City of Philadelphia v. Schweiker

• Decision Date: 22 September 2004
• Citation: 858 A.2d 75,579 Pa. 591
• Parties: The CITY OF PHILADELPHIA and John F. Street, Appellants, v. Mark SCHWEIKER; the Philadelphia Parking Authority; Joseph T. Ashdale; Michael A. Cibik; Catherine Marshall; Alfred W. Taubenberger; Russell R. Wagner; Karen M. Wrigley, Appellees.
• Court: Pennsylvania Supreme Court

858 A.2d 75

579 Pa. 591

The CITY OF PHILADELPHIA and John F. Street, Appellants, v. Mark SCHWEIKER; the Philadelphia Parking Authority; Joseph T. Ashdale; Michael A. Cibik; Catherine Marshall; Alfred W. Taubenberger; Russell R. Wagner; Karen M. Wrigley, Appellees.

Supreme Court of Pennsylvania.

Argued May 12, 2004.

Decided September 22, 2004.

Richard Gerson Feder, Esq., Pedro Alberto Ramos, Esq., Eleanor N. Ewing, Esq., Philadelphia, for City of Philadelphia.

Eleanor N. Ewing, Esq., Philadelphia, for John F. Street.

Carolyn H. Nichols, Esq., Dennis Gerard Weldon, Jr., Esq., Obra S. Kernodle, Esq., for Philadelphia Parking Authority.

G. Alexander Bochetto, Esq., for Michael A. Cibik.

Gregg R. Melinson, Esq., Jason Peter Gosselin, Esq., Alfred W. Putnam, Esq., David P. Bruton, Esq., Philadelphia, for Philadelphia Parking Authority, et al.

Susan Jane Forney, Esq., Harrisburg, for Honorable Edward G. Rendell.

BEFORE: CAPPY, C.J., and CASTILLE, NIGRO, NEWMAN, SAYLOR, EAKIN and BAER, JJ.

OPINION

Justice SAYLOR.

This is a direct appeal from an order of the Commonwealth Court sustaining the preliminary objections of the Governor of Pennsylvania and the Philadelphia Parking Authority to a complaint filed by the City of Philadelphia and its mayor, challenging the legality of certain amendments to Pennsylvania's Parking Authority Law. The principal question presented is whether the General Assembly had the authority to enact provisions which, among other things, transferred control of the parking authority from the Mayor of Philadelphia to the Commonwealth.

I.

As early as 1947, the post-War pattern of suburban growth, combined with large numbers of individuals commuting via private automobile to workplaces inside cities, had generated the need for an increase in the availability of off-street parking in urban areas throughout the Commonwealth. The Legislature, aware of this problem, considered it a matter of state-wide concern, finding that it impacted upon persons residing both inside and outside of the affected cities.¹ Thus, the General Assembly enacted the Parking Authority Law,² enabling cities, boroughs, and first class townships to create parking authorities in order to provide, administer, and collect revenue from, various types of parking facilities. See generally 53 P.S. § 344 (relating to method of incorporation) (recodified as amended at 53 Pa.C.S. § 5504). Although the statute constituted an enabling act authorizing the specified municipalities to create such authorities by ordinance or resolution, it provided that any parking authority thus created would not be considered a municipal instrumentality, but would instead constitute a "public body corporate and politic, exercising public powers of the Commonwealth as an agency thereof." 53 P.S. § 345 (relating to purposes and powers) (recodified as amended at 53 Pa.C.S. § 5505). Several benefits flowed from this designation, including that parking authorities could finance construction projects free from the debt limits applicable to local governments, see Pa. Const. art. IX, §§ 10, 12; 53 Pa.C.S. §§ 8001-8285, and that, like other authorities, they could engage in proprietary or business-type operations from which local governments might otherwise be precluded. See generally SEPTA v. Union Switch & Signal, 161 Pa.Cmwlth. 400, 404, 637 A.2d 662, 664-65 (1994)

.

The facts underlying the present dispute are as follows.³ The Philadelphia Parking Authority (the "Parking Authority") was created in 1950 by ordinance of the City of Philadelphia (the "City"), which was adopted pursuant to the Parking Authority Law. In 1987, the City extended the life of the Parking Authority to 2037, making its life span coterminous with that of several outstanding bond issues. Initially, the Parking Authority only operated certain off-street parking garages. These operations continue to the present, and are generally carried out through leases with the City. In particular, the City leases to the Parking Authority the land and/or buildings necessary for the latter to operate parking garages and surface lots within the City and at the Philadelphia International Airport (the "Airport") on land owned by the City. In return, the Parking Authority pays to the City rent derived from the revenues received from these parking operations. This rent has amounted to approximately $21,500,000 per year for the past several years; the vast majority of this money has come from the parking facilities located at the Airport's terminals, which were built on land owned by the City and financed primarily through bond issues. Because the federal government provided the City with grants to operate the Airport, the City may be required to segregate the monies received from the airport parking facilities into a fund designated for Airport use. See 49 U.S.C. § 47107(b).

As amended in 1982, the Parking Authority Law authorized cities to delegate to their parking authorities responsibility for certain on-street parking functions, some of which are revenue-producing (e.g., issuing parking tickets and collecting money from parking meters). Such revenues from on-street functions were required by statute to be distributed back to the municipality as provided by ordinance or resolution. Thus, in 1983, the City passed an ordinance giving the Parking Authority responsibility for much of the City's on-street parking services, which had previously been handled by multiple departments of the City.⁴ In keeping with the provisions of the ordinance, these responsibilities are fulfilled under an intergovernmental cooperation agreement. From such activities, the Parking Authority collected net revenues of approximately $13,000,000 per year during the past several years. These monies formed a part of the City's operating budget and were accordingly reported in the City's five-year plan as revenue to balance the City's budget.

Throughout its existence, the Parking Authority has issued numerous tax-exempt long-term municipal bonds (some of which are still outstanding) to finance parking-related development projects within the City and at the Airport. Some of these bond issues subsume parking service contracts between the City and the Parking Authority which require the City to guarantee the debt servicing of the bonds in the event that the Parking Authority defaults. At the time these contracts were executed, the Parking Authority Law effectively placed the City in a position to control some of the factors which affected its risk, including the composition of the Parking Authority's governing board.

Pursuant to Section 8 of the Parking Authority Law, 43 P.S. § 348 (superseded), the Parking Authority was, until recently, controlled by a five-member governing board appointed by the Mayor of Philadelphia (the "Mayor"). On June 19, 2001, however, then-Governor Ridge signed into law Act 22 of 2001 ("Act 22").⁵ Act 22, inter alia, codified the Parking Authority Law at Sections 5501 through 5517 of Title 53 of the Pennsylvania Consolidated Statutes, 53 Pa.C.S. §§ 5501-5517, see generally City of Phila. v. Commonwealth, 575 Pa. 542, 582-84 & n. 21, 838 A.2d 566, 590-92 & n. 21 (2003) (explaining the process of statutory codification), and amended the Parking Authority Law by adding a special provision — applicable only to Philadelphia — supplanting the Mayor's appointment powers over the Parking Authority's governing board and repositing appointment authority in the Governor.⁶ This provision additionally required the reconstituted Parking Authority to transfer up to $45,000,000 of its retained earnings to the Philadelphia School District, with similar subsequent annual transfers based upon the availability of earnings. Specifically, the Parking Authority Law states:

During its fiscal year beginning in 2001, the authority shall transfer to the general fund of a school district of the first class coterminous with the parent municipality that portion of its retained earnings, not to exceed $45,000,000, which will not jeopardize the authority's ability to meet debt service payments or to retire outstanding bonds. In subsequent years the board shall transfer the maximum amount it deems available for such purpose.

53 Pa.C.S. § 5508.1(q).

Consistent with these statutory amendments, the Governor added six members to the existing five-member board. The City thereafter filed a complaint in the Philadelphia County Court of Common Pleas, naming the new appointees as defendants and challenging the validity of the amendments. The City also sought injunctive relief to prevent the new board members from being sworn in. The common pleas court, however, concluded that the Governor was an indispensable party by virtue of his new appointment powers, and that it therefore lacked jurisdiction. Accordingly, by order dated July 10, 2001, the trial court transferred the case to the Commonwealth Court pursuant to Section 5103(a) of the Judicial Code. See 42 Pa.C.S. § 5103(a). After holding a hearing, the Commonwealth Court dismissed the matter for lack of jurisdiction,⁷ prompting the City to seek an emergency stay and the exercise of King's Bench powers by this Court. Relief was denied to the extent that the City sought to prevent the seating of the newly-constituted board, although this Court did stay further implementation of the challenged amendments. See City of Phila. v. Philadelphia Parking Auth., 566 Pa. 230, 780 A.2d 601 (2001) (per curiam)

. Thereafter, this Court vacated the Commonwealth Court's dismissal order, remanded the matter for consideration on the merits, and lifted its previous stay. See City of Phila. v. Philadelphia Parking Auth., 568 Pa. 430, 798 A.2d 161 (2002) (per curiam).⁸ The City then filed an amended complaint, adding Mayor Street as a plaintiff and then-Governor Schweiker as a defendant.

The amended complaint, filed by the City and Mayor Street (collectively, "Appellants"), includes nine counts, alleging...