State ex rel. Water Development Authority v. Northern Wayne County Public Service District

464 S.E.2d 777, 195 W. Va. 135, 1995 W. Va. LEXIS 185
CourtWest Virginia Supreme Court
DecidedOctober 27, 1995
DocketNo. 22965
StatusPublished
Cited by10 cases

This text of 464 S.E.2d 777 (State ex rel. Water Development Authority v. Northern Wayne County Public Service District) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Water Development Authority v. Northern Wayne County Public Service District, 464 S.E.2d 777, 195 W. Va. 135, 1995 W. Va. LEXIS 185 (W. Va. 1995).

Opinion

McHUGH, Chief Justice:

The Water Development Authority (hereinafter “WDA”) seeks a writ of mandamus to compel the Northern Wayne County Public Service District (hereinafter “Public Service District”) to impose a tap fee of $2,750.00 even though the Public Service Commission (hereinafter “PSC”) ordered the Public Service District to reduce the $2,000.00 tap fee to $250.00. For reasons set forth below, we decline to issue a writ of mandamus.

I

One of the WDA’s responsibilities is to improve the public water and sewer service throughout the State. See W.Va,Code, 22C-1-2 [1994]. Pursuant to this responsibility the WDA “may make loans and grants to governmental agencies for the acquisition or construction of water development projects by such governmental agencies[.]” W.Va. Code, 22C-1-5 [1994].1 In order to be able to make loans to governmental agencies, such as the Public Service District, the WDA issues bonds which it repays from revenue collected from the local projects. W.Va. Code, 22C-1-5 [1994] and 22C-1-9 [1994], When issuing its bonds the WDA agrees to impose all statutory rights, including the right to increase service charges, in order to ensure that the bonds are paid when a local borrower cannot make its loan repayment. W.Va.Code, 22C-1-7 and 12 [1994],

In the case before us, the WDA states it entered into a loan agreement and a supplemental loan agreement, both dated March 16, 1989, with the Public Service District. The proceeds from the loans were to be used by the Public Service District to construct a public sewer system.

The Public Service District must be able to pay for its own expenses including repayment of the loan made by the WDA. See W.Va.Code, 16-13A-9 [1994] and W.Va.Code, [138]*13822C-1-5 [1994]. However, in the case before us, the Public Service District has been unable to make payments on the debt owed to the WDA. Thus, the WDA requested the Public Service District to impose, a higher tap fee (connection fee) in order to rectify the Public Service District’s problem in repaying the WDA.

The Public Service District complied with the WDA’s request by filing a proposed increase of its tap fee from $250.00 to $2375.00 with the PSC on February 24, 1992. The PSC entered an order dated June 3, 1992, establishing a $2000.00 tap fee on an interim basis pending the establishment of a permanent tap fee in the Public Service District’s upcoming permanent rate case. The order further directed that all tap fees of $2000.00 collected pursuant to the June 3, 1992 order would be subject to refund depending on how the permanent rate case was decided. The PSC instructed the Public Service District to file for a general rate case as soon as possible because the PSC’s longstanding policy has been that tap fees are not to be cost based. Instead, the tap fee merely represents some contribution by the customer to defray the costs of installing service connections. The WDA participated in the action before the PSC as an intervenor.

On October 13, 1992, the Public Service District filed a general rate case seeking, inter alia, an increase in its rates by 11.5% and the imposition of a tap fee of $2375.00. On February 25, 1993, an administrative law judge of the PSC approved a $2000.00 tap fee and an 11% increase in rates. However, by an order dated March 26, 1993, the PSC reduced the tap fee approved by the administrative law judge to $250.00 reiterating its policy that tap fees are not to be cost based because high tap fees discourage individuals from using a sanitary sewer system. Additionally, the PSC increased the Public Service District’s rate to the requested 11.5%. The WDA fully participated in this action before the PSC as an intervenor.

On June 1, 1993, this Court denied the petition for appeal of the PSC’s March 26, 1993 order. The WDA participated in the action before this Court.

Subsequently, because the Public Service District was still unable to repay the loan to the WDA the WDA, by a letter dated October 24, 1994, directed the Public Service District to immediately increase its tap fee to $2,750.00. In response, the Public Service District filed a petition with the PSC on December 21, 1994, seeking to immediately increase its tap fee from $250.00 to $2,750.00. The PSC, in an order dated April 19, 1995, again restated its policy regarding tap fees and rejected the Public Service District’s request. The PSC encouraged the Public Service District to file a general rate case in order to rectify the Public Service District’s problem of repaying the loans to the WDA.2 The order also indicated that the PSC was not ruling out an increase in the tap fee. The WDA did not participate in the action leading up to the April 19, 1995 order of the PSC.

On June 21, 1995, the WDA filed the petition for a writ of mandamus which is currently before us alleging that the Public Service District should be compelled to impose a $2750.00 tap fee because it has authority to impose a service charge on defaulting districts pursuant to W.Va.Code, 22C-1-7 [1994] regardless of the PSC’s orders. The WDA maintains that if it does not have the authority to require the Public Service District to impose the tap fee, it will have to include the uncertainty of its authority to enforce debt payment in the official statement required by the Securities and Exchange Commission which will reflect unfavorably on the integrity of the bonds it issues.

II

The issue before us is whether the WDA’s authority pursuant to W. Va. Code, 22C-1-7 [1994] to impose service charges on projects it funds when the projects’ owners are in default on WDA loans is subject to the regulatory review and approval of the PSC. For reasons explained below, we find that the [139]*139WDA’s authority is subject to the regulatory review and approval of the PSC.

The dispute in the case before us centers on the following language found in W.Va. Code, 22C-1-7 [1994], in relevant part:3

In order to ensure that the public purposes to be served by the [WDA] may be properly carried out and in order to assure the timely payment to the [WDA] of all sums due and owing under loan agreements with governmental agencies ... notwithstanding any provision to the contrary elsewhere contained in this code, in event of any default by a governmental agency under such a loan agreement, the [WDA] has, and may, at its option, exercise the following rights and remedies in addition to the rights and remedies conferred by law or pursuant to said loan agreement:
(1) The [WDA] may directly impose, in its own name and for its own benefit service charges determined by it to be necessary under the circumstances upon all users of the water development project to be acquired or constructed pursuant to such loan agreement, and proceed directly to enforce and collect such service charges, together with all necessary costs of such enforcement and collection.

The WDA contends that the above language gives it exclusive authority, which is not subject to the PSC’s jurisdiction, to impose service charges for defaulting borrowers in order to ensure that the integrity of the bonds it issues is preserved.

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Bluebook (online)
464 S.E.2d 777, 195 W. Va. 135, 1995 W. Va. LEXIS 185, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-water-development-authority-v-northern-wayne-county-public-wva-1995.