Skidmore v. City of Elizabethtown

• Decision Date: 25 May 1956
• Citation: 291 S.W.2d 3
• Parties: H. F. SKIDMORE, Individually as a Citizen, Resident & Taxpayer of the City of Elizabethtown, etc., Appellant, v. CITY OF ELIZABETHTOWN, a Municipal Corporation of the Fourth Class, Appellee.
• Court: United States State Supreme Court — District of Kentucky

Page 3

291 S.W.2d 3

H. F. SKIDMORE, Individually as a Citizen, Resident & Taxpayer of the City of Elizabethtown, etc., Appellant, v. CITY OF ELIZABETHTOWN, a Municipal Corporation of the Fourth Class, Appellee.

Court of Appeals of Kentucky.

May 25, 1956.

L. A. Faurest, J., Elizabethtown, for appellant.

Robert N. Hubbard, City Atty., Elizabethtown, Jeseph R. Rubin, Louisville, for appellee.

CULLEN, Commissioner.

In a declaratory judgment action brought by a citizen and taxpayer, suing in a representative capacity, against the City of Elizabethtown, the court upheld the validity of an ordinance of the city providing for the issuance of revenue bonds to finance the acquisition and construction of additional on-street and off-street parking facilities, the bonds to be secured by a pledge of the revenues from existing and subsequently acquired on-street parking meters and off-street parking lots. The plaintiff has appealed.

The ordinance purports to combine the on-street and off-street parking facilities into a single 'public project' KRS Ch. 58, and it provides for the issuance of $115,000 in bonds to pay the cost of additons to the facilities. The bonds are to be payable solely fromt he vrevenants to maintain existing meters city covernants to maintain existing meters and charges, subject to the right to make changes in location of on-street parking meters where made necessary by street relocations or readjustment of traffic regulations controls. Provision is made for a receiver in the event of default, who would have authority to fix parking charges and collect them for payment of the bonds.

There is specific statutory authority for the cation which the city is proposing to take. KRS 82.050. Therefore, the questions presented relate only to constitutionality.

The primary question is whether the proposed bond issue would create a debt of the city in violation of Section 157 of the Constitution of Kentucky. The pertinent provision of that section is that no city 'shall be authorized or permitted to become indebted, in any manner or for any purpose, to an amount exceeding, in any year, the income and revenue provided for such year, without the assent of two-thirds of the voters.' Of course, the bond ordinance specifically states that the bonds shall not constitute a debt of the city, but this recitiation would not control if in reality the effect of the bonds was to create a debt within the meaning of the Constitution.

In those instances in the past where revenue bonds issued by a governmental unit have been upheld by this Court, the revenue pledged to the payment of the bonds has always been something other than tax revenue. It has consisted of the revenue from such types of things as recreational facilities McKinney v. City of Owensboro, 305 Ky. 254, 203 S.W.2d 24; utilities, Williams v. City of Barbourville, Ky., 246 S.W.2d 591; or toll roads, Guthrie v. Curlin, Ky., 263 S.W.2d 240. Usually, the revenue is paid by persons who receive some incividual benefit or service some individual general benefits or service all citizens receive from organized government. Even in the school building revenue bond cases, the revenue pledged is rental payments. It is true that the rental payments come from tax money, but the tax money as such is not pledged--only the rentals actually received.

The objection to a pledge of future tax revenues for the payment of an obligation rests in the fact that present government, by making the pledge, appropriates revenue source which otherwise could have been depended upon with certainty by future government for general governmental purposes. See Curlin v. Wetherby, Ky., 275 S.W.2d...