Validation of $7,800,000 Combined Utility System Revenue Bond, Gautier Utility Dist., Jackson County, Dated as of Date of Delivery, In re
| Decision Date | 27 February 1985 |
| Docket Number | No. 55335,55335 |
| Citation | 465 So.2d 1003 |
| Parties | In re VALIDATION OF $7,800,000 COMBINED UTILITY SYSTEM REVENUE BOND, GAUTIER UTILITY DISTRICT, JACKSON COUNTY, Mississippi, DATED AS OF THE DATE OF DELIVERY. B. L. WHITE, et al., Appellants, v. GAUTIER UTILITY DISTRICT OF JACKSON COUNTY, Mississippi, et al., Appellees. |
| Court | Mississippi Supreme Court |
John M. Ford, Pascagoula, for appellants.
Peyton S. Irby, Watkins, Ludlam & Stennis, Jackson, Carl A. Megehee, Megehee, Brown, Williams & Mestayer, Pascagoula, Arthur F. Jernigan, Jr., Bacon, Jernigan & Martin, Jackson, for appellees.
Before ROY NOBLE LEE, P.J., and ROBERTSON and SULLIVAN, JJ.
I. Introduction
These consolidated bond validation and declaratory judgment actions present important questions concerning whether citizens have due process rights to be heard--and, if so, where and to what extent--before their property may become burdened by the obligation to underwrite revenue bonds issued by a local political subdivision. Beyond that the case presents the question of whether a local utility district may consistent with our state's constitution be organized and exist under a local and private law in the face of a general law respecting the organization and existence of such districts.
On this latter point, so long as the local and private act furthers the same general purposes and policies as the general act and so long as the differences between the two are primarily procedural or otherwise relatively minor, nothing in our Constitution, Article IV, Sections 87-90, saps the local and private act of its enabling power. Where, as here, such a situation exists, the citizens of the political subdivision covered by the local and private act have alternatives in that they may proceed under either that act or the general law, and the election so made is not subject to judicial review.
More fundamentally, we recognize that the decision to undertake substantial public improvements and to finance same via a bond issue are matters generically legislative. Our law secures to individuals no access to a judicial forum to thwart such actions except when they contravene the authority of the legislative body, and, accordingly, nothing in the due process guarantee of our constitution affords any citizen the right to reasonable advance notice and the opportunity to be heard before such legislative actions may be taken. The citizen has a due process right to challenge the accuracy and proportionality of the assessment and taxation of his property. He has a similar right of access to a judicial forum to present with respect to the bond issue any objection based in principle as distinguished from policy, and there to raise the question of whether the political subdivision has exceeded the substantive limitations upon its legislative power. So long as the citizen has been afforded these rights, the district may proceed with such projects as are consistent with the governing board's perception of the public need and finance such projects in any manner allowed by law.
As will be explained more fully below, each of the assignments of error tendered by Objectors on this appeal is rejected. The final decree rendered below is affirmed.
II. The Background
The Board of Commissioners of the Gautier Utility District of Jackson County, Mississippi, (sometimes "the Board") has determined to develop, construct, operate and maintain a new water and sewage treatment system designed to serve and benefit the entire district. The anticipated total cost of the project is $11,185,000. The project is to be financed by a grant from the United States Environmental Protection Agency in the sum of $3,385,000 and an interest bearing loan from the United States Farmers Home Administration (FmHA) in the amount of $7,800,000.
The mechanism selected by the Board for the consummation of the $7,800,000 FmHA loan is a bond issue. The District proposes to issue an 11.625 percent Combined Utility System Revenue Bond in the principal amount of $7,800,000. The record suggests that FmHA is prepared to purchase this bond, provided certain conditions are met or agreed to.
Prior to its determination to issue the bond, the Board by resolution
determined that it is necessary and in the best interest of the District and of those residing within its boundaries to provide the improvements [the water and sewage treatment system] hereinafter described.
By resolution adopted April 11, 1983, the Board found and determined
that it is necessary and in the public interest that the aforesaid [11.625 percent combined utility system revenue] bond be issued as hereinafter provided.
These determinations are legislative in nature made in the exercise of legislative authority vested in the Board.
The Board contemplates that the property owners of the District will pay fees for the services rendered through the new combined utility system and that the revenue so generated shall be applied to the retirement of the District's principal and interest obligations under the bond. In the event of the insufficiency of such revenues to meet the bond obligations, the property owners of the District would be subject to a special ad valorem tax in such amount as is reasonably necessary "not to exceed Five (5) Mills on all taxable property in the district".
B.L. White and others, residents and property owners within the District (referred to herein as Objectors), have taken great exception to these plans. Not only have Objectors opposed validation of the bond, they have gone so far as to charge that the legislative authority under which the District was created and purports to function was granted in contravention of the provisions of the Constitution of the State of Mississippi restricting the enactment of local and private laws. Because of the nature and scope of the attack mounted by Objectors, it is appropriate that we recite a bit of the history.
On May 17, 1966, Senate Bill No. 2251 was approved by the Governor. It has been published as Chapter 831, Local and Private Laws of Mississippi, Regular Session, 1966. This enactment set forth a scheme for the incorporation of water, sewer, gas, utility and fire protection districts in Jackson County, Mississippi. No other county is covered. At the time there was no general law providing a statewide scheme for the creation of such utility districts.
On May 23, 1972, however, such a general law, designated Senate Bill No. 2010, became law. This enactment was originally published as Chapter 536, General Laws of Mississippi, Regular Session, 1972. It has been codified as Miss.Code Ann. §§ 19-5-151 et seq. (Supp.1984). The act has been amended in respects not important here.
A comparison of the local and private law of 1966 with the general law of 1972 reveals substantial similarities. Those similarities are sufficient to generate a speculation that the statewide act was modeled upon the then six year old Jackson County local and private act, although nothing turns on the point.
For reasons not explained by any utterance of the legislature, the general law did not purport to affect the local and private law. Evidence that the legislature regarded the local and private law as of continuing viability was supplied by the enactment on May 26, 1980, of House Bill No. 1286 which amended the 1966 act by providing, inter alia, that the maximum rate of interest authorized for payment on bonds issued by the utility district would be increased from six to ten percent per annum. See Chapter 949, Local and Private Laws of Mississippi, Regular Session, 1980. This bond interest ceiling was further increased in 1982 to 14 percent by House Bill No. 1127. See Chapter 844, Local and Private Laws of Mississippi, Regular Session, 1982.
At the time of the enactment of the general law enabling the creation of utility districts--May 23, 1972--the Gautier Utility District had not been organized. That step was not begun until April 12, 1973--some ten and a half months later. On that date, the law on its face made available to Gautier two alternatives--that provided in the local and private law of 1966 and that provided in the general law of 1972.
On April 12, 1973, at a recessed regular meeting of the Board of Supervisors of Jackson County, Mississippi (the "Supervisors"), petitions for the incorporation of the Gautier Utility District were filed by more than twenty-five (25) owners of real property residing within the boundaries of the proposed district. The petitions were presented under the authority of and in conformance with the 1966 local and private act. Upon receipt of the petitions, the Supervisors issued an order setting a public hearing on the question of whether organization of such a district were required by the public convenience and necessity, and further directing the publication of notice that the public hearing would be held. Following the hearing, the Supervisors, on June 4, 1973, adopted a "Resolution Finding and Determining that the Public Necessity and Convenience Requires the Creation of the Gautier Utility District of Jackson County, Mississippi." A copy of the resolution was published in a newspaper of general circulation in the county on June 7, 14, 21, and 28, 1973.
On July 3, 1973, at a recessed regular meeting, the Supervisors adopted a resolution creating the District as a combined water and sewer utility and fire protection district within Jackson County pursuant to the 1966 local and private act. The resolution noted that no protest or objection was filed with the Supervisors and that no party had appeared in opposition to the creation of the District.
Section 1(f) of the 1966 local and private act provides "any party" aggrieved or prejudiced by the action of the Supervisors could appeal to the Circuit Court, and if no appeal be taken within 15 days after the adoption of the resolution...
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