Ottawa Cty. Bd. of Commrs. v. Marblehead

• Decision Date: 07 July 1999
• Docket Number: No. 98-1061,98-1061
• Citation: 711 N.E.2d 663,86 Ohio St.3d 43
• Parties: BOARD OF COUNTY COMMISSIONERS OF OTTAWA COUNTY, Appellant, v. VILLAGE OF MARBLEHEAD et al., Appellees.
• Court: Ohio Supreme Court

Page 43

86 Ohio St.3d 43

711 N.E.2d 663

BOARD OF COUNTY COMMISSIONERS OF OTTAWA COUNTY, Appellant, v. VILLAGE OF MARBLEHEAD et al., Appellees.

No. 98-1061.

Supreme Court of Ohio.

Submitted March 30, 1999.

Decided July 7, 1999.

This case stems from a dispute between the Board of County Commissioners of Ottawa County ("the Board") and the village of Marblehead ("Marblehead"), regarding which entity has the right to provide water service to residents of county land that was recently annexed by Marblehead.

The dispute began when the Board's plan for a county-wide water supply system collided with Marblehead's plan to sell excess municipal water to residents within the disputed area before it was annexed. The Board sought to enjoin Marblehead from expanding its water service beyond its municipal boundaries. Because the Board's power to regulate sewer districts and Marblehead's authority to construct water service outside its municipal boundaries were of equal dignity, the trial court applied a balancing test to weigh the interests of the two entities and concluded that the Board had rights paramount to those of Marblehead. The Board obtained a declaratory judgment that Marblehead was without authority to extend water service into the disputed area. The court of appeals affirmed based upon the facts of the case.

Within days of the court of appeals' decision, the residents within the disputed area filed their petition with the Board seeking annexation to Marblehead. Before responding to the petition, the Board passed several resolutions: (1) a resolution of necessity declaring its intention to provide water service to the residents within the disputed area as well as to other areas of the county; (2) a resolution approving detailed plans, specifications, estimates of cost, water rates and charges, and assessment policy; and (3) a resolution determining to proceed with the construction of water system improvements within the county. Thereafter, the Board declined to approve the pending petition for annexation.

County property owners objected to the Board's resolutions regarding the water supply system and filed an appeal to the probate court. The probate court found that the county water supply system was necessary for the public health, convenience, and welfare; that the boundaries of the assessment district were reasonable; and that the tentative assessments were, for the most part, reasonable. The court of appeals affirmed.

Meanwhile, the residents who filed the petition for annexation sought review of the Board's resolution declining to approve the petition at the court of common pleas. The common pleas court determined that the Board had acted arbitrarily and unreasonably in denying the annexation petition and accordingly reversed the Board's refusal to accept the annexation petition.

After the annexation petition was accepted, Marblehead prepared its own plans to provide water service to the residents within the disputed area. The Board sought, through an action for declaratory judgment, a temporary restraining order, and preliminary and permanent injunctive relief, to enjoin Marblehead from extending its water supply system into the disputed area and from engaging in any conduct that would interfere with the Board's ability to issue bonds for improvements within the disputed area. The Board asked the trial court to declare that R.C. 6103.04 gives it continuing authority within the disputed area to complete the water supply system that was already approved and adopted at the time of annexation. Marblehead counterclaimed. Marblehead sought to enjoin the Board from constructing a water supply system within the disputed area without Marblehead's prior approval. Marblehead also sought a declaration that R.C. 6103.04 is unconstitutional because it conflicts with Section 4, Article XVIII of the Ohio Constitution, which Marblehead argued confers absolute authority on a municipality to construct and maintain a water supply system within its borders and to contract for water service for its residents.

The trial court found that Marblehead has the exclusive right to provide water service within the disputed area, that R.C. 6103.01 et seq. is unconstitutional to the extent it interferes with Marblehead's exclusive right, and that the Board does not have the authority to construct a water supply system within Marblehead without Marblehead's approval. The court of appeals affirmed.

The cause is now before this court upon the allowance of a discretionary appeal.

Benesch, Friedlander, Coplan & Aronoff, L.L.P., Orla E. Collier III, N. Victor Goodman and James F. DeLeone, Columbus, for appellant.

Vorys, Sater, Seymour & Pease, L.L.P., and Joseph A. Brunetto, Columbus, for appellees.

COOK, J.

Although Article XVIII of the Ohio Constitution grants municipalities the exclusive authority to provide their residents with utility services, a statute that limits the municipality's power is not unconstitutional if the purpose of the statute is an exercise of the state's police powers and is not a substantial infringement upon the municipality's authority. Because R.C. 6103.04 satisfies these requirements, it is not unconstitutional.

The Ohio Constitution authorizes a municipality to provide water service to its residents to the exclusion of other providers. See Lucas v. Lucas Local School Dist. (1982), 2 Ohio St.3d 13, 2 OBR 501, 442 N.E.2d 449. Under Section 4, Article XVIII of the Ohio Constitution, "[a]ny municipality may acquire, construct, own, lease and operate within or without its corporate limits, any public utility the product or service of which is or is to be supplied to the municipality or its inhabitants, and may contract with others for any such product or service. The acquisition of any such public utility may be by condemnation or otherwise, and a municipality may acquire thereby the use of, or full title to, the property and franchise of any company or person supplying to the municipality or its inhabitants the service or product of any such utility." This constitutional provision is part of the municipal home-rule amendments that were proposed to remove "all legitimate questions as to the authority of municipalities to undertake and carry on essential municipal activities." 2 Proceedings and Debates of the Constitutional Convention of the State of Ohio (1913), at 1433.

But, according to Marblehead, the statute at issue, R.C. 6103.04, permits a county sewer district to exercise jurisdiction for water-works purposes within the annexed territory of a municipality in violation of Section 4, Article XVIII of the Ohio Constitution. R.C. 6103.04 provides statutory authority to enable an established county sewer district to complete an existing county water service project when territory within the project area acquires municipality status through annexation during the pendency of the county project. R.C. 6103.04 provides:

"Whenever any portion of a sewer district is * * * annexed to a municipal corporation, the area so * * * annexed shall remain under the jurisdiction of the board of county commissioners for water-works purposes until any water supply or water-works improvements for said area for which detailed plans have been prepared and the resolutions declaring the necessity thereof has [sic] been adopted by the board have been completed or until said board has abandoned such projects. Such * * * annexation of any part of a district shall not interfere with or render illegal any issue of bonds or certificate of indebtedness made by the board * * * to provide payment for the cost of construction and maintenance of any water improvements within such area, or with any assessments levied or to be levied upon the property within such area to provide for the payment of the cost of construction and maintenance."

R.C. 6103.04 appears to contravene the constitutional authority of a municipality to provide public utility service. And that right is not generally subject to statutory restriction. Lucas, 2 Ohio St.3d 13, 2 OBR 501, 442 N.E.2d 449; Columbus v. Pub. Util. Comm. (1979), 58 Ohio St.2d 427, 12 O.O.3d 361, 390 N.E.2d 1201. But a statute enacted to promote the health, safety, and welfare of the public can override the municipality's authority if the statute does not substantially interfere with the municipality's constitutionally granted power. See, e.g., Columbus v. Teater (1978), 53 Ohio St.2d 253, 260-261, 7 O.O.3d 410, 414, 374 N.E.2d 154, 159; Canton v. Whitman (1975), 44 Ohio St.2d 62, 68, 73 O.O.2d 285, 289, 337 N.E.2d 766, 771 ("An exercise of the police power necessarily occasions some interference with other rights, but that exercise is valid if it bears a real and substantial relationship to the public health, safety, morals or general welfare, and if it is not unreasonable or arbitrary.").

In determining that R.C. 6103.04 is constitutional, we proceed from the fundamental precept that Ohio statutes are entitled to a strong presumption of constitutionality and must, in questionable cases, be construed to be constitutional if possible. State ex rel. Jackman v. Court of Common Pleas of Cuyahoga Cty. (1967), 9 Ohio St.2d 159, 161, 38 O.O.2d 404, 405-406, 224 N.E.2d 906, 908-909; State v. Renalist, Inc. (1978), 56 Ohio St.2d 276, 10 O.O.3d 408, 383 N.E.2d 892. In addition, we note that in Columbus v. Pub. Util. Comm., 58 Ohio St.2d at 432, 12 O.O.3d at 364, 390 N.E.2d at 1204, this court explained that a spectrum of relations exists between the state and its municipalities:

"Where the state enacts a statute promoting a valid and substantial interest in the public health, safety, morals or welfare; where the statute's impact upon the municipal utilities is incidental and limited; and where the statute is not an attempt to restrict municipal power to operate utilities, the statute will be upheld. Conversely, * * * where the purpose of a statute is to control or restrict municipal...