MEMORANDUM
FROM:
Sid Hemsley, Senior Law Consultant
DATE:
July 1, 2009
RE:
Water line: New Service?
The Town has a question based on the following facts: A local church needed a water line
enlarged for a sprinkler system, and a contractor agreed to do the upgrade for roughly $13,000.
The city manager decided that the town would do the upgrade because it involved an existing
water line. The town presented an itemized bill of costs for the upgrade of approximately
$15,000. Apparently, while no vote by the water board was taken, the water board agreed that
the church should pay for the upgrade under the Municipal Code, ' 18-109.
The question is whether the cost of the water line upgrade falls on the town or the
church?
I cannot answer that question under the facts given to me.
I note here that under the Municipal Code, ' 18-101 the town apparently operates its
water and sewer system in accordance with Tennessee Code Annotated, '' 7-35-406 et seq.
Tennessee Code Annotated, ' 7-35-414 declares that the city governing body operating a water
or sewer system under this part, has the “duty by ordinance” to establish and maintain just and
equitable rates and charges for the use of and the service rendered by the waterworks or sewerage
system, to be paid by the beneficiary of the service. However, there is nothing in that statutory
scheme that points to how ' 18-109 should be interpreted with regard to lateral water (and
sewer) lines that have been constructed and accepted by a city or town. .
But with respect to water and sewer system upgrades, Tennessee Code Annotated, ' 735-401, which is included in “this part” (Part 4 of Tennessee Code Annotated, Title 7, Chapter
35), municipalities cannot construct “any project for a private purpose.” However, “‘project for a
private purpose’ does not include the renewal or replacement of any existing water or sewerage
lines that are owned by the Municipal corporation.” [Tennessee Code Annotated, ' 7-35401(c)(1)(c).] For that reason, it appears that a city water system operated under that statute
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could, if it desired, adopt a policy to pay for upgrades, as well as maintenance and upkeep, of its
lateral water lines. The question in the Town’s case is whether it has done so in ' 18-109 of the
Municipal Code. More specifically, that question is whether the “upgrade” of the church’s lateral
is a “new service” for which the church is liable, or “maintenance and upkeep” of the line for
which the town is liable?
Section 18-109, denominated Connection charges, reads:
Water and/or sewer service lines will be laid by the town from its
mains to the property line at the expense of the applicant for
service. The location of such lines will be determined by the town.
Before a new line will be laid by the town, the applicant shall pay a
connection fee for the installation in an amount to be set by the
town by appropriate ordinance or resolution.
This fee shall be used to pay the cost of laying such new service
line and appurtenant equipment. If such cost exceeds the amount
of the fee, the applicant shall pay to the town the amount of such
excess cost when billed therefor.
When a service line is completed, the town shall be responsible for
the maintenance and upkeep of such service line from the main to
and including the meter and meter box, and such portion of the
service line shall belong to the town. The remaining portion of the
service line beyond the meter box (or property line, in the case of
sewers) shall belong to and be the responsibility of the customer.
Section 18-109 can probably ambiguous; it can be read two ways:
The first way is that “new service line” applies only to when the property is first
connected to the water system. That section provides that water (and sewer) lines will be laid by
the town at the expense of the “applicant for service.” Generally, the applicant for service is the
first tenant, and succeeding tenants. Even if a tenant who succeeds the first tenant wants an
“upgrade” of service, it can be argued that he is not an applicant for service- he already has
service. In addition, that section provides that the location of the lines is determined by the town.
Generally, after the lateral is connected to the main, it is not moved to a new location, even when
it is upgraded, although in some cases that may not be true. Finally, when a service line is
completed, “the town shall be responsible for the maintenance and upkeep of such service line...”
When a utility line is completed, under ' 18-111, which deals with main extensions, and custom
and practice in Tennessee, those extensions, including the laterals, become the property of the
city. For that reason, arguably the “maintenance and upkeep” of the lines should be broadly read
to include upgrades, and which should be the responsibility of the town.
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The second way is that new service applies to new service in the respect of not only the
installation of a new lateral, but also significant alteration of the lateral that in some way that
improves the water service. This reading would narrowly interpret the term “line maintenance
and upkeep” and distinguish between “line maintenance and upkeep,” and line upgrades. The
city would be responsible for the cost of line maintenance and upkeep, and the “applicant” for the
upgrade would responsible for its cost. . .
In ' 18-102 of the Municipal Code, the town council “shall adopt rules and regulations to
carry out the provisions of this chapter.” I see nothing in Title 18 in that code that makes it clear
how ' 18-109 is to be interpreted. Presumably, any such regulations could be made by ordinance
in Title 18.
As far as I can determine, there are no cases in Tennessee drawing a distinction between
“maintenance and upkeep” and “upgrades” in the utility (or any other) context, but several such
cases have arisen in other jurisdictions, although most of them involve definitions in statutes or
ordinances that distinguish between “maintenance” and “upgrades.” I will cite only a few of
them.
In City of Allen v. Public Utility Commission of Texas, 161 S.W.3d 195 (Ct. App. Texas
2005), a city ordinance defined an “upgrade or reinforcement of facilities with existing overhead
service” as, “... any change that requires installation, re-installation or addition of a new pole.”
[At 202] Southern California Edison Company, 121 Cal. App. 3d 1303, 18 Cal. Rptr. 3d 435
(2004) involved the public utilities commissions’ definition of “system upgrades” for the purpose
of determining who had to bear the cost of such upgrades, as follows:
By way of definition, we refer to transmission facilities needed to
bring power from the plant to the first point of interconnection with
the existing transmission grid as ‘gen-ties.’ We refer to facilities
needed to upgrade the existing transmission grid to ensure reliable
electric service and full delivery of a generator’s output ** with the
added generation as ‘network’ or ‘system’ upgrades. [Cal. Reptr.
At 437]
In Village of Pine Run v. South Jersey Gas Company, 520 A.2d 1367 (Sup. Ct. N.J.
1987), the court upheld a gas company’s refusal to take-over an apartment complex’s gas lines
unless the complex owners “upgraded” them to meet current minimum federal safety standards.
The long list of changes to the gas lines required to meet those standards clearly meant that the
term “upgrade” meant more than “maintenance.”
The court in Willett v. Waterford Charter Township, 718 N.W.2d 386 (Mic. App. 2006)
turned to the dictionary to define the word “maintenance” in the context of “maintenance defect”
with respect to the liability of the city for a blocked sewer, as:
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Maintenance is defined [in Random House Webster’s College
Dictionary (1977)] as “the act of maintaining,” and “maintain” is
defined as: ‘1. To keep in existence or continuance; preserve. 2.
To keep in due consideration, operation or force. 3. To keep in a
specified state, position, etc... Id. [At 394-95]
In Hansen v. Audubon, 378 N.W.2d 903 (Iowa 1985), Iowa’s Tort Liability Act exempted
municipalities from liability for failure to upgrade, improve or alter any aspect of an existing
public improvement... The Court declared that terms “upgrade, improve or alter to new,
changed, or altered design standard.... indicates a change in design or different design....” while
“[r]epair or maintain, as opposed to ‘upgrade’ denotes a restoration to former design standards to
enable the existing facility to operate adequately.” [At 906-07]
In an entirely different context, Padilla v. School District No. 1 in the City and County of
Denver, 25 P.3d 1176, the court cited the dictionary definition of “maintain” to determine that
the school district was not required to “upgrade” its “time-out” room:
Broadly construing the immunity waiver provisions, as we must,
meanings of “maintain” include “to keep in a state of repair,
efficiency, or validity: preserve from failure or decline.” Webster’s
Third International Dictionary 1362 (1993). “Maintenance”
includes “the labor of keeping something (as buildings or
equipment) in a state of repair or efficiency: CARE, UPKEEP.”
Id. [At 1182] [Court’s capitalization.]
However, the same case also declared that in the tort liability context, that:
Similarly, in [the earlier case of ] Swieckowski, we used a
definition of “maintain” to narrow the construction of this word to
a single meaning, but rather to point out that the allegations there
amounted only to a design defect. We said ‘maintain’ is defined as
keeping a constructed edifice, structure or improvement in the
same general state of being, repair or efficiency as initially
constructed. Swieckowski, 934 P.2d at 1385 (emphasis in original).
However, we did not intend to circumscribe the jurisdictional
inquiry to this one meaning. Broadly construed, “maintenance”
encompasses ongoing repair and upkeep of the facility as it is put
to the original, additional, or different uses than originally
constructed.... [At 1182]
It appears an accurate general proposition that “maintenance” reflects the act of keeping a
present system operating, and that the term is generally distinguished from “upgrade,” which
reflects the enhancement of the present system in some respect. But as Padilla, above, points out,
in some contexts “maintain” can also mean upgrades. The problem with ' 18-109 it is still not
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clear (at least to me) whether waterline “maintenance and upkeep” means keeping the water lines
operating adequately, or whether it includes line upgrades.
I have not read the town’s contract with the customer to determine if it says anything
about what water customers are promised (or not promised) with respect to increased line
capacity. However, I note that ' 18-107, which is titled Application and contract for service,
says in the last sentence of the second paragraph that, “If the service applied for cannot be
supplied in accordance with the provisions of this chapter, and general practice, the liability of
the town to the applicant shall be limited to the return of any connection fee made by such
applicant.” That sentence generates the question of what “and general practice” means, but
presumably it could mean how that section has been interpreted and applied in the past. If it is
true that ' 18-109 is ambiguous on the question of who the cost of enhanced water lines rests,
the rules of statutory construction come into play. One of those rules is that administrative
interpretations of a statute, especially where they are unchallenged over a long period, are
accorded great weight by the courts. [See Gallahger v. Butler, 378 S.W.2d 161 (1964); State
Board of Examiners v. Weinstein, 638 S.W.2d 406 (Tenn. Ct. App. 1982); Covington Pike
Toyota, Inc. v. Cardwell, 829 S.W. 2d 132 (Tenn. 1992).] The rules of statutory construction
apply to ordinances as well as statutes.
I do not know how the town has interpreted ' 18-109 with respect to who pays for lateral
upgrades such as increased water capacity, but from the facts related to me, the church was
willing to pay for the lateral upgrade, and obtained a contractor’s price on the upgrade, but the
town decided to do the work, which it undoubtedly had the right to do, and the town’s work cost
roughly $2,000 over the contractor’s quote. Those facts lead me to believe that the parties--at
least initially--thought a water customer asking for a water line upgrade was required to pay the
price of the upgrade. But it seems important for the town to ascertain whether it has been a long
practice by the city to interpret and apply ' 18-109 in manner.
In all events, the city should probably amend ' 18-109 to make it clear what the intention
of the city is on this point.
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