Town of Williamsport v. Washington County Sanitary Dist.

• Decision Date: 30 June 1967
• Docket Number: No. 510,510
• Citation: 247 Md. 326,231 A.2d 40
• Parties: The TOWN OF WILLIAMSPORT v. WASHINGTON COUNTY SANITARY DISTRICT.
• Court: Maryland Court of Appeals

Page 326

247 Md. 326

231 A.2d 40

The TOWN OF WILLIAMSPORT v. WASHINGTON COUNTY SANITARY DISTRICT.

No. 510.

Court of Appeals of Maryland.

June 30, 1967.

H. Warren Buckler, Baltimore (Charles F. Wagaman and Wagaman, Wagaman, Meyers & Hauver, Hagerstown, on the brief), for appellant.

K. J. Mackley and Howard W. Gilbert, Jr., Hagerstown (Ottinger, Mackley & Gilbert, Hagerstown, on the brief), for appellee.

Before HAMMOND, C. J., and HORNEY, MARBURY, OPPENHEIMER, BARNES, McWILLIAMS and FINAN, JJ.

BARNES, Judge.

This is an appeal by the Town of Williamsport (Town) from a declaratory decree of the Circuit Court for Washington County (Rutledge, J.) ruling that the Town is bound by a contract made with the appellee, Washington County Sanitary District (District), to pay the sum of $50,000 and to furnish it certain services. By the contract, the District agreed to relocate a proposed sewage treatment plant from a location up-water and to the north of Williamsport on the Conococheague Creek to a location on the Potomac River below and to the southeast of Williamsport.

The Town of Williamsport is a municipal corporation exercising general municipal powers in a defined area in Washington County pursuant to a home rule charter adopted in 1957. The appellee District is an administrative agency of the County Commissioners of Washington County, created by Acts of 1957, ch. 694, as amended by Acts of 1961, ch. 743, to construct, maintain and operate sanitary facilities in subdistricts in Washington County established pursuant to such acts.

The facts of the case have all been stipulated.

In 1963, the District established a sanitary subdistrict in the developed portion of an area, known as Halfway, lying between Hagerstown and Williamsport and proceeded with plans for the construction of a sewer system and sewage treatment plant to serve the subdistrict. Upon completion of these plans, the District applied to the State Department of Health for a permit to construct a treatment plant which would discharge effluent into Conococheague Creek at a point one-half mile above the Town. This Creek runs through the Town from the north, emptying into the Potomac River just to the south of the Town. The Town maintains a large park and recreation area, known as River Park, along the banks of the Creek. Most of the residential area of the Town lies to the north, not far from the Creek.

The proposed sewage treatment plant, to be located just beyond the northern corporate limits of the Town, was designed to provide both primary and secondary treatment of the sewage flowing into the plant and was designed to serve the Halfway Subdistrict, all of which was outside the corporate limits of the Town.

Town officials believed that odors from the plant itself, odors from the effluent discharged into the Creek and sludge deposits on the park benches might damage the Town's residential area and its park.

Notice of application for the permit was duly published in the Hagerstown newspapers and, in timely fashion, the Town requested a hearing before the State Department of Health. Despite this request, the Department issued the permit without granting the Town a hearing. On January 7, 1964, the Town appealed the decision of the Department to the Circuit Court for Washington County, presumably pursuant to the authority of Maryland Code, Article 43, section 404 (1965 Repl. Vol.). After hearing argument, the court remanded the question of the issuance of the permit to the State Department of Health for further consideration.

Following the remand, a meeting was held with the Bureau of Environmental Hygiene of the Health Department. At this meeting, the Town proposed that the type and location of the proposed treatment plant be changed from a secondary type plant emptying into Conococheague Creek to a primary type plant located to the south of the Town and emptying into the Potomac River. The Department endorsed this proposal and encouraged the Town and the District to develop a solution along those lines. While subsequent meetings between the parties took place, the Town authorized a firm of consulting engineers to prepare a study of the alternate plan proposed by the Town, including especially a study of comparative costs between the proposal of the District and the alternate proposal of the Town. This report was submitted July 20, 1964.

The report points out that the proposed plant would serve none of the residents of the Town and that the Town's recently constructed sewage treatment plant was adequate to take care of its needs and could be expanded if necessary. The report further compared the costs of the original and alternate proposals, indicating that the construction cost to the District of the alternate plant would be greater by approximately $166,000, but that the operating cost would be substantially less, so that the net annual increase in cost to the District, including operation and debt amortization, would be approximately $3,100.

Despite the report and recommendations of the Town's consulting engineers, the controversy continued unresolved. During the course of numerous negotiating sessions, the County Commissioners of Washington County apparently agreed to absorb the cost of engineering for the proposed alternate plant, thereby reducing the increase in cost to the District to an estimated $144,000, with a corresponding reduction in annual operating and debt amortization charges.

It was not until December, 1964, that the negotiating parties reached an agreement which they were prepared to recommend and this agreement was embodied in a written instrument to be submitted to the governing bodies of the parties.

This instrument, which is at issue in the case, provides that the Town will pay the District the sum of $50,000 toward the increased cost of constructing the District's treatment plant at the alternate site and will, in addition, provide the services of an employee at the new plant for approximately 800 hours per year. In consideration of these agreements, the District agreed to provide the Town such supplementary sewerage service 'as may be economically feasible, at a rate that would be mutually advantageous, taking into consideration all costs involved.'

On January 4, 1965, an ordinance was introduced in the Williamsport Town Council to approve the agreement. With the Mayor casting a vote to break a tie between an equally divided Council, the ordinance was approved on February 1, 1965. Subsequently, petitions for a referendum on the ordinance were filed with the Council of the Town. After due notice and public hearing, the ordinance was approved by about 70% of the votes cast at the referendum election. The amount of the proposed expenditure was not mentioned either in the notice of referendum or in the question referred.

An election for mayor and council was held the following month. When the time came for the new administration to appropriate funds to meet the Town's obligation under the contract, bond counsel for the Town expressed doubt in regard to the validity of the contract. Meanwhile, construction on the alternate plant had been started in April, 1965, and was approximately 40% complete when the Town notified the District that it had been advised that it could not legally carry out the provisions of the contract.

The Town contended before this Court that the contract is void and unenforceable, resting its argument on three grounds: (1) that the only benefit accruing to the Town which is not illusory or is not so vague as to be unenforceable is the assurance that the Town would not be exposed to damages from the treatment plant as originally proposed; (2) that the contract is ultra vires the Town because the Town lacked the power to enter into the agreement by which its only benefit would be the change in the plaint's location; and (3) that the District abused its powers in requiring the Town to pay it for changing the site of the proposed plant. The District challenged the correctness of these contentions and claimed, in addition, that the Town is estopped to deny the validity of the contract.

1.

The Town submits that the covenant of the District to render 'supplementary sewerage service' is 'mere window dressing involving no obligation on the part of the District greater than its obligation as a public utility under the law and that, accordingly,...