185 Iowa 593 | Iowa | 1919
Plaintiffs’ action is predicated upon Chapter 5 of Title V of the Code and Supplement. This chapter comprises Sections 742 to 750, inclusive. It authorizes cities
Section 894 (Sub. 5), Code Supplement, 1913, provides for a special tax, as follows:
“A tax not exceeding, in any one year, five mills on the dollar, which, with the water rates or rents authorized, shall be sufficient to pay the expenses of running, operating and repairing waterworks owned and operated by any city or town, and the interest on any bonds issued to pay all or any part of the cost of construction, renewal, repair or extension of such works; but such tax shall not be levied upon property which lies wholly without the limits of the benefit and protection of such works, which limits shall be fixed by the council each year before making the levy.”
Section 747-a, Code Supplement, 1913, provided that the waterworks so purchased or erected, pursuant to Chapter 5, “shall be managed and operated by a board of waterworks trustees.” These are to be three in number, and are to be appointed by the mayor, for fixed terms of six years.
Section 748, Code Supplement, 1913, is as follows:
“The said board of trustees shall have the power to carry into execution the contract or contracts for the purchase or erection of such waterworks, and to employ a superintendent and such other employees as may be necessary and proper for the operation of such works, for the collection of water rentals, and for the conduct of the business incident to the operation thereof. The said board of trustees shall require of the superintendent, and of the other employees as they may deem proper, good and suf
Code Section 749 is as follows:
“The said board of waterworks trustees shall from time to time fix the water rentals or rates to be charged for the furnishing of water, and such rates shall be sufficient, together with the proceeds of the five-mill water levy and the sinking fund levy of two mills, for the maintenance and operation of such works, the proper and necessary extension thereof, for all repairs, and for the payment of the purchase money or cost, principal and interest, incurred in the purchase or erection of such works, as the same falls due, according to the tenor of the mortgage and bonds given to secure the payment of such purchase price or cost. The said board of waterworks trustees shall make out and file in the office of the city clerk quarterly statements, giving full and complete reports of the receipts and disbursements handled and disbursed by them in the' administration of
The plaintiffs, as trustees, certified to the defendants, as a city council, the necessity for the five-mill levy, in addition to the proceeds of rates and rentals, for the purpose of meeting the operating expenses and the maturing interest. The council refused to make such levy, either at the rate of five mills or at any lower rate, on the ground that the proceeds of the rates and rentals long since adopted, and in force and then continuing, were “sufficient” to meet all the current expense of operation and all the maturing obligations. In their answer herein, the defendants pleaded affirmatively the facts in support of such contention. These were, in substance, that the sum total of rates collected and the five-mill tax greatly exceeded any contemplated expenditure, and that excessive collection had already resulted in a large surplus; that the proceeds of the rates in force and in course of collection would meet all the obligations of the current year, and leave a surplus of f60,000. Detailed figures of receipts and expenses were pleaded. Plaintiffs demurred to this answer. The demurrer being overruled, they elected to stand.
This reference to the pleadings foreshadows the point which we deem decisive, although it has not been argued by plaintiffs. The arguments disclose, also, that the differences of view between the contending parties are more numerous than the decisive point herein. Broadly stated, the contention for the plaintiffs is that the duty (and therefore the power ) of estimating the current cost, and of meeting such cost by fixing the rental rates and by estimating the de
In Martin-Strelau Co. v. City of Dubuque, 149 Iowa 1, we construed these statutes, and held, in effect, that they cast upon the trustees the duty and the.power, not only to fix the rental rates, but also to ascertain or estimate the deficiency to be provided for by the tax. Such was the implication, also, in J. W. Edgerly & Co. v. City of Ottumwa, 174 Iowa 205. The statute provides two sources of income: (1) Rental rates; (2) tax.
With this analysis of the statute, we turn to the affirmative allegations of the answer already referred to above. From these it appears that the rental rates now and for a long time past put in effect by the trustees will produce a revenue for the current year above $143,000; that a large surplus has already been accumulated by excessive collections; that the sum total of rentals, plus the surplus on hand, will fully meet all maturing obligations and still leave an unexpended balance of $60,000 on hand. This unexpended balance or surplus has no reference to the sinking fund provided for by the two-mill levy under Section 742. This two-mill levy for a sinking fund has been regularly' made, and no controversy over it is presented herein.
If an issue of fact had been made upon the allegations of the answer, other considerations would enter the discussion. It is to be granted that the duties of the trustees must have some flexibility and elasticity. We do not hold that the trustees are required to estimate accurately, in advance, the exact amount of the total proceeds to be raised, and that they shall be deemed to transcend their authority when such exact amount is exceeded to any extent. We recognize as a practical fact that only approximate estimates are possible. We recognize, also, that practical wisdom in the performance of such duty would require a margin of safety in the estimate. Eeasonable approximation is all that can be required, even though it result in an unexpended balance of some amount. But this consideration applies only to a question of fact, and not to a mere question of law. What would be a reasonable margin of safety in a given case would ordinarily be a question of fact, which should be resolved with liberality in favor of the estimate of the trustees. A working balance of some reasonable amount might, as a matter