Summary
In Eaton v. McCuen, 273 Ark. 154, 617 S.W.2d 341 (1981), we stated: "It is settled law that Article 16 does not apply to assessments for improvement districts."
Summary of this case from Bell v. FulkersonOpinion
No. 81-74.
Opinion delivered June 15, 1981
1. STATUTES — CONSTRUCTION. — The ordinance establishing the Garland County Solid-Waste Service District was adopted pursuant to Act 742 of 1977, which was subsequently repealed, but the power to administer such districts was preserved under Ark. Stat. Ann. 17-4109.1 (Repl. 1980). Held: The ordinances are a valid exercise of the Quorum Court's power. 2. STATUTES — CONSTRUCTION — CHARGES FOR COLLECTION SERVICE NOT TAX. — The monthly charges levied against the residents and establishments of the district by the ordinance in the instant case is not an unconstitutional property tax under Art. 16, Constitution of Arkansas; it is settled law that Art. 16 does not apply to assessments for improvement districts; further, service charges assessed against users within the service district are not taxes. 3. COUNTIES — ORDINANCE AUTHORIZING SERVICE CHARGE — CHARGE PROPORTIONAL TO SERVICES. — Appellants' argument that the service charge levied against the residents and establishments of the district by the ordinance should be construed as a tax because the charge imposed has no reasonable relationship to the services provided is not supported by the evidence since the stipulations entered into between the parties show that the cost of the service would be adequately financed by the service charge to each person who has access to use the collection service. 4. COUNTIES — BONDED INDEBTEDNESS — AMENDMENTS 10 13 NOT APPLICABLE. — Bonds issued pursuant to Ark. Stat. Ann. 82-2713, et seq. (Repl. 1976) are not general obligations of the county but are revenue bonds payable solely from the revenues derived from the district's service charges; therefore, Amendments 10 and 13, Constitution of Arkansas, are not applicable to the value of the bonds issued.
Appeal from Garland Chancery Court, James W. Chesnutt, Chancellor; affirmed.
Q. Byrum Hurst, Jr., for appellants.
Friday, Eldredge Clark, by: John C. Echols, for appellees.
Appellants ask in effect that we declare the Garland County Solid-Waste Service District to be invalid. They reside in the district and brought suit in chancery court against W. J. McCuen and other officials of Garland County seeking declaratory judgment and injunctive relief against the collection of a service charge levied for purposes of the Garland County Solid-Waste Service District. The case was submitted on stipulated facts from which the court granted summary judgment to the defendant appellees. We affirm that judgment.
On May 22, 1978, the Garland County Quorum Court adopted Ordinance 0-78-17 creating a subordinate service district to operate a landfill to dispose of solid waste as authorized by Act 742 of 1977, codified as Ark. Stat. Ann. 17-4101 et seq. (Repl. 1980). This ordinance was referred to the voters of Garland County in the 1978 general election and approved. The district now comprises all of Garland County except the city of Hot Springs and the unincorporated communities of Hot Springs Village, Lonsdale and Mountain Pine. 17-4101 provides:
(1) Subordinate service districts to provide one [1] or more of the services authorized to be provided by county governments may be established, operated, altered, combined, enlarged, reduced, or abolished by the Quorum Court by ordinance. . . .
(3) A subordinate service district is defined as a county service organization established to provide one or more county services or additions to county services and financed from revenues secured from within the designated service area through the levy and collection of service charges. . . .
Ark. Stat. Ann. 17-4109(1) and (3).
The collection of solid waste being a "public purpose," the providing of such a service by a county is implied in Amendment 55, Constitution of Arkansas (1874) and specifically provided for in Ark. Stat. Ann. 17-4109.1 (Repl. 1980) and Ark. Stat. Ann. 82-2713 (Repl. 1976) which we will refer to more fully at a later point.
On December 28, 1978, and again on July 9, 1979, the Quorum Court amended Ordinance 0-78-17 to particularly describe the service district boundaries and to provide a method of collecting the $1.50 a month service charge levied on residents of the district, as provided in the original ordinance.
On July 14, 1980, the court authorized the issuance of $600,000 in Garland County Solid Waste Facilities Revenue Bonds (the "bonds") pursuant to Ark. Stat. Ann. 82-2713, et seq. (Repl. 1976).
The appellants brought suit below to declare the ordinance void as being unauthorized in law, Section I 06 of Act 742 having been repealed, to enjoin collection of the service charges under the ordinance, and to enjoin issuance of the bonds alleging that they are prohibited by Amendment 10 and 13, Constitution of Arkansas (1874).
The chancery court granted summary judgment to the appellees as to each issue, and the appellants bring this appeal. They argue that the court erred in upholding the validity of the ordinances because each was enacted without statutory authority. We disagree. Each of the ordinances was adopted pursuant to Act 742 of 1977. Section 106 of that Act was repealed by Act 919 of 1979, codified as Ark. Stat. Ann. 17-4109.1 (Repl. 1980). However 17-4109.1 provides:
[S]ubordinate service districts created pursuant to said Section 106 [Act 742] and existing on the effective date of this Act [July 20, 1979] shall continue in existence and be operated and governed in accordance with the provisions of said Section 106 as in effect immediately prior to the effective date of this Act. Further, subordinate service districts may continue to be created as provided by law for the following purposes . . .
(b) Solid waste services, including recycling services, and solid waste collection and disposal services. . . .
The ordinances having been adopted under Act 742, and the power to administer such districts having been preserved under 17-4109.1, we find the ordinances to be a valid exercise of the Quorum Court's power, as the Chancellor held.
Second, the appellants argue that the $1.50 monthly charges levied against the residents and establishments of the district by the ordinance, as amended, is an unconstitutional property tax under Article 16, Constitution of Arkansas (1874). Again, we disagree with that contention. It is settled law that Article 16 does not apply to assessments for improvement districts. Bensberg v. Parker, 192 Ark. 908, 95 S.W.2d 892 (1936). Further, service charges assessed against users within the service district are not taxes. Housing Authority of Blytheville v. City of Blytheville, 228 Ark. 736, 310 S.W.2d 222 (1958); Holman v. City of Dierks, 217 Ark. 677, 233 S.W.2d 392 (1950); City of Harrison v. Braswell, 209 Ark. 1094, 194 S.W.2d 12 (1946); and Guerin v. City of Little Rock, 203 Ark. 103, 155 S.W.2d 719 (1941).
Under this same point for reversal the appellant argues that the "service charge" should be construed as a "tax" because the charge imposed has no reasonable relationship to the services provided. However, the stipulations entered into between the parties show that the cost of the service to the county would be $450,000 per year and that such an amount would be adequately financed by the charge of $1.50 per month to each person who has access to use the collection service. There is no evidence whatever in the record that the charge is disproportional to the services rendered. As the court stated in Holman, above:
It may be that the [method] selected by the council is a reasonable one, and in the absence of evidence to the contrary we are unwilling to say that the presumption of constitutionality has been overcome. Holman, at 679.
Finally, appellants argue that the bonds created an indebtedness exceeding the limitations of Amendments 10 and 13, Constitution of Arkansas (1874). We find no merit in this argument. Here, the bonds were authorized pursuant to Ark. Stat. Ann. 82-2713, et seq. (Repl. 1976). As such, they are not general obligations of the county but rather are revenue bonds payable solely from the revenues derived from the district's service charges. Therefore, Amendments 10 and 13 are not applicable to the value of the bonds issued. City of Harrison v. Braswell, above; Austin v. Manning, 217 Ark. 538, 231 S.W.2d 101 (1950); Downen v. McLaughlin, 189 Ark. 827, 75 S.W.2d 227 (1934); and Williams v. Harris, 215 Ark. 928, 224 S.W.2d 9 (1949).
The order granting summary judgment is affirmed.