SOME LEGAL CONSIDERATIONS ON HOT SPRINGS, AR WATER ISSUES While I am a lawyer, I do not purport to be an expert in municipal law or utilities law. Nevertheless, because several of you asked me questions I did a quick look at Ark. Code Ann . 23-4-101, and here is some most interesting language: (2) It is the intention of this act, more particularly expressed in other provisions of this act, to confer upon the municipal councils and city commissions of this state jurisdiction as to these matters, so far as they are effective WITHIN THE LIMITS of any municipality of this state (EMPHASIS mine). By implication, the Public Service Commission regulates rates OUTSIDE City limits. That appears to be the clear meaning of this language. In providing services beyond the City limits, Hot Springs may have subjected itself (its water utility) to regulation, at least insofar as approval of water rates charged County residents, by the Arkansas Public Service Commission pursuant to Ark. Code Ann. 23-4-401 and other statutes. However, I do NOT know whether there is at present any case law addressing this issue. On the other hand, the City will no doubt argue that it has contractual rights to set rates for those water users outside city limits. However, consider this: (1) There is NO real bargaining or meeting of minds on rates between two consenting contracting parties. The rates are on a take-it-or-leave-it basis and not subject to negotiation. Such contracts of adhesion (as I recall they are named), if indeed water connections are such, are viewed most critically by the courts for the precise reason that there is no opportunity for a real meeting of the minds or bargaining; (2) As Ray Owens, Jr. most aptly pointed out, the Highway 70 West Water Improvement District in relinquishing its infrastructure to the City and in abandoning its intent to build a water treatment plant, had at least an implied provision of said agreement with the City that the City WOULD serve its then present and future water needs, and arguably the City has breached said contract with the Walmart Hwy 70 West decision and other denials of service; (3) Moreover, if there is a breach of contract, the breach is egregious, outrageous, in that it has been done, by admission of the City Manager (and supposedly at the behest of the board), for its selfish annexation and tax reasons; (4) Aside from a probable breach of contract, there is, also, most likely, a breach of the Citys covenant of fair dealing and, also, its fiduciary duty to its County water users; (5) While a City has tort immunity in Arkansas and, therefore, cannot be sued for damages for wrongdoing (except for breach of contract damages), the same may not apply to Hot Springs water utility. I simply do not know enough about how it is set up---as a part of government or as a separate corporate entity---to form an opinion on this issue; (6) Regardless, the City is not immune to damages for any federal violation if County landowners or businesses can find any federal cause of action, violation of federally protected rights, for damages; (7) Even if there is no breach of contract (or other legal violation), the City has most clearly abused the trust of the County and its residents at a time when they are asking City and County voters to trust us on the Lake DeGray Water Project. The foregoing is not intended as a legal opinion on which anyone can rely. It is simply intended to answer questions posed to me by several of you insofar as my initial thoughts. More legal research is needed. Moreover, I am retired and am not looking for a lawsuit. I would suggest that Ray Owens, Jr., who is a most capable attorney and researcher, might be one lawyer who can provide more definitive legal answers. Phil Clay is also a most able researcher, lawyer, litigator, and scholar in case Ray feels that he has some conflict as a JP. Cliff Jackson
Posted on: Sat, 02 Aug 2014 20:00:46 +0000
Trending Topics
Recently Viewed Topics
© 2015