 | Legal Opinion:
Reference Documents:
Text of Document: January 25, 1993
There can be found no solid evidence that the town's water system was established under Tennessee Code Annotated, § 7-35-401 et seq. (most of the bonds of the system were issued under other laws). However, the case of State v. Town of Selmer, 417 Tenn. 532 (1967) suggests that where a water system is operated under a water board, Tennessee Code Annotated, § 7-35-401 permits a municipality, by ordinance, to allow the municipal governing body to function as the water board, even absent evidence the water system was established under that statute.
In that case, the Selmer Board of Waterworks and Sewer Commissioners operated the sewer, water, and gas systems. But the gas system had some outstanding bonds issued under the Revenue Bond Law. The bond covenants required the gas system to be operated by the water and sewer commission, but the city, acting under Tennessee Code Annotated, § 7-35-401 transferred the operation of all the systems to the city governing body. A chancellor divested the city governing body of the operation of all the systems and returned them to the board of water and sewer commissioners.
The chancellor was wrong with respect to the water and sewer systems, declared the Tennessee Supreme Court. There were no bond covenants requiring the board of sewer and water commissioners to operate the water and sewer systems. Furthermore, said the Court, when the bonds were paid off, the city could, by ordinance, transfer the operation of the gas system to the municipal governing body.
The Court reached that decision without any apparent evidence that the water and sewer systems, or the gas system, were even established under Tennessee Code Annotated, § 7-35-401. In fact, the a reading of the Selmer City Charter appears to make it clear that the gas system was established by a 1947 private act, under which the Board of Water and Sewer commissioners was given the exclusive jurisdiction over the gas system!
My point is that Selmer is one reason the city is probably on solid ground in relying on Tennessee Code Annotated, § 7-35-401 to adopt an ordinance abolishing the water board and transferring the operation of the water system to the board of mayor and aldermen.
Sincerely,
Sidney D. Hemsley
Senior Law Consultant
SDH/ |