State ex rel. Water Development Authority v. Northern Wayne County Public Service Dist.

• Decision Date: 27 October 1995
• Docket Number: No. 22965,22965
• Citation: 464 S.E.2d 777,195 W.Va. 135
• Court: West Virginia Supreme Court
• Parties: STATE of West Virginia ex rel. WATER DEVELOPMENT AUTHORITY, a Governmental Instrumentality and Public Body Corporate of the State of West Virginia, Petitioner v. NORTHERN WAYNE COUNTY PUBLIC SERVICE DISTRICT, a Governmental Instrumentality of the State of West Virginia and the Public Service Commission of West Virginia, Respondents.

Page 777

464 S.E.2d 777

195 W.Va. 135

STATE of West Virginia ex rel. WATER DEVELOPMENT AUTHORITY a Governmental Instrumentality and Public Body Corporate of the State of West Virginia, Petitioner v. NORTHERN WAYNE COUNTY PUBLIC SERVICE DISTRICT, a Governmental Instrumentality of the State of West Virginia and the Public Service Commission of West Virginia Respondents.

No. 22965.

Supreme Court of Appeals of West Virginia.

Submitted Sept. 12, 1995.

Decided Oct. 27, 1995.

Syllabus by the Court

1. "A statute that is ambiguous must be construed before it can be applied." Syl. pt. 1, Farley v. Buckalew, 186 W.Va. 693, 414 S.E.2d 454 (1992).

2. " 'The primary object in construing a statute is to ascertain and give effect to the intent of the Legislature.' Syllabus Point 1, Smith v. State Workmen's Compensation Commissioner, 159 W.Va. 108, 219 S.E.2d 361 (1975)." Syl. pt. 2, Farley v. Buckalew, 186 W.Va. 693, 414 S.E.2d 454 (1992).

3. " ' " 'A statute should be so read and applied as to make it accord with the spirit, purposes and objects of the general system of law of which it is intended to form a part; it being presumed that the legislators who drafted and passed it were familiar with all existing law, applicable to the subject matter, whether constitutional, statutory or common, and intended the statute to harmonize completely with the same and aid in the effectuation of the general purpose and design thereof, if its terms are consistent therewith.' Syllabus Point 5, State v. Snyder, 64 W.Va. 659, 63 S.E. 385 (1908)." Syl. pt. 1, State ex rel. Simpkins v. Harvey, W.Va. 305 S.E.2d 268 (1983).' Syl.Pt. 3, Shell v. Bechtold, 175 W.Va. 792, 338 S.E.2d 393 (1985)." Syl. pt. 1, Lee v. West Virginia Teachers Retirement Board, 186 W.Va. 441, 413 S.E.2d 96 (1991).

4. "W.Va.Code, 24-2-3 (1983), clearly and unambiguously gives the Public Service Commission the power to reduce or increase rates whenever it finds that the existing rate is unjust, unreasonable, insufficient, or unjustly discriminatory or otherwise in violation of any provision of W.Va.Code, 24-1-1, et seq." Syl. pt. 2, Central West Virginia Refuse, Inc. v. Public Service Commission, 190 W.Va. 416, 438 S.E.2d 596 (1993).

5. W.Va.Code, 22C-1-7 [1994] authorizes the Water Development Authority to directly impose on a public service district, which operates a public utility as defined in W.Va.Code, 24-1-2 [1979], "in its own name and for its own benefit service charges determined by it to be necessary" when the public service district defaults on a loan made by the Water Development Authority to the public service district. However, the Water Development Authority's power to impose such service charges upon the public service district which operates a public utility is subject to the regulatory review and approval of the Public Service Commission pursuant to W.Va.Code, 24-2-1 [1991].

6. "A writ of mandamus will not issue unless three elements coexist--(1) a clear legal right in the petitioner to the relief sought; (2) a legal duty on the part of respondent to do the thing which the petitioner seeks to compel; and (3) the absence of another adequate remedy." Syl. pt. 2, State ex rel. Kucera v. City of Wheeling, 153 W.Va. 538, 170 S.E.2d 367 (1969).

James K. Brown and John Philip Melick, Jackson & Kelly, Charleston, for Petitioner.

Robert R. Rodecker and Jerri F. Heiskell, Charleston, for Respondent Northern Wayne County Public Service District.

Meyishi P. Blair, Charleston, for Respondent Public Service Commission of West Virginia.

McHUGH, Chief Justice:

The Water Development Authority (hereinafter "WDA") seeks a writ of mandamus to compel the Northern Wayne County Public Service District (hereinafter "Public Service District") to impose a tap fee of $2,750.00 even though the Public Service Commission (hereinafter "PSC") ordered the Public Service District to reduce the $2,000.00 tap fee to $250.00. For reasons set forth below, we decline to issue a writ of mandamus.

I

One of the WDA's responsibilities is to improve the public water and sewer service throughout the State. See W.Va.Code, 22C-1-2 [1994]. Pursuant to this responsibility the WDA "may make loans and grants to governmental agencies for the acquisition or construction of water development projects by such governmental agencies[.]" W.Va.Code, 22C-1-5 [1994]. ¹ In order to be able to make loans to governmental agencies, such as the Public Service District, the WDA issues bonds which it repays from revenue collected from the local projects. W.Va.Code, 22C-1-5 [1994] and 22C-1-9 [1994]. When issuing its bonds the WDA agrees to impose all statutory rights, including the right to increase service charges, in order to ensure that the bonds are paid when a local borrower cannot make its loan repayment. W.Va.Code, 22C-1-7 and 12 [1994].

In the case before us, the WDA states it entered into a loan agreement and a supplemental loan agreement, both dated March 16, 1989, with the Public Service District. The proceeds from the loans were to be used by the Public Service District to construct a public sewer system.

The Public Service District must be able to pay for its own expenses including repayment of the loan made by the WDA. See W.Va.Code, 16-13A-9 [1994] and W.Va.Code 22C-1-5 [1994]. However, in the case before us, the Public Service District has been unable to make payments on the debt owed to the WDA. Thus, the WDA requested the Public Service District to impose a higher tap fee (connection fee) in order to rectify the Public Service District's problem in repaying the WDA.

The Public Service District complied with the WDA's request by filing a proposed increase of its tap fee from $250.00 to $2375.00 with the PSC on February 24, 1992. The PSC entered an order dated June 3, 1992, establishing a $2000.00 tap fee on an interim basis pending the establishment of a permanent tap fee in the Public Service District's upcoming permanent rate case. The order further directed that all tap fees of $2000.00 collected pursuant to the June 3, 1992 order would be subject to refund depending on how the permanent rate case was decided. The PSC instructed the Public Service District to file for a general rate case as soon as possible because the PSC's longstanding policy has been that tap fees are not to be cost based. Instead, the tap fee merely represents some contribution by the customer to defray the costs of installing service connections. The WDA participated in the action before the PSC as an intervenor.

On October 13, 1992, the Public Service District filed a general rate case seeking, inter alia, an increase in its rates by 11.5% and the imposition of a tap fee of $2375.00. On February 25, 1993, an administrative law judge of the PSC approved a $2000.00 tap fee and an 11% increase in rates. However, by an order dated March 26, 1993, the PSC reduced the tap fee approved by the administrative law judge to $250.00 reiterating its policy that tap fees are not to be cost based because high tap fees discourage individuals from using a sanitary sewer system. Additionally, the PSC increased the Public Service District's rate to the requested 11.5%. The WDA fully participated in this action before the PSC as an intervenor.

On June 1, 1993, this Court denied the petition for appeal of the PSC's March 26, 1993 order. The WDA participated in the action before this Court.

Subsequently, because the Public Service District was still unable to repay the loan to the WDA, the WDA, by a letter dated October 24, 1994, directed the Public Service District to immediately increase its tap fee to $2,750.00. In response, the Public Service District filed a petition with the PSC on December 21, 1994, seeking to immediately increase its tap fee from $250.00 to $2,750.00. The PSC, in an order dated April 19, 1995, again restated its policy regarding tap fees and rejected the Public Service District's request. The PSC encouraged the Public Service District to file a general rate case in order to rectify the Public Service District's problem of repaying the loans to the WDA. ² The order also indicated that the PSC was not ruling out an increase in the tap fee. The WDA did not participate in the action leading up to the April 19, 1995 order of the PSC.

On June 21, 1995, the WDA filed the petition for a writ of mandamus which is currently before us alleging that the Public Service District should be compelled to impose a $2750.00 tap fee because it has authority to impose a service charge on defaulting districts pursuant to W.Va.Code, 22C-1-7 [1994] regardless of the PSC's orders. The WDA maintains that if it does not have the authority to require the Public Service District to impose the tap fee, it will have to include the uncertainty of its authority to enforce debt payment in the official statement required by the Securities and Exchange Commission which will reflect unfavorably on the integrity of the bonds it issues.

II

The issue before us is whether the WDA's authority pursuant to W.Va.Code, 22C-1-7 [1994] to impose service charges on projects it funds when the projects' owners are in default on WDA loans is subject to the regulatory review and approval of the PSC. For reasons explained below, we find that the WDA's authority is subject to the regulatory review and approval of the PSC.

The dispute in the case before us centers on the following language found in W.Va.Code, 22C-1-7 [1994], in relevant part: ³

In order to ensure that the public purposes to be served by the [WDA] may be properly carried out and in order to assure the timely payment to the [WDA] of all sums due and owing under loan agreements with governmental agencies ... notwithstanding any provision to the contrary elsewhere contained in this code, in event of any default by a governmental agency under such a loan agreement, the [WDA] has, and may, at its option, exercise the following rights and remedies in addition to the rights and...