Preston v. Board of Water Com'rs of Detroit

• Citation: 76 N.W. 92,117 Mich. 589
• Parties: PRESTON ET AL. v. BOARD OF WATER COM'RS OF CITY OF DETROIT.
• Decision Date: 12 July 1898
• Court: Michigan Supreme Court

76 N.W. 92

117 Mich. 589

PRESTON ET AL. v. BOARD OF WATER COM'RS OF CITY OF DETROIT.

Supreme Court of Michigan

July 12, 1898

Appeal from circuit court, Wayne county, in chancery; Robert E Frazer, Judge.

Bill by Marvin Preston and others against the board of water commissioners of the city of Detroit. From a decree in favor of complainants, both parties appeal. Reversed.

John W McGrath, for complainants.

Fred A Baker, for defendant.

MOORE, J.

Stated in the language of the solicitor for complainants: "This bill was filed in 1890, to restrain the collection of water rates as assessed, on the ground that the basis of the assessment was and is radically inequitable, and contrary to law. (1) That if the defendant has the right to include in the assessment of rates the expenses of extension and construction, and the payment of the bonded debt, as well as the operating expenses, (a) it must assess for public uses as well as for private; (b) it has no right to discriminate between consumers, or to exempt any user; (c) it has no right to furnish water free to the public, to the board of education, or to charitable institutions; (d) it has no right to use the moneys collected as water rates for uses not directly associated with the subject of furnishing a water supply. (2) That the water plant was constructed and exists for public as well as private use. The capacity of the plant is enlarged because of the public demands upon it for fire protection, park, and other public uses, and because of the probability of increased demands upon it in the future. Hence, in any event, a large part of the cost of the plant and of additions thereto, should be borne by the general public. (3) That the plant belongs to the municipality, and not to the private consumer, and its cost, including the payment of the bonded debt, should be made a general city charge. (4) That the charter of the city, and the acts under which the bonds were issued, contemplate the payment of the bonded debt and the interest thereon, as well as the cost of extension and construction, by the city, and not by the private consumer." Testimony was taken before a commissioner, who found, among other things, as follows: "(1) That I find the total sum charged against said complainants from July 1, 1890, to January 1, 1897, to be the sum of one thousand one hundred and seventy-two dollars and sixty-four cents; and if no deductions are to be made on account of the use by the public of water, the free use of water by certain private individuals, corporations, or charities, for which a nominal charge only has been made, and the cost of construction and extension of the works, the expenditures for the payment of interest and bonded debt, as well as the operating expenses, are to be made a charge against the consumers of water, then I find the above-named sum of one thousand one hundred and seventy-two dollars and sixty-four cents to be due from the complainants named. (2) I find that table No. 1, as the same appears in Exhibit A, hereto attached, is a correct statement of the amounts expended by the defendant for construction, the payment of interest, the payment of bonds and the operating expenses of said board, together with the total water rates assessed and collected from July 1, 1890, to January 1, 1897, and that the total expenditures for construction, interest, bonds, and the operation during said period was $3,557,545.39. I find that the board of education, from July 1, 1890, to July 1, 1894, paid the nominal rate of one thousand dollars per annum, whereas, if charged as other private consumers, it should have paid seven thousand dollars per annum; and that from July 1, 1894, to January 1, 1897, the schools were metered, and the board of education was charged and paid at the rate of two cents per thousand gallons, whereas the rates charged on other consumers of water were six and two-thirds and two and two-thirds cents per thousand gallons; and that the difference between what the board actually paid and what it should have paid is the sum of $27,031. I find that from July 1, 1890, to January 1, 1897, the board expended, from sums collected as water rates, on account of the Hurlbut fund, $66,014.60 in excess of the receipts from the Hurlbut estate. I find that up to 1888 or 1889 the board had charged to consumers having hose connection four dollars per annum each, and there were sixty-five hundred hose connections in the city of Detroit; that in 1888 the board ceased to charge for hose connections, and since said time the number of hose connections has more than doubled; that the amount consumed for lawn sprinkling purposes from hose connections amounts to one-thirteenth of the entire pumpage, and, therefore, that the persons using said hose connections should pay one-thirteenth of the entire water rate imposed. I find further that the public uses four per cent. of the amount of water actually used, which would be about six and two-tenths per cent. of the entire pumpage; and that the municipality, if it paid its proper share for the use of water, should have paid for the period named six and two- tenths per cent. of the entire water rates, or $164,904.10. I find that the amount actually paid by the city of Detroit as water rates for all public purposes, from July 1, 1890, to January 1, 1897, in all departments except the house of correction, as appears by Exhibit B, hereto attached, was the sum of $5,518.04; and the city should have paid $164,904.10 less $5,518.04. These sums are correctly tabulated in table No. 2 of Exhibit A, hereto attached, and the total thereof equals eighteen per cent. of the total rates; and, if they should be deducted, then eighteen per cent. should be deducted from the amount claimed from said complainants, leaving the balance $961.57."

The circuit judge filed a written opinion in the case. The essential part of it reads as follows: "But it is claimed by complainants' counsel that the manner in which water rates are determined, whether by meter or otherwise, is inequitable, and not within the power of the board of commissioners. The charter provides that the commissioners shall cause to be assessed water rates upon such basis as they shall deem equitable; and the question to be determined in this case is whether the commissioners have the power to assess water rates in the manner they are now doing. The water rates collected by the board of commissioners are the only source of revenue provided for the running expenses of the waterworks. This, of course, includes all that is paid out by the commissioners in labor, fuel, and such other expenses as are necessary to supply all the water that is consumed for all purposes in the entire city, and the whole of this expense is paid for by those consumers of water upon whom the water rates are assessed. The following use large quantities of water, and pay either no water rates, or nominal rates, entirely disproportioned to the amount of water used: Public institutions, or those in which the entire public is interested. Board of education pays $1,071, about one-seventh of what it would have to pay if charged at the rate as that charged by consumers who have meters. Board of public works pays nothing for water used by it. Municipal buildings pay a nominal rate. Park board pays no rates. All public fountains are furnished water free. Police department is charged nothing. Fire department pays no water rates. Markets pay nothing. All private charities and hospitals are furnished water by the board on the city paying the nominal sum of $1,000. Cemeteries pay nothing. The question now presents itself whether the board of commissioners, under the power given them to assess water...