Southern Gulf Utilities, Inc. v. City of North Miami Beach, 75--207
| Decision Date | 25 November 1975 |
| Docket Number | No. 75--207,75--207 |
| Citation | 323 So.2d 669 |
| Parties | SOUTHERN GULF UTILITIES, INC., a Florida Corporation, Appellant, v. CITY OF NORTH MIAMI BEACH, a Municipal Corporation of the State of Florida, Appellee. |
| Court | Florida District Court of Appeals |
Walton, Lantaff, Schroeder, Carson & Wahl and William J. Gray, Miami, for appellant.
Joseph Nazzaro, City Atty., for appellee.
Before PEARSON and NATHAN, JJ. and HALL, VINCENT T., Associate Judge.
HALL, VINCENT T., Associate Judge.
Appellant, Southern Gulf Utilities, Inc., appeals from a final declaratory judgment in favor of the Appellee, City of North Miami Beach, finding that the City of North Miami Beach does have the exclusive power and authority to determine, change, and or readjust its water rates or charges from time to time. 1 The trial Court further held that City Ordinance No. 74--11, adopted and approved by the City of North Miami Beach on the 18th day of June, 1974, establishing a new water rate schedule of Fifty Cents per one thousand gallons, was legal, valid and proper; and therefore binding upon Southern Gulf Utilities, Inc.
The record of the trial Court discloses that Chapter 26054, Special Acts of Florida, became effective May 17th, 1949. By the terms of the Act, the City of North Miami Beach was empowered with authority to create, own, and operate a waterworks system in and surrounding the City. It was also empowered with authority to set and collect uniform rates for providing water, and 'Readjust such rates or charges from time to time.'
Om July 14, 1964, Southern Gulf Utilities, Inc., and the City of North Miami Beach entered into a contract for the supply of water to Southern Gulf Utilities, Inc., by the City waterworks system created under the provisions of Chapter 26054, Special Acts of Florida. The terms of the contract provided that the City of North Miami Beach would agree to supply water to Southern Gulf Utilities, Inc., at a rate of Twenty-eight Cents per 1,000 gallons of water. The contract did not provide for a time limit, and it would appear that the City was bound by the terms of the contract ad infinitum.
On July 18, 1974, the City of North Miami Beach adopted Ordinance No. 74--11 establishing a new uniform rate schedule of Fifty Cents per 1,000 gallons of water applicable to all bulk users of water, including Southern Gulf Utilities, Inc. The express purposes of the Ordinance were to prevent default in City bonds, provide adequate revenue to operate the system, upgrade the City's water system, and conserve precious palatable water.
Southern Gulf Utilities, Inc., contends that the City of North Miami Beach, even though a Municipality, is bound by the terms and conditions of the contract entered into by the parties on July 14th, 1964, and that there is no evidence that the City of North Miami beach made a determination that the increase in the water rate as reflected by City Ordinance 74--11 bore any relationship to the cost of water or its distribution to the bulk users, such as Southern Gulf Utilities, Inc.,
The salient questions confronting this Court are:
(1) Whether the Municipality is bound by the terms of the Contract for an indefinite term, thereby preventing any future City Commission from exercising the authority and power conferred upon it by a special act of Florida, in effect at the time of the execution of the contract.
(2) Whether the Municipality may, by Ordinance, arbitrarily change a rate set by contract without a showing that the rate change is reasonable, i.e., bearing some relation to the costs, reserves, and other related items incurred in the operation of...
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