October 3, 2007
Dear Public Works Director:
You have the following question, communicated to me by Brett Ward: What legal action
can your City take against outside water users who fail to make the “asked for” water conservation
steps, short of cutting off their water?
I have two suggestions in this area:
1.
The city could probably adopt regulations under which a person who violates water
conservation regulations adopted by the city would be required to pay X dollars for the estimated
gallons of water consumed by the violation. However, such regulations would need to be based on
more than “asked for” water conservation steps. I do not know what regulations or restrictions are
contained in your water conservation policy, but some such policies contain a voluntary reduction of
water usage, before mandatory water conservation restrictions are triggered in the policy.
Generally, cities have the right to establish reasonable utility rates and charges. With
particular respect to water services, Tennessee Code Annotated, section 7-34-104(5) authorizes
municipalities to "Prescribe and collect rates, fees, and charges for the services, facilities and
commodities furnished by such public works [water and sewer systems], and Tennessee Code
Annotated, section 7-34-114(a) further provides that:
The governing body of a municipality issuing bonds pursuant to this
chapter shall prescribe and collect reasonable rates, fees or charges
for the services, facilities and commodities of such public works
[water and sewer systems], and shall revise such rates, fees
or charges from time to time whenever necessary so that such public
works shall be and always remain self-supporting.
The same statute goes on to provide that the rates, fees or charges shall be sufficient to provide
revenue to pay for bonds and for the cost of the operation of the system.
Tennessee Code Annotated, section 68-221-210(a)--(b) also provides with respect to
municipalities that have obtained grants under Tennessee Code Annotated, title 68, chapter 221, to
construct wastewater treatment facilities, that:
The municipality collecting the user's fee shall have in addition the
authority to fix, levy and collect fees, rents, tolls or other charges in
an amount necessary to provide for the maintenance and operation
of sewage treatment works and payment of any indebtedness.
(b) This authority shall be in addition to other authority to set like
fees or to levy taxes pursuant to any other authority granted by the
state of Tennessee.
Tennessee Code Annotated, section 7-35-414 also provides that it is the duty of the
municipality "by ordinance to establish and maintain just and equitable rates and charges for the
use of and the service rendered by such waterworks and/or sewer system." Presumably, that
provision applies to charges and rates of every kind, including charges and rates connected with
excessive water consumption in times of drought. Tennessee courts have said the same thing.
[City of Parsons v. Perryville Utility District, 594 S.W.2d 401, 406 (Tenn. App. 2979) cert.
denied].
Finally, Tennessee Code Annotated, ' 7-51-401, authorizes municipalities to provide
outside utility services to customers desiring such service, and also provides that, “Any
such...municipality shall establish proper charges for the service so rendered so that any such
outside service is self -supporting.”
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All of the above statutes appear broad enough to permit municipalities to impose rates and
charges for water geared to excessive water consumption during periods of drought, without
express legislative authority. In addition, Patterson v. City of Chattanooga, 192 Tenn. 267, 241
S.W.2d 291 (1951) declares that general law authorizing cities to construct public works should be
liberally interpreted
2. The city might be able to cite to city court any water user, including an outside water
user, who consumes excessive water in times of drought, although, as I will point out below, there
may be a legal impediment to such action based upon the nature of utility services. In Silverman v.
City of Chattanooga, 57 S.W.2d 552 (1933), the Tennessee Supreme Court held that the City of
Chattanooga could cite to the city court, and that the city court could impose a fine on, a person
who was operating his airplane at and over the airport in a manner that violated the city’s
ordinance regulating aircraft. In rejecting the plaintiff’s argument that the airport was located outside
the city limits, the Court pointed to certain provisions in the city’s charter:
It appears that the charter of the city of Chattanooga contains the
following provision: “The Board of Commissioners shall have the
power by ordinance within the city to provide for enclosing, improving
and regulating [the Court’s emphasis] all public grounds belonging
to the City in or out of the corporate limits.” The city is further
authorized by its charter to “pass all ordinances not contrary to the
constitution and laws of the state that may be necessary to carry out
the full intent and meaning of this act, and to accomplish the object
of the city’s incorporation.” We have italicized the word “regulating”
as the pertinent determinative expression found in the charter. The
word regulate is defined by Webster as meaning, “to adjust or
control by rule, method, or governing principles or laws.” One of the
well recognized synonyms of regulate is rule, and another is govern.
So in Bouv. Law Dict., vol.3, page 2860, a definition of regulate is
“to subject to governing principles or laws.”
We are of opinion that
October 3, 2007
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when its charter expressly conferred upon the city the power by
ordinance of “regulating all public grounds belonging to the city, in or
out of the corporate limits,” that this embraced the power to enforce
these regulations. [ At 552]
Your City’s charter contains no such provision. It has the power under Art. 1, ' 2(8) “To
acquire or receive and hold, maintain, improve, sell, lease, mortgage, lease or otherwise dispose of
property, real, or personal, and any estate or interest therein within or without the city or State.”
The magic word “regulate” does not appear therein. However, Art. 1, ' 1(14) gives the city the
power “To prescribe reasonable regulations regarding the construction, maintenance, equipment,
operation and service of public utilities and compel from time to time, reasonable extensions of
facilities for such services....” Nothing in that section gives the city the right to adopt “reasonable
regulations” outside the city limits, but cities already have the power under general state law to
establish and operate municipal utilities inside and outside their city limits under the statutes cited
above, and to prescribe rates and charges for such services. It is difficult to believe that the right
to adopt “reasonable regulations” under Art. 1, ' 1(14) of the city’s charter would give the city the
right to adopt water conservation restrictions that apply to outside water service.
Furthermore, Art. 1, ' 1(18) of the City Charter gives the city the power “To acquire,
purchase, provide for, construct, regulate and maintain and do all things relating to market places,
public buildings, bridges, sewers and other structures, works and improvements.”
The magic word
“regulate” is in that provision, and although the provision does not expressly include water systems,
it covers “other structures, works and improvements, which is probably sufficiently broad enough to
include water systems.”
Finally, Art. 19A, ' 2(a) provides that:
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The City shall have the power and is authorized to acquire, improve,
operate and maintain, within and/or without the corporate or county
limits of such municipality, and (with the consent of such other
municipality within the corporate limits of an other municipality,
electric, water and sewerage plants....
That provision does not contain the magic word “regulate,” but it certainly implies the city’s
right to regulate the provision of utility services.
The problem with the theory that cases of the excessive use of water during times of
drought can be made municipal ordinance violations triable in the municipal court is that it has been
held that municipalities operate their utility systems in their proprietary, rather than in their,
governmental, capacity. The significance of that doctrine is seen in Bybees Branch Water
Association v. Town of McMinnville, 333 S.W.2d 815 (Tenn. 1960):
A municipal corporation engaged in the business of supplying public
utilities and facilities is regarded as a public corporation transacting
private business for hire, and, in that respect and to that extent, as a
public or quasiprivate corporation.’ 62 C.J.S. Municipal
Corporations, Sec. 3, p.73.
The city in its operation of utilities herein does so in its proprietary or
individual capacity rather than in its legislative or governmental
capacity. It is thus governed, for the most part, by the same rules
that control a private, individual or business corporation.’ [206
Tenn. 375] City of Knoxville v. Heth, 186 Tenn. 321, 210 S.W.2d
326, 329.
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[Also see City of Shelbyville v. State ex rel Bedford County, 220 Tenn. 197, 415 S.W.2d
139 (Tenn. 1967); Batson v. Pleasant View Utility District, 592 S.W.2d 578 (Tenn. App. 1980);
Maury County Board of Public Utilities v. City of Columbia, 854 S.W.2d 890 (Tenn. App. 1993)]
Generally, water and other utility customers obtain utility service through a contract with the
utility provider, in which the customer agrees to abide by the rules and regulations of the utility, but
it is in the governmental [police] powers that a municipality obtains the right to adopt regulations,
the violation of which will subject the violator to a penalty in the municipal court. Generally, the
police power is a governmental power that cannot be surrendered by contract. In City of Paris v.
Paris-Henry County Public Utility District, 340 S.W.2d 885 (Tenn. 1960), the court distinguished
between governmental and proprietary powers with respect to utility service. The question in that
case was whether a utility district could make excavations in the city’s streets without complying
with the city’s ordinance governing such excavations. The city had by ordinance 295 in May,
1956, granted to the utility district a franchise to lay, construct and maintain its gas lines under the
city’s streets. Following the utility district’s failure to restore streets it had excavated for that
purpose, the City of Paris, by ordinance 316 in May, 1959, required any person making a street
excavation to obtain a permit from the city.
The utility district argued that ordinance 316 was unconstitutional and an impairment of a
contract under Article I, Section 20, of the Tennessee Constitution on the ground that ordinance
295 provided that utility district’s agreement to the contract would be the consideration and Ain lieu
of all other fees, charges and licenses which the City might impose for the rights and privileges
herein granted.
The Court rejected the utility district’s argument.
It was true, said the Court, that when the utility district accepted the franchise, it became
binding upon the city, and that the franchise gave the utility district the right to use the
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city’s streets to install its pipes, and that the contract right created by the franchise could not be
revoked or impaired by the city. However, continued the Court, the utility district’s right was:
....subject to regulation by the City, acting in its governmental
capacity under the police power, delegated to it by the State, to
regulate and control its streets for the public health and safety.
Such power is broad and cannot be limited by contract. [Citations
omitted]
The Court also held ordinance 316 to be a valid police power regulation,
reasoning that:
Such right [of the utility district to use the city’s streets under the
franchise], was subject to regulation by the City, acting in its
governmental capacity under the police power, delegated to it by the
State, to regulate and control its streets for the public health and
safety. Such power is broad and cannot be limited by contract. [At
888] [Citations omitted] [Emphasis is mine]
However, I suspect a good argument can be made that when a municipality adopts
regulations respecting the conservation of water during times of drought, it is acting in its
governmental [police powers] capacity to legislate for the health, safety and welfare of its
citizens, rather than in its proprietary capacity. Obviously, such regulations world need to be
adopted by ordinance rather than as policies of the utility board, and the ordinance would require
the prescription of a penalty for violations of the regulations.
Sincerely,
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October 3, 2007
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Sidney D. Hemsley
Senior Law Consultant
SDH/
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