State v. City of Jacksonville

• Decision Date: 22 July 1947
• Citation: 159 Fla. 328,31 So.2d 385
• Parties: STATE v. CITY OF JACKSONVILLE et al.
• Court: Florida Supreme Court

31 So.2d 385

159 Fla. 328

STATE v. CITY OF JACKSONVILLE et al.

Florida Supreme Court

July 22, 1947

Appeal from Circuit Court, Duval County; A. D. McNeill judge.

William A Hallowes, III, of Jacksonville, for appellant.

William M Madison, of Jacksonville, for appellee.

TERRELL, Justice.

The City of Jacksonville owns and operates its electric plant and distribution system, hereinafter referred to as its municipal electric system. It became necessary to construct improvements, replacements and extensions to its municipal electric system to meet the expanding necessities of the city. Pursuant to this demand the city enacted Ordinance AA-357, authorizing these improvements, replacements and extensions, and providing for the issuance of $15,000,000 in revenue certificates payble solely from the revenues derived from the operation of the municipal electric system to finance the cost of said improvements. At an election called for that purpose as required by Chapter 21318, Sp. Acts of 1941, the qualified electors of the city approved the issuance of said certificates by a vote of approximately four to one.

The record discloses that for the past five years, the average annual net revenue of of the Municipal Electric System after paying operating expenses, including principal and interest on outstanding certificates of like kind, is $3,074, 186.74, and that an average of $318,656.23 in additional net revenues has been used in a depreciation and reserve account, that said amount is greatly in excess of the amounts necessary to retire principal, interest and maturities of the proposed Electric Revenue Certificates. It is further shown that the foregoing amounts will be supplemented annually by net revenues received from the city's waterworks and municipal docks so as to aggregate $3,340,551.08 and $327,856.21 respectively, which sums are far in excess of that required to pay the principal and interest of all outstanding bonds and electric revenue certificates, including the proposed issue of electric revenue certificates.

A petition to validate the $15,000,000 in electric revenue certificates was filed, order to show cause was issued, service and publication of the order was duly made, answer was filed and an intervening taxpayer filed objections to the validation. A motion to strike the answer and the objections of the taxpayer was granted and a final decree validating the certificates was issued. This appeal is from the decree of validation.

It is first contended that the proposed issue of electric revenue certificates are bonds within the contemplation of Section 6, Article IX of the Constitution and can be issued only after an approving vote of the freeholders.

We find no merit to this contention. The chancellor found that these certificates do not come within the purview of Section 6, Article IX of the Constitution of Florida, that they were not bonds or general obligations of the City of Jacksonville, but that they were certificates of indebtedness secured solely by the net revenues of the city's municipal electric system and that no tax could be levied against the city or any property in the city to support them.

The record supports this finding. The electric revenue certificates are not a lien on any property of the city, their form is prescribed by Section 6 of Ordinance AA-357, which provides in terms that they are payable solely from a pledge of the net revenues derived from the operation of the electric system, that they are not an indebtedness of the city within any constitutional, statutory or charter limitation, and the holder expressly agrees when he takes them that he has no right to compel the exercise of the taxing power of the city for their payment. Section 9 of the ordinance carries similar provisions with reference to the coupons attached to the certificates. So there is no support whatever for this contention. See Brooks v. City of Jacksonville, 127 Fla. 564, 173 So. 365, wherein this Court affirmed the validation of electric revenue certificates similar to the ones in question.

Appellant further contends that the credit of the city is obligated for the support of these certificates by other provisions of the resolution and Ordinance AA-357, such as the pledge of the rate-making powers of the city, the...