State ex rel. City of Charleston v. Hutchinson
| Decision Date | 29 September 1970 |
| Docket Number | No. 12994,12994 |
| Court | West Virginia Supreme Court |
| Parties | STATE ex rel. the CITY OF CHARLESTON, etc., et al. v. John G. HUTCHINSON, Treasurer, etc. |
Syllabus by the Court
1. A city treasurer is held to a higher standard of liability for public trust funds in his custody than ordinary fiduciaries.
2. A municipal corporation has only the powers granted to it by the legislature, and any such power it possesses must be expressly granted to necessarily or fairly implied or essential and indispensable. If any reasonable doubt exists as to whether a municipal corporation has a power, the power must be denied.
3. 'When the general law of the state has so dealt compresensively with the subject matter of a municipal ordinance, the general law is dominant and controlling and the ordinance is invalid and unenforceable, in the absence of specific authority conferred by the legislature.' Pt. 2, syllabus, State ex rel. Constanzo v. Robinson, Judge, 87 W.Va. 374, 104 S.E. 473.
4. 'Though on-street parking meters were designed to aid in the control and regulation of traffic on the public streets of municipalities, and may be erected and maintained in the valid exercise of the police power, under Section 32, Article VIII, Chapter 40, Acts of the Legislature, First Extraordinary Session, 1933, and fees may be charged for using the parking meters to defray the expenses of the regulatory service, a municipality may not devote the use of the meters to purely revenue-raising purposes.' Pt. 8, syllabus, State ex rel Bibb v. Chambers, 138 W.Va. 701, (77 S.E.2d 297).
B. Duffy Horan, City Sol., Cleo S. Jones, Charleston, W.Va., for relators.
Mario J. Palumbo, George A. Daugherty, Charleston, W. Va., for respondent.
This is an original proceeding in mandamus instituted under the original jurisdiction of this Court in which the City of Charleston, a municipal corporation, and Elmer H. Dodson, its Mayor, petitioners herein, seek to compel John G. Hutchinson, Treasurer of the City of Charleston, to transfer the token sum of $10,000 from the Parking System Revenue Fund to the general fund of the City of Charleston, from which it could be used for municipal purposes other than those connected with the operation of the parking system. The total amount involved is actually $100,000 which the petitioners desire to have transferred from the Parking System Revenue Fund to the general fund of the City.
The petition was filed on July 21, 1970 and a rule was issued returnable September 2, 1970 at the Regular September Term of this Court, at which time it was submitted for decision on arguments and briefs.
The Controversy in this case arose over the attempt by the petitioners to withdraw a surplus accumulated in the Parking System Revenue Fund above the money needed for the current operation and current sinking fund requirements of the bonds with which the parking facilities were originally constructed. The details of the system were originally set up by a City Ordinance.
Prior to 1965 it appears that most of the parking facilities were ordinary parking meters in most instances located on streets and commonly called 'on-street' parking facilities. About that time it was decided to add to the parking facilities several tracts of land at different places in the City, most of which were in the vicinity of the City Hall, in which metered 'off-street' parking could be accommodated. In order to finance these 'off-street' parking facilities, Ordinance No. 794 was adopted by the City on September 7, 1965, and Ordinance No. 843 was adopted on May 19, 1966. The second Ordinance was for extension or addition to the system created by the first Ordinance. The method of financing the construction was by the issuance of revenue bonds which depend for their payment upon the revenue to be derived from the parking system, thereby avoiding the pledging of the general credit of the City, which would have required the submission of a bond issue question to the vote of the citizens of the City.
The method authorizing the issuance of Parking Revenue Bonds in 1965 and 1966 was contained in Article 4A of Chapter 8 of the Code of West Virginia, which has since been amended but is still similar. The statutes applicable to this case are now in Articles 13 and 16 of Chapter 8 of the Code of West Virginia, as amended.
Under the first Ordinance, referred to above, $420,000 worth of bonds were issued, and under the second Ordinance $295,000 more were issued under almost identical conditions as set up by the first Ordinance. By these Ordinances the entire 'on-street' and 'off-street' parking facilities of the City were combined into one unit known as the Parking System. Money derived from the sale of the bonds was to be deposited in a completely separate special fund called 'Construction Trust Fund', which as its name implies could be used only for acquisition of facilities and construction thereof, and the gross revenues of the system were to be deposited in a special fund called 'Parking System Revenue Fund'. It is with the Parking System Revenue Fund that we are concerned in this proceeding since it is the only one of the two funds that can accumulate a surplus if the income is greater than all payments required at any given time to be made under the law. The Construction Trust Fund was at its inception confined largely to the expenditures of the construction, except for small amounts deposited from the Fund into the State Sinking Fund to pay interest on the bonds until the system could produce revenues sufficient to take over this obligation and any left over amounts were by the Ordinances to be deposited in the Sinking Fund reserve account.
The first Ordinance adopted by the City set up a priority system of distribution of money coming into the Revenue Fund which would be money paid in by the users of the parking facilities. This system may be summarized as follows, using the outline letters of the Ordinance for easy comparison:
A. Payment of operating expenses of the Parking System with an additional amount to be placed in a reserve 'Operation and Maintenance Fund' for use in the ensuing fiscal year.
B. Payment to the State Sinking Fund of monthly amounts, which will accumulate into the total semi-annual interest payments and accumulate into the total of the next yearly payment due on the principal of the bonds which come due from 1967 to 1995, and also payment into the Sinking Fund of certain amounts necessary to cover the fiscal charges for handling the bond payments.
C. Payment into the Sinking Fund of a monthly amount to accumulate into a 'Reserve Account' eventually covering the principal and interest that will be due in any two ensuing fiscal years.
D. Payments into a 'Renewal and Replacement Fund', which shall be used for extensions, improvements and replacements of capital assets which payments are to be deposited in a bank with no future payments necessary after the fund reaches $20,000.
E. If the revenues are insufficient to meet the above payments the deficiency is to be made up with subsequent payments.
The F. Clause provides that: '* * * the balance of any moneys remaining in the Revenue Fund, after all payments provided for above have been made, may be used by the City for the purpose of paying the cost of additions, extensions or improvements to, or the replacement of capital assets of the Parking System, or for the redemption or purchase of the last maturing Bonds then outstanding at prices not exceeding the then redemption price of such Bonds, Or may be withdrawn by the City and used for any lawful purpose: * * *'. (Emphasis supplied) This Clause is not to be effective unless all of the A to D obligations have been satisfied.
The G and H Clauses provide that all of the Funds mentioned therein shall be trust funds and used for no other purpose and provide for the investment of the extra funds. Clause F of the distribution system set up by the City Ordinance is the part of the Ordinance that we are concerned with in this proceeding.
In the summer of 1970 the City authorities discovered that the Parking System Revenue Fund contained about $140,000 of which about $30,000 was required to be paid into the Reserve Account, and about $10,000 into the Renewal and Replacement Fund....
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