Oswald v. City of Blue Springs, 63697

Citation635 S.W.2d 332
Decision Date06 July 1982
Docket NumberNo. 63697,63697
PartiesJulius M. OSWALD, Appellant, v. CITY OF BLUE SPRINGS, Respondent.
CourtUnited States State Supreme Court of Missouri

Robert K. McDonald, Blue Springs, Michael T. White, G. Edwin Proctor, Jr., Kansas City, William Ely, Blue Springs, for appellant.

Wm. Patrick Cronan, Fayette, Lewis C. Green, St. Louis, for amicus curiae.

MORGAN, Judge.

On June 21, 1981, the voters of the City of Blue Springs, Missouri, authorized the issuance of $19,100,000 principal aggregate amount combined waterworks and sewerage system revenue bonds to be issued for the purpose of extending and improving the City's waterworks and sewerage system by construction of a water treatment plant and water transmission lines. In support thereof, the Mayor and Board of Aldermen of the City had indicated that the aforementioned bonds would include a covenant in accordance with § 250.120.1, RSMo 1978 1 requiring the City to fix and maintain rates and make and collect charges for the use and services of said combined systems sufficient to pay the cost of maintenance, operation, principal and interest thereon, and to revise those rates from time to time so as to meet fully the requirements therein.

Appellant Julius Oswald, a citizen, resident, taxpayer and qualified voter of the City of Blue Springs, filed suit seeking a declaratory judgment that § 22 of Article X of the Missouri Constitution (one section of the recent constitutional revision popularly known as the Hancock Amendment) precluded the City from raising the rates charged to users pursuant to § 250.120.1. Further, appellant asked the trial court to enjoin the city from issuing bonds with the covenants mentioned. Otherwise, appellant did not question the validity of the bond election itself.

The facts were not in dispute, and the parties have carried forward the Stipulation of Facts submitted before the trial court. Each party filed a Motion for Summary Judgment and the trial court sustained that of the respondent City of Blue Springs. This Court has jurisdiction of the appeal by reason of Article V, § 3, of the Missouri Constitution (as amended 1976).

The crux of this appeal addresses the language of § 250.120.1, which provides that: "It shall be the mandatory duty of any city ... which shall issue revenue bonds pursuant to this chapter to fix and maintain rates and make and collect charges for the use and services of the system for the benefit of which such revenue bonds were issued, sufficient to pay the cost of maintenance and operation thereof, to pay the principal of and the interest on all revenue bonds ... issued or incurred by such city ... chargeable to the revenues of such system and to provide funds ample to meet all valid and reasonable requirements of the ordinance or resolution by which such revenue bonds have been issued. Such rates shall be from time to time revised so as to fully meet the requirements of this chapter...." This language forms the substance of the contested covenant to be included in the revenue bonds upon issuance.

Appellant argues that § 250.120.1 and the aforementioned covenant based thereon run afoul of § 22(a) of Article X, which states in pertinent part that: "Counties or other political subdivisions are hereby prohibited from levying any tax, license or fee not authorized ... or from increasing the current levy of an existing tax, license or fee ... without the approval of the required majority of the qualified voters..."; or, in the alternative, § 22(b), which specifically exempts "taxes imposed for the payment of principal and interest on bonds or other evidences of indebtedness or for the payment of assessments on contractual obligations in anticipation of which bonds are issued which were authorized prior to the effective date of this section." Appellant contends that the charges for water and sewerage use are encompassed within the limiting grasp of § 22(a) as a "tax, license or fee," or, if not, are beyond the exceptions provided for in § 22(b). However, paragraph 9 of appellant's petition, admitted to by respondent City, acknowledges that, "approval by the voters of Defendant (City of Blue Springs) of the above proposition (revenue bond proposal) authorized the Defendant (City) to raise water and sewer rates to pay the principal and interest on the said bonds." This severely limits the thrust of appellant's claim, as the Hancock Amendment arguably could be seen as restricting an increase for any purpose. As such, the issue before the Court is whether the City may raise water and sewerage rates to meet the cost of maintenance and operation of the physical plant itself, in addition to its conceded authority to increase such charges to pay the principal and interest on said bonds.

Viewed in this context, it becomes unnecessary to determine, for purposes of the case at bar, whether the rates charged for water and sewerage services constitute a tax, license or fee as contemplated within § 22(a) of the Hancock amendment, or whether revenue bonds are within the scope of § 22(b).

There are compelling reasons which dictate that an increase in rates for maintenance and operation of facilities is proper, assuming an increase...

To continue reading

Request your trial
8 cases
  • Keller v. Marion County Ambulance Dist.
    • United States
    • Missouri Supreme Court
    • December 17, 1991
    ...City of Perryville, 813 S.W.2d 855 (Mo. banc 1991) (special assessment for street work not subject to Hancock Amendment); Oswald v. City of Blue Springs, 635 S.W.2d 332 (Mo. banc 1982) (utility charges for operation and maintenance of sewer plant not subject to Hancock Amendment). These cas......
  • Metropolitan St. Louis Sewer Dist. v. Ruckelshaus
    • United States
    • U.S. District Court — Eastern District of Missouri
    • February 8, 1984
    ...may construe the Hancock Amendment in such a way as to avoid or modify the federal constitutional question. Compare Oswald v. City of Blue Springs, 635 S.W.2d 332 (Mo. En Banc 1982) (state political sub-division operating water treatment plant has authority to raise sewage rates) with Rober......
  • City of Lexington v. Seaton
    • United States
    • Missouri Court of Appeals
    • November 19, 1991
    ...for the payment of principal and interest on bonds ... authorized prior to the effective date of this section." Oswald v. City of Blue Springs, 635 S.W.2d 332, 333-34 (Mo. banc 1982), has extended the exception to allow for increased revenues to pay for the costs of maintenance and operatio......
  • Roberts v. McNary
    • United States
    • Missouri Supreme Court
    • August 2, 1982
    ...to give to this case; that he spent 741/2 hours on the case, 18 of which were devoted to an amicus curiae brief filed in Oswald v. City of Blue Springs, 635 S.W.2d 332 (Mo. banc 1982); that counsel believed that filing the brief in Oswald was necessary to make sure that the issues raised in......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT