Court Opinion

ID: 5065161
Source: CourtListenerOpinion
Date Created: 2021-10-01 09:48:38.502356+00
Date Added: 2024-06-11T08:19:35.673747
License: Public Domain

LEIBSON, Justice,
dissenting.
Respectfully, I dissent.
The first question is whether the Transit Authority of Lexington-Fayette Urban County Government should be classified as a municipality as that term is used in Section 162 of the Kentucky Constitution. That Section forbids any “county, city, town or other municipality” from entering agreements or contracts which commit to *527binding arbitration. The legislative body of such municipality cannot delegate its decision making power. But we should not designate every public agency as qualifying under the term “municipality.” The enabling legislation under which the Transit Authority was created empowered the Lexington-Fayette Urban County Government to create what was essentially a corporation to take over from the private transit system, assuming its obligations, exercising “all of the powers of private corporations” (KRS 96A.020), and assuming the duty to “observe all existing labor contracts and pension obligations” (KRS 96A.200). In short, this public agency, as created, was to function in a manner distinct and different from that of a “county, city, town or other municipality.” Ky. Const., § 162. The most important difference was that as created it had no power to tax. KRS 96A.090(1). It operates independently (KRS 96A.100) and it is self-financing (KRS 96A.120). The local government “may” contribute to its support, but there is no requirement that it do so. KRS 96A.090(2). (Emphasis added.)
The restrictions of Kentucky Constitution § 162 are intended for legislative bodies with power to raise and spend public funds. The agency under consideration functioned not as a municipality, but more or less as the privately owned transportation corporation which it replaces. Formerly, Lexington-Fayette Urban County Government could franchise or contract with a private transportation company to perform the service. That corporation could then contract with a union to arbitrate the wage scale. The contract now under consideration was exercised with full statutory power, and there is no reason, constitutional or otherwise, why the contract should not be honored.
Furthermore, the form in which the statutory authorization was structured was adopted in order to comply with the requirements of the Urban Mass Transportation Act of 1964, 49 U.S.C. § 1601 et seq. (hereinafter “UMTA.”) As stated in Jackson Transit Auth. v. Local Div. 1285, 457 U.S. 15, 17, 102 S.Ct. 2202, 2204, 72 L.Ed.2d 639, 642 (1982):
“The Act [UMTA] was designed in part to provide federal aid for local governments in acquiring failing private transit companies, so that communities could continue to receive the benefits of mass transportation despite the collapse of the private operations.”
The Transit Authority was signatory to an agreement entered-into as required by § 13(c) of the UMTA, as amended, 49 U.S.C. § 1609(c) (hereinafter “13(c) agreement”). Subsection 13(c) requires a state or local government to make arrangements to preserve transit workers’ existing rights before that government may receive any federal money under the Act. The agreement which we now declare void is a continuation of agreement to submit to binding arbitration which was an obligation freely accepted by the state of Kentucky in order to obtain federal funds. Federal funds were available only on condition that the Transit Authority created was prepared to take over the existing bus service contract. The Transit Authority took over the contract providing for interest arbitration and then renewed that contract. The state of Kentucky should honor the obligations it has assumed in order to obtain federal funds. To do otherwise may well result in a subsequent determination that we have misused federal funds. See Bennett, Sec. of Ed. v. Kentucky Dept. of Ed., — U.S. -, 105 S.Ct. 1544, 84 L.Ed.2d 590 (1985).
More importantly, it is a foremost obligation of government to honor its obligations. Having assumed the obligation to enter into binding interest arbitration pursuant to the powers granted to the Transit Authority in the enabling legislation, and in conformity with what was necessary to obtain funds under the UMTA, there is no justification, constitutional or by case law, for us to permit the Transit Authority to break its contract.