Sossamon v. Greater Gaffney Metropolitan Utilities Area

• Decision Date: 23 March 1960
• Docket Number: No. 17631,17631
• Citation: 236 S.C. 173,113 S.E.2d 534
• Parties: F. W. SOSSAMON, Sr., et al., as Citizens and Taxpayers for Themselves and all other Citizens and Taxpayers similarity aggrieved, Appellants, v. GREATER GAFFNEY METROPOLITAN UTILITIES AREA et al., Respondents. Ex parte B. C. VASSY et al., as Commissioners of Public Works of the City of Gaffney, Intervenor-Appellants.
• Court: South Carolina Supreme Court

Page 534

113 S.E.2d 534

236 S.C. 173

F. W. SOSSAMON, Sr., et al., as Citizens and Taxpayers for

Themselves and all other Citizens and Taxpayers

similarity aggrieved, Appellants, v. GREATER GAFFNEY METROPOLITAN UTILITIES AREA et al., Respondents.

Ex parte B. C. VASSY et al., as Commissioners of Public

Works of the City of Gaffney, Intervenor-Appellants.

No. 17631.

Supreme Court of South Carolina.

March 23, 1960.

Wade S. Weatherford, Jr., Gaffney, for appellants.

Sinkler, Gibbs & Simons, Charleston, for intervenor-appellants.

J. Z. McKown, Gaffney, for respondents.

Odom, Nolen & Foster, Spartanburg, Grantham & Robinson, Easley, Rainey, Fant, Traxler & Horton, Greenville, Spencer & Spencer, Rock Hill, William H. Ehrhardt, Charleston, amici curiae.

OXNER, Justice.

This action was instituted by certain citizens and taxpayers of Cherokee County, some of whom live within and others without the corporate limits of the City of Gaffney, for the purpose of determining the constitutionality of Act No. 1042 of the 1958 Acts of the General Assembly, Aug. 27, 1957, 50 St. at L. 2195, as amended by Act No. 373 of the 1959 Acts of the General Assembly, May 28, 1959, 51 St. at L. 741. The case was heard by the Court below on the pleadings and an agreed statement of facts, resulting in an order upholding the constitutionality of this legislation. This appeal by the taxpayers followed. During the pendency of the appeal to this Court, the Commissioners of Public Works of the City of Gaffney were permitted to intervene and become parties to the action. The cities of Greenville, Spartanburg, Rock Hill, Charleston and Easley, claiming that their waterworks systems were vitally affected by some of the questions raised, sought and were granted permission to file a brief amicus curiae.

It is found in this Act that that part of Cherokee County lying outside of the corporate limits of the City of Gaffney has developed and expanded to the extent that some portions are now congested and inadequately served by water and sewerage facilities; that the public health, welfare and convenience require that such areas be furnished with these facilities; and that the Board of Public Works of the City of Gaffney can furnish the needed services to outside areas in the county if proper distribution systems are provided.

In order to provide water and sewerage facilities for these congested areas, the Act creates a body corporate to be known as the Greater Gaffney Metropolitan Utilities Area, embracing all of Cherokee County lying outside the present corporate limits of the City of Gaffney and the Town of Blacksburg, to be governed by five members appointed by the Governor on recommendation of the delegation from that County, which body is referred to as the Commission. There is a proviso that the Commission may contract with the Town of Blacksburg with regard to the inclusion of said municipality within the jurisdiction of the Commission.

The Commission is empowered to make surveys, investigate and determine what areas need the facilities and declare same to be congested sections. When so found, the Commission is authorized to specify the nature, type and extent of facilities needed and proceed with the construction of same from any funds available. In determining what areas need these facilities and the extent thereof, the Commission is to act in cooperation with the Board of Public Works of the City of Gaffney but the final determination rests with the Commission. When the Commission finds any area has existing facilities but such are insufficient or inadequate, it is authorized to replace or extent and enlarge same. When this is done, equitable adjustment is to be made with the Board of Public Works.

It is further provided:

'All facilities now or hereafter constructed within the Area, whether at the expense of the Commission or the City of the Board, shall be connected with and served by the present or future sources of water supply or sewer facilities, trunk or main line, disposal plants and other primary facilities of the City or Board, and the City and Board shall furnish all such facilities for all such systems as may now or hereafter be constructed within the Area.' (Section 10).

'The City and the Board shall maintain and keep in serviceable order all facilities now in existence or hereafter constructed within the Area, for which the City and Board shall be entitled to reasonable compensation from the water and sewer charges, respectively, accruing within the area.' (Section 11).

The amending Act states that 'the Commission and the Board of Public Works shall agree upon the reasonable pro rata share of the expenses of the operation of the plant facilities.' It further provides that the Board 'shall keep a separate account of all costs of construction, maintenance and service charges and, after deducting these items, shall pay the balance over to the county treasurer.'

Section 20 of the original Act is as follows:

'The rates to be charged for utilities services within the Area shall be fixed by the Commission, but with adequate provision for reimbursement to the County or the City and the Board for any amounts advanced by them, and for further construction, extension and expansion within the Area.'

In order to provide funds for construction and operation, the Act authorizes Cherokee County from its general funds to lend to the Commission the sum of $300,000.00. It further authorizes the Cmmission to issue bonds in an amount not exceeding $500,000.00 for the payment of which there is to be pledged the income from the facilities within the Area.

Finally, the Act provides:

'If the Commission at any time shall determine that it will be more advantageous to the Area to assume the entire operation of its own facilities, it is hereby vested with the authority to do so. If in accordance with this section the Commission assumes the entire operation of the facilities within the Area it shall make such annual adjustment or accounting with the City and the Board as may be equitable and just.' (Section 15).

'It is the intent and purpose of this act that the ownership of the facilities and of the income therefrom within the corporate limits of the City and within the Area shall ultimately be entirely separate and distinct, with the ownership thereof vested in the City and the Board and the Area, within their respective territories. All facilities and systems within the Area shall be the sole property of the Area, as a body politic and corporate, and shall be governed by the Commission, but shall be serviced and maintained by the City and the Board, with due allowance for the cost of maintenance and service, proportionate expense of plant facilities, maintenance fund and proportion of overhead to the City and the Board, and all remainder to be paid into the special fund herein provided.' (Section 19).

The Board of Public Works of the City of Gaffney was created by Act No. 389 of the 1907 Acts of the General Assembly, Feb. 19, 1907, 25 Stat. at Large, p. 808. Initially it was necessary to issue general obligation bonds of the city to defray the cost of the primary water facilities. For a time an ad valorem tax was levied to meet principal and interest requirements but later the revenues from the system became sufficient for this purpose. The stipulated facts show that approximately 25% of the water used is consumed by customers living outside the corporate limits. From this source the Board derives about one-third of its gross income from water. Those residing outside are charged a higher rate than those residing within the city. The cost of constructing outside lines has been borne by the individuals served. The only outlay by the Board has been the cost of furnishing engineering and supervisory service.

Counsel disagree as to whether the act contemplates compensation to the Board for use of its primary facilities. The Commission contends that it does. The Board of Public Works asserts that under the Act it is only to be reimbursed for costs in constructing lines in the area and maintaining them. We are inclined to the construction advanced by the Board. Be that as it may, counsel for the Commission frankly states in his brief, that as to services rendered outside the corporate limits, 'The Act cuts out profits of the City of Gaffney.'

While furnishing water by a city to its inhabitants is now, although not formerly, regarded as a proper municipal function, a city waterworks system has also been characterized as of a commercial nature. Green v. City of Rock Hill, 149 S.C. 234, 147 S.E. 346, 356. The Court there said:

'While in this state it is settled that the operation of water works by a municipality is so far governmental in...