City of Pocatello v. Peterson , 93 Idaho 774 ( 1970 )

DONALDSON, Justice.

This action was initiated by the City of Pocatello, plaintiff-respondent, for the pur pose of seeking a declaratory judgment as to the validity of a lease agreement proposed by the city, but rejected by George H. Peterson and Dean G. Nielson, the defendants-appellants. The appellants rejected the lease agreement since they had a question as to its legality. The parties stipulated that the cause be submitted to the district court for decision upon the pleadings and exhibits attached thereto, and further stipulated:

“That all of the allegations of Plaintiff’s Complaint and Defendants’ Answer are true and correct and that it is stipulated and agreed that the reasonable rental value of the subject facility is the sum of $6,000.00 per month.”

The facts set forth by the pleadings, the exhibits, and stipulation disclose that on September 12, 1969, the Pocatello City Council enacted an ordinance declaring its intention to sell certain described unimproved lands owned by it. These lands were part of the Pocatello Municipal Airport and were situated near the runways of the airport. At this same time the city published a notice calling for competitive bids in accordance with certain contract documents. In calling for bids the city proposed that the successful bidder would purchase the unimproved land and construct an airport terminal building thereon in accordance with the specifications and requirements of the bid documents, and thereafter lease the completed structure on the purchased land back to the city. The structure to be built was to be used as. an airport terminal facility to accommodafe airlines serving the community, travelers on the airlines, and in addition to provide space for the Federal Aeronautics Administration, the Weather Bureau, and other related facilities.

Appellants Peterson and Nielson, doing business as joint-venturers, submitted both a bid for the purchase of the property and a proposal to construct the terminal building and to -lease it back to the city. In substance the proposed lease provided that the lessor was to construct a building on the property deeded by the city to them, construction to be in accordance with the plans and specifications which were a part of the bid documents and for the city to pay a rental of $6,000 per month for a twenty year period.

On December 8, 1969, the overall bid of the appellants was accepted by the respondent city as the lowest and best bid. On February 9, 1970, the city tendered to the appellants a lease agreement for execution but the appellants refused to sign it since they were uncertain whether the city could constitutionally enter into such an agreement. The city then initiated this action seeking a declaratory judgment to determine whether the lease agreément violates the provisions of the Idaho Const., Article 8, § 3.¹

The trial court, basing its conclusions of láw on' the stipulated record, ruled that the agreement was a lease and not a. conditional sales contract and that the rentals provided in' the agreement are not a debt or liability prohibited by Article 8, § 3 of the Idaho Constitution. The court also concluded that the lease agreement creates an ordinary arid necessary expense authorized by the laws of this state and that execution of such an agreement is within the authority of ■the: city and not prohibited by the constitution. The court furthermore concluded that the defendants could lawfully execute such an agreement and, accordingly, entered judgment for the city. It is from that judgment that this appeal has been taken.

Amicus curiae representing Bonneville County contends that the drafters of the Idaho Constitution intended that expenses authorized by the general laws of the state for units of local government to incur are the ordinary and necessary expenses to be excluded from the limitations of the constitutional provision. The attorney general as amicus curiae has adopted the brief and position of respondent (City of Pocatello).

At the outset it is to be pointed out that there is no issue before this Court as to whether there was a compliance with the provisions of I.C. Chapter 40, Title 31, as discussed in Swensen v. Buildings, Inc., 93 Idaho 466, 463 P.2d 932 (1970).

The principal issue presented by this appeal is whether the repair and improvement of the municipal airport by the City of Pocatello is an ordinary and necessary expense falling within the pertinent constitutional provision.² This Court emphasizes that it is meaningless to consider the broad question as to whether the repair, maintenance or construction of an airport is to be considered an ordinary and necessary expense without also taking into account the contextual framework peculiar to the City of Pocatello. In other words, whereas an airport may be considered an ordinary and necessary expense for some municipalities, it may not be for others. The repair, maintenance and construction of airports are not inherently “ordinary and necessary expenses” falling within the “proviso clause” of Article 8, § 3 of the Idaho Constitution.³ Research fails to disclose cases which have considered the question except for several in North Carolina.⁴ However these cases,⁵ without analyzing the factual backgrounds therein- involved, merely state in the abstract that:

“ * * * this Court has determined that the construction of a public airport is not a ‘necessary expense’ in that sense. Greensboro-High Point Airport Authority v. Johnson, supra; Sing v. City of Charlotte, supra.” Vance County v. Royster, supra, 271 N.C. at 64, 155 S.E.2d at 798. “ ‘ “If the purpose is the maintenance of the public peace or the administration of justice, if it partakes of a governmental nature or purports to be an exercise by the city of a portion of the state’s delegated sovereignty, if, in brief, it involves a necessary governmental expense.” ’

When thus tested, an airport is not a necessary governmental expense.” Sing v. City of Charlotte, supra, n. 4, 213 N.C. at 64, 195 S.E. at 273.

Thus these cases are of little help to this Court in considering the Idaho constitutional proviso as it relates to the facts of this case.

By I.C. § 50-321 ⁶ the legislature in broad' terms has authorized cities to acquire, operate and maintain airports. Additional legislative authority is to be found in I.C. § 21-401.⁷

It is fundamental, however, that insofar as the position of amicus curiae representing Bonneville County is concerned, statutes enacted by the legislature in this context cannot contravene constitutional limitations. In other words, even though the legislature may have authorized various expenditures by counties or cities and villages, if such expenditures are contrary to the constitutional provision, they cannot be made. The proviso to Article 8, § 3 requires both that the expenditure be authorized by the general laws of the State and that it be an ordinary and necessary one. The mere fact that the lease here is authorized by the general laws of the state does not ipso facto bring the expenditure within the proviso as an ordinary and necessary expense.

This Court will now consider whether the operation of an airport can be considered as an “ordinary and necessary” expense within the constitutional provision. As stated previously, few cases have been passed upon by the courts involving the precise issue presented by the instant case. However in an analogous situation, courts have on frequent occasion determined whether the operation of an airport is of such public use or necessity that the state or its subdivisions can use the power of eminent domain to condemn land for airports.

“Eminent domain is the power of the sovereign to take property for public use without the owner’s consent * * *. The ‘public use’ element is set forth' in some definitions as the ‘general welfare/ the ‘welfare of the publicthe ‘public good/ the ‘public benefit/ or 'public utility or necessity1 Nichols on Eminent Domain, § 1.11, pp. 4-6, Rev. 3d ed. 1964. (emphasis supplied).

The construction, maintenance, and operation of airports is generally considered to be for a public use justifying the exercise of the power of eminent domain for the purpose of acquiring private property for such use. See, City of Caldwell v. Roark, 92 Idaho 99, 437 P.2d 615 (1968) ; Ferguson v. City of Kenosha, 5 Wis.2d 556, 93 N.W.2d 460 (1958) ; 8 Am.Jur.2d Aviation, § 47, p. 667; Annot. 135 A.L.R. 756. As heretofore stated, in the State of Idaho, pursuant to I.C. § 21 — 401,⁸ cities are permitted to acquire, via the power of eminent domain, lands for the construction and maintenance of airports.

Thus the construction and maintenance of an airport facility is a valid justification for employing the power of eminent domain since airports are constructed and operated for,.the public benefit, utility and necessity. Examining the factual situation presented by the case at bar, it appears that the City of Pocatello has operated a municipal airport since 1947, but presently finds that the airport must be expanded if it is to remain of any value. The passenger terminal is an 'unsound structure. The observation room, technician’s shop, teletype room, weather bureau, office space and storage areas are all inadequate to accommodate the needs of the people. Furthermore the facility is inadequate to accommodate the needs of the Federal Aviation Agency. In view of these facts, were the expenditures by the City of Pocatello “ordinary and necessary expenses”? “Ordinary” means “regular; usual; normal; common; often recurring; * * * not characterized by peculiar or unusual circumstances.” Black’s Law Dictionary, p. 1249, (Rev. 4 ed. 1968).⁹ “Necessary” means “indispensible.” Black’s Law Dictionary, p. 1181 (Rev. 4 ed. 1968). An expenditure, although not of a frequently recurring nature, may nonetheless be “ordinary and necessary.” Hickey v. City of Nampa, 22 Idaho 41, 124 P. 280 (1912). Since the aviation industry has experienced tremendous growth during the last two decades, the original airport facilities at Pocatello, dating from 1947, have become obsolete and have ceased to provide the necessary safety demanded by air travelers. Insuring the safety of air travel is undoubtedly a legitimate, necessary, and ordinary function to be performed by a municipality. Where the city has maintained an airport facility for the benefit of the traveling public for more than twenty years and now finds it inadequate to serve the public, it is the opinion of this Court that the trial court correctly concluded that rentals on a new facility designed to fulfill the needs of the city and of the traveling public are “ordinary and necessary” expenses within the proviso clause of Article 8, § 3 ¹⁰ of the Idaho Constitution.

Closely analogous to the instant case is the situation presented by Hickey v. City of Nampa, supra, wherein the Supreme Court reasoned that:

“ * * * an expenditure, though out of the ordinary, which is incurred for the purpose of repairing * * * city property, or improving it in such manner as to render it serviceable to the city, falls within this proviso [Article 8, § 3] to the Constitution. * * * It is one of the incidents of the ownership of property that it must be kept in repair * * * if the property is to be useful and serve its purpose. The making of repairs may, however, only occur at infrequent intervals, and still be an ordinary and necessary expense.” Hickey v. City of Nampa, supra, 22 Idaho at 45, 46, 124 P. at 281.

In Hickey, wooden pipes in the city’s wooden water system had become obsolete and of no value to the City of Nampa (they burst and became useless). In the case at bar the Pocatello Airport is an obsolete facility, inadequate and unsafe for the citizens of the area. In Hickey, iron pipes were purchased by the City of Nampa to replace the obsolete wooden ones. The Supreme Court was of the opinion that the repair and improvement of the property was a necessary and ordinary expense since “In order for this property to be of any value to the city, it was necessary for it to be kept in repair.” Hickey v. City of Nampa, supra, 22 Idaho at 45, 124 P. at 281.

It is the opinion of this Court that the funds to be expended by the City of Pocatello for the repair and improvement of its airport facility are “ordinary and necessary expenses” incurred by the municipality, falling within the proviso to Article 8, § 3 of the Idaho Constitution.¹¹ Furthermore the repair and improvement of the Pocatello airport facility is essential -for the proper growth and development of the area. This is especially so since the railroads, upon which public travel and communication were heavily dependent in yesteryear, are discontinuing passenger service to many cities. The following statement made by Justice Cardozo in 1928 is even more pertinent today:

“Aviation is to-day an established method of transportation. * * * The city that is without the foresight to build the ports for the new traffic may soon be left behind in the race of competition.”' Hesse v. Rath et al., 249 N.Y. 436 at 438, 164 N.E. 342 at 342 (1928).

Judgment affirmed. Costs to respondent.

McQUADE and SHEPARD, JJ., concur.

1 . “Limitations on county and municipal indebtedness. — No county, city, town, township, board of education, or school district, or other subdivision of the state, shall incur any indebtedness, or liability, in any manner, or for any purpose, exceeding in that year, the income and revenue provided for it for such year, without the assent of two-thirds of the qualified electors thereof voting at an election to be held for that purpose, no [nor] unless, before or at the time of incurring such indebtedness, provisions shall be made for the collection of an annual tax sufficient to pay the interest on such indebtedness as it falls due, and also to constitute a sinking fund for the payment of the principal thereof, within thirty years from the time of contracting the same. Any indebtedness or liability incurred contrary to this provision shall be void: provided-, that this section shall not be construed to apply to the ordinary and necessary expenses authorized by the general laws of the state and provided further that any city or village may own, purchase, construct, extend, equip, within and without the corporate limits of such city or village, water systems and sewage collection systems, and water treatment plants and sewage treatment plants, and off street parking facilities, public recreation facilities, and air navigation facilities, and, for the purpose of paying the cost thereof may, without regard to any limitation herein imposed, with the assent of two-thirds of the qualified electors voting at an election to be held for that purpose, issue revenue bonds therefor, the principal and interest of which to be paid solely from revenue derived from rates and charges for the use of, and the .service rendered by, such systems, plants, and facilities as may be prescribed by law; and provided further that any port district, for the purpose of carrying into effect all' or any of the powers now or hereafter granted to port districts by the laws of this state, may contract indebtedness and issue revenue bonds evidencing such indebtedness, without the necessity of the voters of the port district authorizing the same, such revenue bonds to be payable solely from all or such part of the revenues of the port district derived from any source whatsoever excepting only those revenues derived from ad valorem taxes, as the port commission thereof may determine, and such revenue bonds not to be in any manner or to any extent a ■ general obligation of the port district •issuing the same, nor a charge upon the ad ■valorem tax revenue of such port district.”

2 . The “proviso clause,” Article 8, § 3, Idaho Constitution, states: “ * * * provided, that this section shall not be construed to apply to the ordinary and necessary expenses authorized by the general laws of the state * * See F.N. 1 for the complete text of Article 8, § 3. .

3 . See F.N. 2.

4 . Goswick v. City of Durham, 211 N.C. 687, 191 S.E. 728 (1937) ; Sing v. City of Charlotte, 213 N.C. 60, 195 S.E. 271 (1938) ; Greensboro-Highpoint Airport Authority v. Johnson, 226 N.C. 1, 36 S.E.2d 803 (1946) ; Vance County v. Royster, 271 N.C. 53, 155 S.E.2d 790 (1967).

5 . The cases of Goswick v. City of Durham, supra, n. 4, and Greensboro-Highpoint Airport Authority v. Johnson, supra, n. 4, did not raise the question of constitutional prohibition.

6 . “50-321. Aviation facilities — Acquisition, operation and maintenance. — Cities are hereby empowered: to acquire by purchase, gift, lease, sublease, or otherwise hold and take over such lands as the city council may deem necessary within or without the corporate limits whether within or without the county in which said city is located; do all things necessary in cooperation with the United States government in adapting any such lands so acquired to national defense purposes; and for the purpose of maintaining aviation facilities, to lease for aviation purposes, or any purposes connected therewith and incident thereto, all or any part of such land or lands, under such regulations and upon such terms and conditions as shall be established by the city council or otherwise established by law; to construct, operate and maintain, consistent with such regulations as may now exist or may hereafter be established by law, hangars, buildings and equipment necessary or convenient to the maintenance and operation of aviation facilities; to survey, plat, map, grade, ornament and otherwise improve such land, appurtenances, approaches, and avenues leading to or adjacent thereto; to provide for all costs and expenses incident or necessary to the exercise of the foregoing powers or the attainment of the foregoing objects out of the general fund of said city or in its discretion by special levy, in an amount not to exceed three (3) mills on the dollar in any one (1) year on all the taxable property within such city or by the issuanee of bonds as provided by sections 50-1001 through 50-1042.”

7 . I.O. § 21-401 provides in part:

“Counties * * * cities and villages are hereby authorized to acquire by purchase, lease, condemnation, or otherwise, take over and hold lands * * * for the purpose of constructing and maintaining aviation fields, airports, hangars and other air navigation facilities; to provide equipment necessary or incidental to the maintenance and operation of such aviation fields or airports; * *

8 . See F.N. 7.

9 . This Court stated in Thomas v. Glindeman, 33 Idaho 394, 195 P. 92 (1921), that:

“An expense is ordinary if in the ordinary course of the transaction of municipal business, or the maintenance of municipal property, it may be and is likely to become necessary.” Thomas v. Glindeman, supra, 33 Idaho at 398, 195 P. at 93.

See also, Hanson v. City of Idaho Falls, 92 Idaho 512, 446 P.2d 634 (1968) ; Jones v. Power County, 27 Idaho 656, 150 P. 35 (1915).

10 .. See F.N. 2.

11 . See BUST. 2.