

water distribution system within Lincoln County to collect the fee from water

customers and remit it to Lincoln County. The ordinance allowed the water

providers to withhold 3% of the fee to reimburse themselves for the administrative

costs associated with the compliance of the ordinance. Appellants are all cities

within Lincoln County, and they each operate a municipal waterworks system.

The ordinance would require these cities to collect the fee from their customers and

remit it to Lincoln County.

              On March 2, 2018, Appellants filed the underlying action alleging the

ordinance is unlawful and sought an order enjoining the enforcement of the

ordinance. On October 12, 2018, Appellants filed a motion for summary

judgment. On November 19, 2018, Appellees filed a motion for summary

judgment. A hearing on the motions was held on March 22, 2019. On May 30,

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2019, the trial court entered an order granting Appellees’ motion for summary

judgment and held that the ordinance was valid. Appellants soon thereafter filed a

motion to alter, amend, or vacate, but that motion was denied. This appeal

followed.1

                                         ANALYSIS

              Appellants argue on appeal that the trial court erred by holding that

the ordinance did not infringe upon the cities’ exclusive authority to set water

prices and that Lincoln County did not exceed its statutory authority in enacting the

ordinance.

                    The standard of review on appeal of a summary
              judgment is whether the trial court correctly found that
              there were no genuine issues as to any material fact and
              that the moving party was entitled to judgment as a
              matter of law. . . . “The record must be viewed in a light
              most favorable to the party opposing the motion for
              summary judgment and all doubts are to be resolved in
              his favor.” Summary “judgment is only proper where the
              movant shows that the adverse party could not prevail
              under any circumstances.” Consequently, summary
              judgment must be granted “[o]nly when it appears
              impossible for the nonmoving party to produce evidence
              at trial warranting a judgment in his favor[.]”

1
 We would like to commend the trial court’s thorough findings of fact and analysis in the order
granting summary judgment.

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Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996) (citations omitted). This

case ultimately revolves around the interpretation of a county ordinance; therefore,

it is reviewed de novo. Commonwealth v. Jameson, 215 S.W.3d 9, 15 (Ky. 2006).

             Kentucky Revised Statute (KRS) 65.760 authorizes Lincoln County to

operate a 911 emergency services system. KRS 65.760(3)(a) states in pertinent

part that “[t]he funds required by a local government to establish and operate 911

emergency service . . . may be obtained through the levy of any special tax,

license, or fee not in conflict with the Constitution and statutes of this state.” The

statute then goes on to describe when a telephone company must collect the 911

tax or fee on behalf of the government entity operating the 911 service. KRS

65.760(7) states that “[n]othing in this section shall preclude other means of

establishing or funding a 911 emergency service within any local area or exchange,

nor require the operation of such service by any local government.”

             There has been very little case law dealing with KRS 65.760. Two

recent cases, Greater Cincinnati/Northern Kentucky Apartment Association, Inc. v.

Campbell County Fiscal Court, 479 S.W.3d 603 (Ky. 2015), and City of Lancaster

v. Garrard County, No. 2013-CA-000716-MR, 2017 WL 3446983 (Ky. App. Aug.

11, 2017), have upheld ordinances that allow for the collection of 911 fees through

other means than telephone companies. In Greater Cincinnati, the Campbell

County Fiscal Court enacted an ordinance which required an annual $45.00 fee

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levied on all occupied residential and commercial buildings in the county. In City

of Lancaster, the Garrard County Fiscal Court enacted a similar ordinance to the

one at hand which implemented a $0.25 fee on every water meter and required that

every entity operating a water distribution system in the county collect the fee on

behalf of the county.2 In this case, Appellants do not argue that Appellees cannot

collect a 911 fee from sources other than telephone companies; they argue that the

ordinance violates certain statutes and that the fiscal court cannot force the water

companies to collect the fees on its behalf.

              Appellants argue that the ordinance violates KRS 96.170, which

states:

              The legislative body of any city may, by ordinance,
              provide the city and its inhabitants with water, light,
              power, and heat, by contract or by works 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.

Appellants claim that this statute gives them exclusive authority to regulate the

price of water and that the ordinance impermissibly increases the price of water.

              The trial court held that the ordinance did not regulate or fix the price

of water services because the fee was not in exchange for water provided to

2
 While City of Lancaster has a similar ordinance to the one at hand, the arguments raised by
Appellants in this case were not raised by the parties in City of Lancaster.

                                              -5-
customers and did not support the infrastructure or administration of the water

services. The court went on to state that the fee was for the purposes of funding

the 911 services only and that appending the fee to a water bill is merely a

convenient way of collecting said fee. Alternatively, the court held that KRS

96.170 does not give Appellants exclusive jurisdiction over water prices. Citing

Haney v. City of Somerset, 530 S.W.2d 377 (Ky. 1975), the court believed the

statute was merely a basic grant of authority, and so long as the ordinance is

supported by law, Lincoln County can add a fee to the water price.

               We believe the trial court’s alternative holding, that KRS 96.170 does

not give exclusive pricing authority to Appellants, to be the determinative ruling in

this case.3 As pointed out by the trial court, the case of Haney, supra, states that

KRS 96.170 is a general grant of authority allowing a city to operate a utility

service. “We must interpret statutes as written, without adding any language to the

statute[.]” Commonwealth v. Chestnut, 250 S.W.3d 655, 661 (Ky. 2008) (citation

omitted). The statute does not explicitly grant Appellants exclusive authority.

Nothing in the statute would prohibit another governmental entity from adding a

tax or fee to the price of water so long as it was authorized by statute.

3
 There was no evidence in the record regarding what would happen if a water customer paid his
or her water bill, but did not pay the additional 911 fee. If that customer’s water service was
subject to termination, it could be interpreted as the 911 fee being a part of the price of water and
not an additional, unrelated fee. Without this information, we are unable to fully analyze the trial
court’s holding that the 911 fee did not add to the price of water.

                                                -6-
             That brings us to the next issue on appeal: does the Lincoln County

Fiscal Court have the authority to insert this fee into the water bills of Appellants’

customers and to require Appellants to collect the fee? The trial court held that

KRS 65.760 and KRS 67.083 allow for the collection of the fee. As discussed

above, KRS 65.760 allows the county to establish and fund the 911 services. KRS

67.083 states in relevant part:

             (1) It is the purpose of this section to provide counties as
             units of general purpose local government with the
             necessary latitude and flexibility to provide and finance
             various governmental services within those functional
             areas specified in subsection (3) of this section, while the
             General Assembly retains full authority to prescribe and
             limit by statute local governmental activities when it
             deems such action necessary.

             ....

             (3) The fiscal court shall have the power to carry out
             governmental functions necessary for the operation of the
             county. Except as otherwise provided by statute or the
             Kentucky Constitution, the fiscal court of any county
             may enact ordinances, issue regulations, levy taxes, issue
             bonds, appropriate funds, and employ personnel in
             performance of the following public functions:

                    ...

                    (d) Provision of hospitals, ambulance
                    service, programs for the health and welfare
                    of the aging and juveniles, and other public
                    health facilities and services;

                    ...

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                    (u) Provision of police and fire protection[.]

The trial court concluded that KRS 65.760 allowed for the fee. The court went on

further to hold that KRS 67.083 authorized the fiscal court to enact the ordinance at

issue because 911 services involve hospitals, ambulance service, police

departments, and fire departments. The court also held that these statutes not only

allow the fiscal court to authorize the fees, but require the water companies to

collect the fees.

             Appellants argue that the court erred in its interpretation of KRS

65.760 and KRS 67.083. Appellants claim that these statutes do not specifically

allow for the fiscal court to compel water companies to collect the fee. Appellees

argue that KRS 65.760 and KRS 67.083 allow for the fee and for its collection.

             We agree with the trial court’s interpretation. KRS 65.760 allows

Lincoln County to collect fees to fund 911 services. KRS 65.760 specifically

states that the fee can be collected from telephone companies, KRS 65.760(3), but

it also states that the fees can come from sources other than telephone companies.

KRS 65.760(7). KRS 67.083 allows Lincoln County to create the ordinance at

issue to facilitate said funding.

             The purpose of KRS 67.083 is to provide counties with
             the necessary latitude and flexibility to finance various
             governmental services specified in subsection 3 while
             retaining the authority of the General Assembly to limit
             by statute local governmental activities. . . . Any

                                          -8-
             limitation cannot be implied and must be an express
             restriction.

Casey County Fiscal Court v. Burke, 743 S.W.2d 26, 27 (Ky. 1988). While

Appellants may believe KRS 96.170, the statute that allows Appellants to provide

utility services, limits Appellees’ authority to collect a fee from water customers,

as we have previously stated, it does not.

                                  CONCLUSION

             Based on the foregoing, we conclude that the Lincoln County Fiscal

Court’s ordinance is valid, and we affirm the judgment of the Lincoln Circuit

Court.

             ALL CONCUR.

 BRIEFS FOR APPELLANTS:                      BRIEF FOR APPELLEES:

 Stephen A. Sherman                          D. Barry Stilz
 Louisville, Kentucky                        Robert C. “Coley” Stilz, III
                                             Lynn Sowards Zellen
 Damon R. Talley                             Lexington, Kentucky
 Hodgenville, Kentucky

 Jonathan R. Baker
 Stanford, Kentucky

 ORAL ARGUMENT FOR                           ORAL ARGUMENT FOR
 APPELLANTS:                                 APPELLEES:

 Stephen A. Sherman                          D. Barry Stilz
 Louisville, Kentucky                        Lexington, Kentucky

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