Sacramento Municipal Utility Dist. v. Spink

Citation145 Cal.App.2d 568,303 P.2d 46
CourtCalifornia Court of Appeals
Decision Date01 November 1956
PartiesSACRAMENTO MUNICIPAL UTILITY DISTRICT, a municipal utility district, Petitioner, v. Joseph E. SPINK, as Secretary of Sacramento Municipal Utility District, Respondent. Civ. 9050.

Frank L. Sprague, Sacramento, McDonough & Wahrhaftig, and Downey, Brand, Seymour & Rohwer, Sacramento, and Orrick, Dahlquist, Herrington & Sutcliffe, San Francisco, of counsel, for petitioner, Sacramento Municipal Utility Dist.

Brandenburger, White & Dillon, Sacramento, for respondent Spink.

SCHOTTKY, Justice.

This is an original proceeding instituted by the Sacramento Municipal Utility District to compel Joseph E. Spink, as Secretary of the Sacramento Municipal Utility District, to sign and execute some $85,000,000 worth of bonds which were authorized by the electors of the district.

The Sacramento Municipal Utility District was organized in July of 1923 under the provisions of the Municipal Utility District Act (now Public Utilities Code, Division 6, Section 11501 et seq.). The District serves a population in excess of 300,000 and comprises an area of approximately 650 square miles in Sacramento and Placer Counties. The District has owned and operated an electric distribution system for over eight years. The District has been purchasing power from the United States Bureau of Reclamation. It does not have any facilities for generating electric power. In 1955 the legislature added certain provisions to the Public Utilities Code which permit a municipal utility district which has owned and operated an electric distribution system for at least eight years and which has a population in excess of 250,000 to issue revenue bonds for the purpose of financing the construction of hydroelectric facilities and associated transmission facilities required to deliver the power and energy generated to the distribution system. Stats.1955, ch. 1268, sec. 1, Public Utilities Code, secs. 12850-12852.

Acting under the authority granted by these statutes, the District called an election at which the electorate was asked to authorize the issuance of some $85,000,000 worth of revenue bonds to be issued under the provisions of the Revenue Bond Law of 1941, Government Code, § 54300 et seq., for the purpose of developing hydroelectric generating facilities on the American River in El Dorado County. The project known as the Upper American River Project will provide for the generating of electricity and the construction of transmission lines to carry the electricity generated to the present distribution system. The bond issue was approved by the voters of the district. Thereafter, the board of directors adopted a resolution authorizing the issuance of the revenue bonds.

The proposed bonds are to be secured by a lien upon the gross revenues of the district including the revenues of the existing distribution system after the maintenance and operating costs are paid. The proposed bonds will not be a general obligation debt of the district; the purchasers of the bonds cannot compel the exercise of the taxing power of the district or the forfeiture of any of its property.

At the present time the District has an indebtedness of $21,270,000, including some $10,317,000 worth of bonds issued in 1938. These bonds were issued under the provisions of the Municipal Utility District Act of 1921 as amended, Stats.1921, ch. 218, Stats.1929, ch. 31, Stats.1931, ch. 75, sec. 18, which at the time the bonds were authorized provided:

'Only revenue producing utilities shall be acquired, owned or operated by a district formed under the provisions of this act. The rates and charges for commodities or service furnished shall be fixed by the board of directors. As far as possible utilities shall be self-supporting but in order so to do the board shall not be required to fix a rate which in its opinion is unreasonably high, nor to cover large expenditures and the interest thereon required for future needs and development.

'The words 'revenue producing utilities' as used in this act, shall be deemed to mean such utilities as those from which revenue is customarily or may be derived by means of charges, rates, or rentals imposed upon or collected from users, consumers or customers thereof, together with such works, facilities and appliances used or useful in connection therewith or incidental thereto.'

Section 20 read:

'(1) If, in the opinion of the board of directors, the revenues will not be sufficient to pay the principal or interest on any bonded debt as it becomes due, or to carry out the objects and purposes of the district, then said board shall levy a tax for such purpose or purposes and fix the amount of money necessary to be raised therefor by taxation.'

Included in the covenants of the 1938 bonds is the following: 'The full faith and credit of said District are hereby pledged for the punctual payment of the principal and interest of this bond.'

Respondent Joseph E. Spink as Secretary of the Sacramento Municipal Utility District has refused to execute the proposed bonds because as he alleges they do not meet the requirements of law.

Mandamus is, of course, an appropriate remedy to compel respondent to sign the bonds if the proposed issue meets the requirements of the law, since the acts demanded are ministerial duties, City of Oxnard v. Dale, 45 Cal.2d 729, 290 P.2d 859; City of Fairfield v. Hutcheon, 33 Cal.2d 475, 202 P.2d 745; California Toll Bridge Authority v. Kelly, 218 Cal. 7, 21 P.2d 425; Fairfield-Suisun Sewer District v. Hutcheon, 139 Cal.App.2d 502, 294 P.2d 102, and original jurisdiction has frequently been exercised by the appellate courts in proper cases of this nature. City of Grass Valley v. Walkinshaw, 34 Cal.2d 595, 212 P.2d 894; Ventura County Harbor District v. Board of Supervisors, 211 Cal. 271, 295 P. 6; Fairfield-Suisun Sewer District v. Hutcheon, supra.

Respondent's first contention is that sections 12850-12852 of the Public Utilities Code are in contravention of the Constitution of the State of California because they constitute a violation of the mandate of Article IV, Section 25, subdivision 33, that the legislature shall not pass any local or special laws where a general law can be made applicable. Respondent claims that the law is special because it only applies to districts which have owned and operated an electric distribution system for over eight years and have a population of over 250,000. Public Utilities Code, sec. 12850. The law is not Special in the sense that it refers to the Sacramento Municipal Utility District. A law to be general in its scope need not include all classes. An act which applies uniformly to any single class in its entirety when the class is founded upon some natural intrinsic or constitutional classification is not special legislation. In re Sutter-Butte By-Pass Assess. No. 6, 191 Cal. 650, 671, 218 P. 27.

As was said in Sacramento Municipal Utility District v. Pacific Gas and Electric Company, 20 Cal.2d 684, at page 693, 128 P.2d 529, at page 534:

'* * * None of those constitutional principles is violated if the classification of persons or things affected by the legislation is not arbitrary and is based upon some difference in the classes having a substantial relation to the purpose for which the legislation was designed. County of San Bernardino v. Way, 18 Cal.2d 647, 117 P.2d 354; Powers Farms v. Consolidated Irr. Dist., 19 Cal.2d 123, 119 P.2d 717. A law to be general in its scope need not include all classes of individuals in the state. Nor is a classification void because it does not embrace within it every other class which might be included. Heron v. Riley, 209 Cal. 507, 289 P. 160; Powers Farms v. Consolidated Irr. Dist., supra. Wide discretion is vested in the Legislature in making the classification and every presumption is in favor of the validity of the statute; the decision of the Legislature as to what is a sufficient distinction to warrant the classification will not be overthrown by the courts unless it is palpably arbitrary and beyond rational doubt erroneous. In re Weisberg, 215 Cal. 624, 12 P.2d 446; Rainey v. Michel, 6 Cal.2d 259, 57 P.2d 932, 105 A.L.R. 148; Gillum v. Johnson, 7 Cal.2d 744, 62 P.2d 1037, 63 P.2d 810, 108 A.L.R. 595; Natural Milk, etc., Ass'n v. City and County of S. F., 20 Cal.2d 101, 124 P.2d 25. A distinction in legislation is not arbitrary if any set of facts reasonably can be conceived that would sustain it.'

In the instant case it cannot be held that the classification 'is palpably arbitrary and beyond rational doubt erroneous.' The statute permits only utility districts which have operated an electric distribution system for eight years and which have a population in excess of 250,000 to issue bonds in accordance with the provisions of the Revenue Bond Law of 1941 for the purpose of constructing hydroelectric generation facilities and associated transmission facilities required to deliver the power and energy generated by such facilities to 'load center.' It is common knowledge that such facilities are expensive. It is reasonable to assume that only populous districts could assure the necessary revenues to finance the cost of such projects. The fact that the legislature limited the application of the statute to districts which have owned and operated a distribution system for eight years may have been due to a determination that a district should have experience in the distribution of electric power before it was allowed to integrate its system or it may have been due to a determination that the electorate should have a chance to judge the operation of the system before large expenditures for the development of hydroelectric facilities be incurred.

Respondent next attacks the validity of the legislation upon the ground that the subject of the act is not expressed in its title. The legislation was added by Statutes of 1955, Chapter 1268,...

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