31 So. 2d 385 | Fla. | 1947
The City of Jacksonville owns and operates its electric plant and distribution system, hereinafter referred to as its municipal electric system. It became necessary to construct improvements, replacements and extensions to its municipal electric system to meet the expanding necessities of the City. Pursuant to this demand the City enacted Ordinance AA-357, authorizing these improvements, replacements and extensions, and providing for the issuance of $15,000,000.00 in revenue certificates payable solely from the revenues derived from the operation of the municipal electric system to finance the cost of said improvements. At an election called for that purpose as required by Chapter 21318, Acts of 1941, the qualified electors of the City approved the issuance of said certificates by a vote of approximately four to one.
The record discloses that for the past five years, the average annual net revenue of the Municipal Electric System after paying operating expenses, including principal and interest on outstanding certificates of like kind, is $3,074,186.74, and that an average of $318,656.23 in additional net revenues has been used in a depreciation and reserve account, that said amount is greatly in excess of the amounts necessary to retire principal, interest and maturities of the proposed Electric Revenue Certificates. It is further shown that the foregoing amounts will be supplemented annually by net revenues received from the City's Water works and Municipal Docks so as to aggregate $3,340,551.08 and $327,856.21 respectively, which sums are far in excess of that required to pay the principal and interest of all outstanding bonds and electric revenue certificates, *330 including the proposed issue of electric revenue certificates.
A petition to validate the $15,000,000.00 in electric revenue certificates was filed, order to show cause was issued, service and publication of the order was duly made, answer was filed and an intervening taxpayer filed objections to the validation. A motion to strike the answer and the objections of taxpayer was granted and a final decree validating the certificates was issued. This appeal is from the decree of validation.
It is first contended that the proposed issue of electric revenue certificates are bonds within the contemplation of Section 6, Article IX of the Constitution and can be issued only after an approving vote of the freeholders.
We find no merit to this contention. The chancellor found that these certificates do not come within the purview of Section
The record supports this finding. The electric revenue certificates are not a lien on any property of the City, their form is prescribed by Section 6 of Ordinance AA-357, which provides in terms that they are payable solely from a pledge of the net revenues derived from the operation of the electric system, that they are not an indebtedness of the City within any constitutional, statutory or charter limitation, and the holder expressly agrees when he takes them that he has no right to compel the exercising of the taxing power of the City for their payment. Section 9 of the Ordinance carries similar provisions with reference to the coupons attached to the certificates. So there is no support whatever for this contention. See Brooks v. City of Jacksonville,
Appellant further contends that the credit of the City is obligated for the support of these certificates by other provisions of the resolution and Ordinance AA-357, such as the *331
pledge of the rate making powers of the City, the agreement to pay the same price for electricity as it charges other customers, together with the covenant as to remedies available to the holder of the certificate in the event of default in payment. In our judgment these provisions in no way involve the taxing power of the City, so the contention is without support. State v. MacConnell,
The intervener's objections to the validation of the certificates have been considered but they are in part concluded by what we have previously said or they have to do with matters that are discretionary with the City officials and there is no showing that such discretion has been abused. The following cases conclude the latter contention. State v. City of Miami,
Appellant states its second question in terms as follows:
"Is the pledge of revenues of the municipal electric system to secure the payment of the electric revenue certificates proposed to be issued by the city of Jacksonville a superior and paramount pledge and a paramount lien to the pledges and liens upon the net revenues of the municipal electric system contained in refunding and original general obligation bonds theretofore issued by the City of Jacksonville and now outstanding?"
The lower court answered this question in the affirmative and supported its ruling by Brooks v. City of Jacksonville,
Appellant's third and concluding question is stated as follows:
"Are the electric revenue certificates proposed to be issued by the City of Jacksonville of equal dignity and priority with electric revenue certificates heretofore issued by the City of Jacksonville and now outstanding?"
Both the second and third questions challenge the correctness of the final decree relative to priorities of the proposed issue of electric revenue certificates. In answer to this question the lower court held in substance that the proposed electric revenue certificates were a valid and binding obligation against the revenues of the municipal electric system of the City of Jacksonville, superior and paramount to all other pledges of or liens upon said net revenues of said municipal electric system except electric revenue certificates heretofore issued by petitioner and now outstanding in the amount of $825,000.00, as to which certificates those hereby sought to be validated are of equal dignity.
This holding was amply supported by our opinion in State v. City of Jacksonville,
For these and other reasons too obvious to discuss, the decree appealed from is in all respects affirmed.
Affirmed.
THOMAS, C. J., CHAPMAN, J., and PARKS, Associate Justice, concur. *333