State ex rel. Helena Housing Authority v. City Council of City of Helena
| Decision Date | 29 March 1952 |
| Docket Number | No. 9185,9185 |
| Citation | 125 Mont. 592,242 P.2d 250 |
| Parties | STATE ex rel. HELENA HOUSING AUTHORITY v. CITY COUNCIL OF CITY OF HELENA et al. |
| Court | Montana Supreme Court |
Loble & Loble, and Gene A. Picotte, all of Helena, for appellant.
David R. Smith, Paul T. Keller, Helena, for respondent.
Original Proceeding. The relator is a public corporation, organized under the provisions of R.C.M.1947, Secs. 35-101 to 35-146, and exercising the powers and performing the duties provided therein. The respondents are the mayor and commissioners who are the legally constituted city council of the city of Helena, a city of the first class and a municipal corporation organized and existing under the provisions of Chapter 31, Title 11, R.C.M.1947.
On November 25, 1949, the Helena Housing Authority applied to the Public Housing Administration of the United States for a reservation of urban low-rent public housing and for a preliminary loan of $24,000. The 1949 amendments to the Housing Act of 1937 prescribed the pre-requisites necessary for the approval of such applications:
'In recognition that there should be local determination of the need for low-rent housing to meet needs not being adequately met by private enterprise----
(a) The Administration shall not make any contract with a public housing agency for preliminary loans (all of which shall be repaid out of any moneys which become available to such agency for the development of the projects involved) for surveys and planning in respect to any low-rent housing projects initiated after March 1, 1949, (i) unless the governing body of the locality involved has by resolution approved the application of the public housing agency for such preliminary loan; and (ii) unless the public housing agency has demonstrated to the satisfaction of the Administration that there is a need for such low-rent housing which is not being met by private enterprise; and
'(b) the Administration shall not make any contract for loans (other than preliminary loans) or for annual contributions pursuant to this chapter with respect to any low-rent housing project initiated after March 1, 1949, (i) unless the governing body of the locality involved has entered into an agreement with the public housing agency providing for the local cooperation required by the Administration pursuant to this chapter; and (ii) unless the public housing agency has demonstrated to the satisfaction of the Administration that a gap of at least 20 per centum has been left between the upper rental limits for admission to the proposed low-rent housing and the lowest rents at which private enterprise unaided by public subsidy is providing (through new construction and available existing structures) a substantial supply of decent, safe, and sanitary housing toward meeting the need of an adequate volume thereof.' U.S. Housing Act of 1937, as amended, Sec. 15(7), 42 U.S.C.A. Sec. 1415(7).
In compliance with these requirements the City Council of the City of Helena on December 5, 1949, adopted resolution 3883 as follows:
'Whereas, the Housing Authority of Helena, Montana, is applying to the Public Housing Administration in accordance with the provisions of the United States Housing Act of 1937, as amended, for a preliminary loan in the amount of $24,000.00, to cover the costs of surveys and planning in connection with the development of not to exceed approximately 60 dwelling units of low-rent public housing; and
'Whereas, there exists in the City of Helena, Montana, a need for such low-rent public housing, at rents within the means of low-income families, especially families of living or deceased veterans and servicemen, which need is not being met by private enterprise; and
'Whereas, such a condition constitutes a menace to the health, safety, morals and welfare of the inhabitants of the City:
'Now, Therefore, Be It Resolved by the City Council of the City of Helena, Montana:
'That the City Council of the City of Helena, Montana, does hereby approve the Application of the Housing Authority of Helena, Montana, to the Public Housing Administration for a Preliminary Loan in an amount not to exceed $24,000.00, to cover the costs of surveys and planning in connection with the development of not to exceed approximately 60 dwelling units of low-rent public housing in the City of Helena, Montana; and does hereby declare its intent to enter hereafter into an agreement with said Housing Authority for local cooperation by the City in the provision of said low-rent public housing which may be required by the Public Housing Administration pursuant to the United States Housing Act of 1937, as amended.'
On January 3, 1950, the Public Housing Administration approved the application for a preliminary loan of $24,000 subject to the approval of the President of the United States, and made a Program Reservation for 60 dwelling units to the Helena Housing Authority. The President gave his approval on February 15, 1950.
On February 24, 1950, the relator and the Public Housing Administration entered into a preliminary loan contract and $24,000 was allocated and of that sum $4,800 was advanced to the relator for immediate use in preliminary surveys and planning. Before any further advances could be made the preliminary loan agreement required that the City Council of the City of Helena enter into a satisfactory cooperation agreement providing for local cooperation required by 42 U.S.C.A. Sec. 1415(7)(b)(i), supra; and that any legal question affecting the power of the local authority to enter into an annual contributions contract be disposed of.
Accordingly on February 24, 1950, the city attorney of the city of Helena gave an official opinion that resolution No. 3883 'was duly and legally adopted by the City Council of the City of Helena, Montana, and that said City Council had legal authority to pass said Resolution and that said Resolution is in full force and effect.'
On February 27, 1950, the relator and the city of Helena entered into a cooperation agreement which contained the usual covenants that the city would provide the residents of the housing area with public services including educational facilities, police, fire and health protection; that the city would vacate such streets, roads and alleys within the area as might be necessary to its development and 'insofar as the City may lawfully do so, grant such waivers of the building code of the City as are reasonable and necessary to promote economy and efficiency in the development and administration of such Project; and make such changes in any zoning of the site and surrounding territory of such project as are reasonable and necessary;' and 'cooperate with the Local Authority by such other lawful action or ways as the City and Local Authority may find necessary in connection with the development and administration of such project.'
By the terms of the cooperation agreement the city and the Helena Housing Authority jointly agreed that 'so long as any contract between the Local Authority and the P.H.A. for loans (including preliminary loans) or annual contribution, or both, with respect to any project shall remain in force and effect, or so long as any bonds issued in connection with such project shall remain outstanding, this agreement shall not be abrogated, changed, or modified without the consent of the P.H.A..'
Relying on the cooperation agreement and resolution No. 3883, the Helena Housing Authority made the necessary surveys and plans and completed arrangements to carry out the terms of the agreement with the Public Housing Administration.
On December 27, 1951, bids for the construction of the 60 dwelling units were called for. On January 23, 1952, the bids were opened and the general construction contract was awarded to Palmer Construction Company, Great Falls, Montana, the lowest bidder. Other contracts for work in connection with the construction were also awarded so that the relator assumed contingent obligations in excess of $500,000.
On January 22, 1952, the City Council of the City of Helena first passed ordinance No. 1455. This ordinance was finally passed and duly adopted on January 29, 1952. Ordinance No. 1455 provides that no extension, construction, enlargement or addition to or of any housing units shall be made under the authority of the Housing Authority Law, R.C.M.1947, Secs. 35-101 to 35-146, unless the same shall be submitted to the electors of the city of Helena, Montana, and receive an affirmative vote in favor thereof.
Subsequently on February 11, 1952, the city of Helena first passed and on February 18, 1952, finally passed and approved ordinance No. 1456. Section 1 of this ordinance declares: 'That the cooperative agreement between the Helena Housing Authority or Public Housing Agency and the City of Helena, Montana, dated the 27th day of February, 1950, be, and the same is hereby cancelled and set aside, and that the same shall not be carried out by the City of Helena, Montana.' The ordinance also provides in section 1 that no further cooperative agreements shall be entered into unless the proposal has been submitted to the voters of the city of Helena and approved by them. Section 2 is in substance a local declaration of the requirements of 42 U.S.C.A. Sec. 1415(7)(a)(ii), (b)(ii), that no low-rent housing construction shall be approved unless the Helena Housing Authority has demonstrated that there is a local need for low-rent housing which is not being met by private enterprise and that a gap of at least twenty per cent. has been left between the upper rental limits for admission to the housing units and the lowest rent at which private enterprise can provide decent, safe and sanitary housing. Then there is this additional requirement, 'and, unless there has been an affirmative vote of a majority of the electors of the city of Helena, Montana, at any election for that purpose.'
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