North Carolina Elec. Membership Corp. v. White

• Decision Date: 21 September 1989
• Docket Number: No. 0:86-2911-15.,0:86-2911-15.
• Citation: 722 F. Supp. 1314
• Court: U.S. District Court — District of South Carolina
• Parties: NORTH CAROLINA ELECTRIC MEMBERSHIP CORPORATION, North Carolina Municipal Power Agency Number One, Duke Power Company, and Piedmont Municipal Power Agency, Plaintiffs, v. Murray B. WHITE, Jr., Peggy G. Upchurch, Caldwell A. Barron, J.B. Comer, John D. Douglas, David Vipperman and Joe D. Newton, in Their Capacity as Members of the County Council of York County, South Carolina; the County Council of York County, South Carolina; Western York County Water and Sewer District of York County, South Carolina; the County of York, South Carolina; Gerald H. Kemp, Jr., Julian Dickerson, Joe Johnson, Ron Wilson, Tom Burton, David A. Cyphers and Freddie M. Clinton, in Their Capacity as Members of the Board of Directors of the Western York County Water and Sewer District, Defendants.

722 F. Supp. 1314

NORTH CAROLINA ELECTRIC MEMBERSHIP CORPORATION, North Carolina Municipal Power Agency Number One, Duke Power Company, and Piedmont Municipal Power Agency, Plaintiffs, v. Murray B. WHITE, Jr., Peggy G. Upchurch, Caldwell A. Barron, J.B. Comer, John D. Douglas, David Vipperman and Joe D. Newton, in Their Capacity as Members of the County Council of York County, South Carolina; the County Council of York County, South Carolina; Western York County Water and Sewer District of York County, South Carolina; the County of York, South Carolina; Gerald H. Kemp, Jr., Julian Dickerson, Joe Johnson, Ron Wilson, Tom Burton, David A. Cyphers and Freddie M. Clinton, in Their Capacity as Members of the Board of Directors of the Western York County Water and Sewer District, Defendants.

No. 0:86-2911-15.

United States District Court, D. South Carolina, Rock Hill Division.

September 21, 1989.

COPYRIGHT MATERIAL OMITTED

R.W. Dibble, Jr., Jane W. Trinkley, McNair Law Firm, Columbia, S.C., J. Phil Carlton, Susanna K. Gibbons, Poyner & Spruill, Raleigh, N.C., for plaintiffs; W. Edward Poe, Jr., Associate Gen. Counsel, Duke Power Co., Charlotte, N.C., of counsel.

John P. Linton, Jr., Charlton de Saussure, Sinkler, Gibbs & Simons, P.A., Charleston, S.C., Melvin B. McKeown, Jr., Spratt, McKeown & McCrae, York, S.C., for defendants.

ORDER

HAMILTON, District Judge.

Plaintiffs, various utility companies owning approximately ninety percent of the Catawba Nuclear Power Station (Catawba) in York County (York), South Carolina, challenge the constitutionality of a water and sewer district (Water and Sewer District or District) created by the York County Council (County Council or Council).¹ Plaintiffs challenge the constitutionality of S.C.Code Ann. § 4-9-30(5)(b)² and the ordinance that created the District under the following provisions of the United States Constitution: (1) due process clause of fifth and fourteenth amendments; (2) takings clause of fifth amendment as incorporated through the due process and equal protection clauses of the fourteenth amendment; and (3) "one man, one vote" principle arising out of the equal protection clause of the fourteenth amendment. The matter is currently before the court upon cross-motions for summary judgment.

The factual background giving rise to the instant action is simple and undisputed in all material respects. Apparently at some point in 1981, York citizens and community leaders began to voice the need for improved water and sewer service in the unincorporated areas of the county. During that same year, County Council commissioned a study by B.P. Barber & Associates, Inc., consulting engineers, to determine the water and sewer needs of the county. On November 2, 1982, a countywide referendum was held, the results of which favored providing water service to the unincorporated areas of the county.³

Although it is disputed whether Council or private citizens initiated certain discussions which occurred between representatives of the City of York and the Town of Clover, two municipalities located in Eastern York, and county officials and residents of Western York, it is clear that such discussions did occur. See York County Council Minutes (Council Minutes), April 2, 1984, para. III, September 18, 1985, para. VII, December 2, 1985, para. XI. As a result of these discussions between representatives of the neighboring municipalities and the citizens of the unincorporated areas of York and their elected officials, County Council approved the creation of a committee to study the establishment of a special tax district in Western York on December 16, 1985, and Council members Harold Dickson and Peggy G. Upchurch were appointed to the committee. See Council Minutes, December 16, 1985, para. 4. This committee was called the "Western York County Water Study Committee" (Water Study Committee). Id. Subsequently, County Council was regularly apprised of the Water Study Committee's progress. Council Minutes, January 20, 1986, para. III, February 3, 1986, para. VI, April 8, 1986, para. IV. Council also authorized B.P. Barber & Associates, Inc. to update its earlier water study and to assist in the development of a special tax district in Western York. Id.

The Water Study Committee created by Council met on January 27, 1986, and, as plaintiffs do not dispute, reviewed a proposed draft ordinance prepared by the York attorney for the creation of a special tax district to be known as the Western York County Water and Sewer District. Klugh affidavit, paras. 9, 11.⁴ On June 2, 1986, County Council adopted a resolution endorsing and supporting the creation of the District. Klugh affidavit, Exhibit A. At its meeting on June 25, 1986, County Council accepted a petition signed by approximately 3,300 freeholders in Western York requesting that a special referendum and election be held to determine whether Council should be authorized to enact an ordinance to create the proposed district. Council Minutes, June 25, 1986, para. VI. At the August 18, 1986, Council meeting, representatives of Duke Power Company, one of the plaintiffs in this action, appeared before Council to protest the proposed referendum and election scheduled for September 23, 1986. Duke Power representatives presented Council with a constitutional burdens and benefits analysis, asserting that the proposed method of financing the water and sewer improvements was totally unfair to Duke Power and its customers. Council Minutes, August 18, 1986, para. II.

On July 7, 1986, County Council ordered that a special referendum and election be held on September 23, 1986, for the purpose of determining whether the freeholders and electors within the area encompassed by the proposed district favored its creation. The voters were requested to give their opinion on the following questions:

1. Shall a special tax district to be known as the Western York County Water and Sewer District and comprised of approximately 183.6 square miles, the area of and boundaries of which are described in the Notice of Election and appear on the tax map of York County filed in the office of the Assessor of York County, be created in order that water and sewer services may be rendered therein and an annual millage of zero mills be levied in order to provide for the operation and maintenance of the functions of said special tax district, such operation and maintenance to be financed instead by service charge and/or user fees, in addition to ad valorem taxes levied to pay the debt incurred by the issuance of general obligation bonds for such special tax district?

2. Shall the York County Council be empowered to issue and sell, either as a single issue, or from time to time as several separate issues, general obligation bonds for Western York County and Water and Sewer District not exceeding $22 Million which will be paid from the levy and collection of ad valorem taxes without limit as to rate or amount on all taxable property located solely within that area of York County which is the Western York County Water and Sewer District, whose proceeds shall be applied to defray the cost of constructing a water treatment and distribution system?

The special referendum and election was held as scheduled, and the dual ballot box arrangement prescribed by § 4-9-30(b)(5), a section of a comprehensive South Carolina statute commonly known as the Home Rule Act, was utilized. A majority of both classes of voters entitled to vote, the electors and the freeholders, answered the two questions submitted in the affirmative by margins exceeding sixty percent.

Thereafter, Council duly considered and enacted an ordinance creating the District as approved by both classes of voters. On October 6, 1986, Council gave first reading to the ordinance creating the District. Council Minutes, October 6, 1986, para. XIII. The second reading of the proposed ordinance occurred on October 20, 1986, at which time Council decided to hold a public hearing on the proposed ordinance prior to its meeting scheduled for November 10, 1986. Council Minutes, October 20, 1986, para. X. At the November 10, 1986, public hearing, plaintiffs' counsel appeared and opposed the subject ordinance. Council subsequently unanimously approved the ordinance and plaintiffs brought the current action seeking the following relief: (1) a declaration that § 4-9-30 is unconstitutional; (2) a declaration that the ordinance creating the District is unconstitutional; and (3) a permanent injunction against creation of the District.

The Water and Sewer District itself, which contains about 183.6 square miles, lies south of Charlotte, North Carolina, and immediately to the west of the I-77 corridor. It includes a substantial portion of the western shoreline of Lake Wylie. Affidavit of Michael B. Burkhold, para. 8. The Lake Wylie shoreline is a principal area of development to be served by the District. Id., paras. 6, 10, 11, and 13. The District's western border follows the North Carolina state border as it cuts through Lake Wylie and continues that line through the lake. The District includes 54.9 miles of the lake's western shoreline. Id., para. 7. The proposed water intake and water treatment facility for the District, which constitute the District's hub, is to be located on the western shore of Lake Wylie near Catawba. Id., para. 11.

Catawba is located on the neck of a peninsula of land on the western shore of Lake Wylie well within District boundaries. Residences to be served by the system are located all around Catawba, which is located 31.7 miles along the shoreline from the most northeastern point of the shore in the District and about 19.2 miles along the shoreline from the most southeastern point of the shoreline not contained in the District. Id., para. 12. The nearest land which is not part of the District is 1.5 miles away to the southeast near Newport. Id.

In support of their motion for summary judgment, defendant...