The principles and problems involved are limited. Such facts only as appear pertinent and necessary to a discussion of the issues will appear as the discussion proceeds. *Page 251
A city is a municipal corporation, a creature of the state created by the Legislature. McClintock v. City of Phoenix,24 Ariz. 155, 207 P. 611; City of Worcester v. Worcester Consol.Street Ry. Co., 196 U.S. 539, 25 S. Ct. 327, 49 L. Ed. 591. A city, being a creature of the state, its present existence as well as its continued existence is dependent upon the sovereign will expressed through the legislative enactment creating it and it thus possesses such powers, and such powers only, as the Legislature confers. 43 C.J. 186, § 185, and cases cited.
Under the Constitution no fractional part of the state may organize itself into a city or municipal body or adopt a charter under the constitutional right and power to adopt a charter, until it has first become a city organized under the general law in pursuance of the general legislative enactment authorizing the organization of cities and granting powers to be so used when thus organized. "Any incorporated city or town may frame and adopt a charter for its own government," in the manner provided by the Constitution. (Italics added.) Const. Utah, art. 11, § 5.
Provo City is not a charter city and is therefore, as such city, limited in its powers to those powers granted by the general law. The city charter amendment to the Constitution of Utah is not a self-executing provision. In Wadsworth v.Santaquin City, 83 Utah 321, at page 347, 28 P.2d 161, it was shown that cities (not charter cities, and there are no charter cities in Utah) have only such powers as are by law conferred upon them, and "When a power is conferred on municipalities, the method of exercising such power is, in the absence of restriction, usually within municipal discretion, but, when the method of its exercise is prescribed, such method constitutes the measure of the power." 1 McQuillin, Municipal Corporations, 2d Ed., § 386, p. 956; Consumers' Coal Co. v. City of Lincoln,109 Neb. 51, 189 N.W. 643. In this state the power of cities to purchase, construct, extend, improve, repair, maintain, and operate certain public utilities *Page 252 and other projects, including waterworks systems, is recognized or expressly granted in the Constitution and several statutes. Const. Utah, art. 11, § 6; article 14, § 4; R.S. Utah 1933,15-7-4, 15-7-5, 15-8-14, 15-8-15; Laws Utah 1933, Second Special Session, c. 22, § 1, p. 41. So, also, several methods are prescribed by which waterworks or additions thereto may be acquired. They may be paid for out of current funds, R.S. 1933,15-8-2, 15-8-87; or by the issue of general obligation bonds, Const. art. 14, § 4; R.S. 1933, 15-7-7, 15-7-8, 15-7-9; or by the levy of special taxes on the property benefited thereby, R.S. 1933, 15-7-46; or by the issue of revenue bonds in the manner prescribed in Laws Utah 1933, Second Special Session, c. 22, § 3, p. 42.
Similar powers, except less extensive, have been conferred on cities relating to methods prescribed whereby they may acquire, operate, and maintain electric power and light plants and systems. Const. art. 14, § 4; R.S. 1933, 15-7-7, 15-7-15, 15-7-16, 15-7-17, 15-7-18, 15-7-21, 15-7-22, 15-7-23, and 15-7-23x, as added by Laws Utah 1937, c. 17, p. 39; 15-7-62, as amended by chapter 18, p. 39, Laws Utah 1937; and sections 15-7-44 and 15-7-46.
The classical pronouncement of the doctrine announced in 1854 in the case of Zottman v. City and County of San Francisco,20 Cal. 96, 97, 81 Am. Dec. 96, has been consistently followed and announces the doctrine adhered to in the Santaquin Case, as follows:
"The mode in which alone they could bind the corporation by a contract for the improvement of city property was prescribed by the charter, and no validity could be given by them to a contract made in any other manner. The rule is general and applies to the corporate authorities of all municipal bodies; where the mode in which their power on any given subject can be exercised is prescribed by their charter, the mode must be followed. The mode in such cases constitutes the measure of the power. Thus, where authority is conferred to sell property, with a clause that the sale shall be made at public auction, the mode prescribed is essential to the validity of the sale; indeed there is no power to sell in any other way. Aside from the mode designated there is a want of all power on the subject. This is too *Page 253 obvious to require argument, and so are all the adjudications. Thus in Head v. Providence Insurance Company, 2 Cranch. [127], 156, [2 L. Ed. 229], Mr. Chief Justice Marshall, in speaking of bodies which have only a legal existence, says: `The act of incorporation is to them an enabling act; it gives them all the power they possess; it enables them to contract, and when it prescribes to them a mode of contracting, they must observe the mode, or the instrument no more creates a contract than ifthe body had never been incorporated.'" (Citing cases.)
As indicated by Mr. Justice Folland in the Santaquin case, there are four ways in which waterworks may be acquired by cities. Electric power and light systems may be acquired in three ways, and, if the special assessment powers are applicable to the plant itself as to a lighting system on the basis of improvement to the property affected, then by four methods. Each method of acquiring an electric power and lighting system is inseparably bound to a method of payment, or, put in another form, no matter by what method acquired, the payment therefor must be by and through the method or methods of payment provided by the statutes. It is provided that:
"Whenever the board of commissioners or city council of any city or the board of trustees of any town shall contemplate making any new improvement to be paid for out of the general funds of the city or town, such governing body shall cause plans and specifications for, and an estimate of the cost of, such improvement to be made. If the estimated cost of such improvement, in case of a city of the first class, shall be less than $6,000, or in a town or a city of the second or third class less than $2,000, such city or town may make such improvement without calling for bids for making the same. If the estimated cost of such proposed improvement shall exceed the amounts above mentioned, the city or town shall, if it shall determine to make such improvement, do so by contract, after publication of notice for at least five days in a newspaper of general circulation printed and published in such city or town. * * *
"Nothing in this article shall be construed to require bids to be called for or contracts let for the conduct or management of any of the departments, business or property of such city or town, or for lowering or repairing water mains or sewers, or making connections with water mains or sewers, or for grading, repairing or maintaining *Page 254 steets, sidewalks, bridges, culverts or conduits in any city or town." Section 15-7-20, R.S. 1933.
The methods provided by statute are: (1) An electric power and lighting system may be acquired and paid for by the raising of general funds by the process of taxation, provided, and provided only that in so doing
"No debt in excess of the taxes for the current year shall be created * * * by any city; * * * unless the proposition to create such debt, shall have been submitted to a vote of such qualified electors as shall have paid a property tax therein, in the year preceding such election, and a majority of those voting thereon shall have voted in favor of incurring such debt." (Italics added.) Const. art. 14, § 3.
(2) By the issuance of general obligation bonds, "When authorized to create indebtedness as provided in Section 3 of this Article." (Above quoted.) But
"No city, * * * shall become indebted to an amount, including existing indebtedness, exceeding four per centum of the value of the taxable property therein, * * * provided further, that any city of the first and [or] second class when authorized as provided in Section three of this article, may be allowed to incur a larger indebtedness, not to exceed four per centum * * * for supplying such city * * * with water, artificial lights or sewers, when the works * * * shall be owned and controlled by the municipality." Const. art. 14, § 4.
Section 15-7-7, R.S. 1933, is the legislative enactment following substantially the language of section 4 of article 14 of the Constitution above quoted, as applicable to second class cities. It is further provided by section 15-7-8, R.S. 1933, that
"When the * * * city council * * * shall have decided to submit the question of incurring such bonded indebtedness, it shall by order specify the particular purpose for which the indebtedness is to be created and the amount of bonds which it is proposed to issue."
and to provide for submitting the question to the qualified electors at the next general or at a special election called *Page 255 for that purpose in accordance with the general election laws. Notice must be given and the form of the ballot is provided.
(3) By the levy of special or local taxes on property benefited by the proposed local improvement. Section 15-7-46, R.S. 1933:
"Special or local taxes may be levied by the governing body of any city * * * for constructing and maintaining * * * electric * * * plants for illumination, and the necessary means and cost of distribution; * * * such taxes to be levied on the real estatelying and being within the district in which such improvementsmay be made, or for the benefit of which such taxes are to beexpended, to the extent of the benefits to such property by reason of such improvement or expenditure." (Italics added.)
(4) By the issuance of revenue bonds in the manner prescribed by chapter 22, Laws of Utah 1933, Second Special Session. It is there provided by section 3 that:
"Whenever the governing body of any county, city or incorporated town by at least two-thirds vote shall determine to proceed under this act to purchase or construct any project or utility [electric power and lighting systems included] covered by Section 1 of this act, it shall first cause a comprehensive estimate to be made of the cost of purchase or construction and operation and of the net operating revenue thereof." (Italics added.)
Other pertinent provisions of chapter 22, supra, may be referred to later as to certain contentions otherwise presented. What has been quoted is sufficient for the present purpose, for the reason that defendants expressly admit they did not proceed under the provisions of chapter 22, referred to as the "Granger Act."
These constitutional and statutory provisions are here set forth in the beginning of this opinion because they are fundamental and as we believe exclusive and limit municipalities to the methods there prescribed for the exercise of the powers granted. *Page 256
It is clear the proposed lighting plant was not intended to be acquired by any one or any combination of the four methods above referred to, namely, (1) imposition of general taxes as the amount exceeds the debt limit and the revenue for the current year; (2) nor by the issuance of general obligation bonds as the procedure was not followed and it is admitted the proposed obligation, if an indebtedness within the constitutional provisions, exceeds the debt limitation imposed; (3) nor by the imposition of special assessments for local improvements within any designated local improvement district; (4) nor by procedure under the Granger Act, as specifically admitted, and, if it were not admitted, it is shown by the record. It is therefore manifest that some other authority and method of procedure must be found if the procedure and operations for acquiring, purchasing, and operating the proposed electric light and power plant and system are to be sustained.
It is provided that when a power is conferred upon a city or town and the manner of exercising that power is not specifically pointed out, the governing body "may provide by ordinance the manner and details necessary for the full exercise of such powers." Section 15-7-2, R.S. 1933. This section and other related sections were cited and construed in the case ofFjeldsted v. Ogden City, 83 Utah 278, 28 P.2d 144. That case was decided before the passage of the Granger Act. It was there said, in substance, that the statute provides for the issuance of bonds by cities in sections 15-7-7 and 15-7-9, R.S. 1933, but these bonds if issued must be issued within the constitutional debt limit and only when authorized by a majority of the qualified electors, and when bonds are issued the constitutional debt limit restricts the amount and the statute prescribes the method. If warrants (current year warrants or anticipation warrants) are used as the basis of borrowing or anticipating revenue for corporate purposes, the current revenue for the current year again imposes its limitations so that although cities may borrow money on the credit of the corporation against *Page 257 current revenues for the current year for corporation purposes in the manner and to the extent allowed by the Constitution and the laws and issue warrants and bonds other than revenue bonds and in such form and upon such conditions as the governing body may determine, section 15-8-6, R.S. 1933, both of these forms of financing have the limitations hereinbefore indicated. They are not available in the instant case and may not be made so.
The case of Barnes v. Lehi City, 74 Utah 321, 279 P. 878, recognized the power of a city to enter into a conditional sale contract and to issue future maturing "pledge orders" payable solely from the revenue anticipated to be derived from the use and operation of the property purchased. On its facts, that case went no farther, or if it did, it has been limited by the Fjelsted Case. In the latter case the problems could be differentiated on two grounds. First, in the Ogden Case the evidences of the obligations to pay were denominated "bonds," not special revenue bonds, while in the Lehi City Case they were denominated "pledge orders," drawing 6 per cent interest, without indicating what sort of obligation or "pledge orders" they were. Second, the Fjeldsted Case limited the income available for payment of bonds to the revenue derived solely from the new capital invested and prohibited the allocation of revenue from other sources to the payment of the proposed bonds. In the Lehi City Case "the question of power in a city to incur the particular form of obligation therein approved was not discussed," although much was said in approval of the so-called "Special Fund Doctrine."
There is a statute granting power to municipalities to "construct, maintain and operate * * * electric light works, * * * or purchase or lease such works from any person or corporation." Section 15-8-14, R.S. 1933. The governing body may contract for the lighting of streets, public buildings, and other places. Specific provisions are made for payment. Sections15-7-7, 15-7-8, and 15-7-9. *Page 258
We have been unable to discover any reference either in the Constitution or the statutes to conditional sales contracts as relating to cities, and, until the passage of the Granger Act, no mention either in the Constitution or statutes has been made of the "Special Fund Doctrine" or "self-liquidating" bonds of the type referred to in that act. Assuming, without conceding, that such a warrant, contract, or bond is not an indebtedness (?) within constitutional provisions, and recognizing as the statute declares, section 3, "The principal of and interest upon such bonds shall be payable solely from the net revenues derived from the operation of the project or service for the purchase or construction of which they are issued," and that "In no case shall the principal or interest of such bonds be made a charge upon the taxable [tax] revenues of such county, city or incorporated town," and that "No bond or coupon issued pursuant to this act (section 3 of the Granger Act) shall constitute an indebtedness [?] of such county, city or incorporated town within the meaning of any state constitutional provision or statutory limitation," still, are not the powers, methods, and limitations as adequately and as completely covered by the statute as any of the other methods or powers granted to cities? And may the things that might or could have been done under the decisions in the Barnes v. Lehi City Case, the Fjelsted Cases against Ogden City, and the Wadsworth v. Santaquin Case be done under the procedure required and imposed by the Granger Act?
Passing the question as to whether or not an obligation to pay out of a designated "special revenue," by whatever name designated, is or is not an indebtedness within constitutional inhibitions, and looking solely to the powers, methods, and means of purchasing, constructing, or operating an electric lighting system, there arises a classification of powers and methods for obtaining revenue, and that classification produces two classes; one, funds arising from general revenues, and the other, arising from special revenues resulting from the operation of the utility purchased *Page 259 or proposed to be purchased from the funds invested or proposed to be invested therein or the improvement made. Put otherwise, and as broadly as any advocate of the free and unlimited application of the so-called "Special Fund Doctrine" might contend, the city revenues are either from direct tax levies in some form or revenues from income-producing public utilities. In any event, the citizen taxpayer or beneficiary of the utility or improvement is the ultimate source of the revenue produced and the methods by which he is ultimately required to pay make little difference. The distinction between "the governing body," the "corporate entity," the "body politic," and the organized body of people constituting the city for whom and by whose right and in whose name the governing body acts or operates, is a distinction wanting in substance. Traced to its source, "special revenues," under any or all of the decided "Special Fund" cases, comes from the particular property or the operation of the property purchased by the fund it produced by way of taxpaying in the good old fashioned way, or by the payment for a service or a benefit rendered.
Notwithstanding section 2 of the Granger Act provides that the "act shall be construed as a cumulative statutory authority" for the purposes named "and shall not be construed to repeal any existing laws with respect thereto," and declares the intent ofthe act is to create "an additional and alternate statutorymethod for the purposes herein named," it would inject a new doctrine to charge the Legislature with enacting judicial opinions into legislative enactments by implied reference to what courts had held former legislative enactments were intended to mean. The Legislature may put into a law passed a doctrine approved by the courts. It is, however, a vastly different thing to say that because the courts have said a power is vested in a municipality by virtue of a law that when the Legislature specifies by statutory enactment that an alternate statutory method is provided, that the opinion of the court as to the interpretation *Page 260 of the statute previously interpreted is the alternate statutory method.
If the purpose of the Granger Act was not to provide an alternate statutory method of financing the construction of of the utilities named in the act by a method not formerly provided by statute, then it would seem to have failed of its purpose. The alternate method prior to the passage of the Granger Act of securing an electric lighting system was by the issuance of general obligation bonds, or, if one cares to play upon the meaning of "alternate," any one of the other methods by which such specified statutory provided utilities could be acquired, and certainly cannot be interpreted to mean that the Legislature intended to enact into the Granger Act what was previously decided by the Barnes v. Lehi City Case and cases like it, or, if it did, the legislative enactment pre-empted the field. If it was not the purpose of the Granger Act to make use of the so-called special fund doctrine as applicable to the utilities referred to in the act, then to what purpose was the Granger Act directed?
The record discloses that none of the four existing statutory methods have been followed. In this respect defendants have taken, as they must do, the laboring oar and contend that the Barnes v. Lehi City Case had judicially recognized a method of creating municipal indebtedness other than the methods provided by statute. This means judicial legislation and not legislative construction or interpretation.
In the absence of constitutional limitation or restriction or other irreconcilable conflicts, the state Legislature has plenary power to create municipal corporations by general law only and confer such powers as to it may seem proper and advisable; alter, amend or repeal such laws as relate thereto. To say that when a power is conferred, and the manner of exercising that power is prescribed and that municipalities have only such powers as are expressly granted and those necessarily or fairly implied in or incident to the powers expressly granted or those essential to the declared objects and purposes of the corporation, it is but a *Page 261 corollary of that principle. To say that there is likewise an implied inhibition against any power not expressly conferred or the right to exercise a power or a method not provided by law or ordinance or in a different manner from that prescribed, is denied by all the authorities. City of Des Moines v.Gilchrist, 67 Iowa 210, 25 N.W. 136, 56 Am. Rep. 341.
"The settled rule is that statutes, granting powers to municipal corporations, are to be strictly construed, and any fair and reasonable doubt as to the existence of such powers is resolved against the municipal corporation claiming the right to exercise them." Potson v. City of Chicago, 304 Ill. 222, 225,136 N.E. 594, 596; Interstate Power Co. of Nebraska v. City ofAinsworth, 125 Neb. 419, 250 N.W. 649; Schieffelin v. Hylan,106 Misc. 347, 174 N.Y.S. 506, 511.
In the case of State v. Salt Lake City, 35 Utah 25,99 P. 255, 18 Ann. Cas. 1130, it was held in relation to a notice of election and some minor verbal inaccuracies or surplusages in the ordinance, that, if the statute was not literally, it was at least substantially, complied with. In the instant case substantial compliance is not claimed, and if it were it could not be supported.
"When a statute enumerates the persons and things to be affected by its provisions, there is an implied exclusion of others." Nelden v. Clark, 20 Utah 382, 59 P. 524, 526, 77 Am. St. Rep. 917.
The case of Wadsworth v. Santaquin City, supra, applies the principle and supports the doctrine. It is not necessary to restate the facts. It is likewise not necessary to point out either generally or particularly wherein the Granger Act was not complied with in the instant case, as admission has disposed of that. Some of the many cases bearing upon this subject are:Colorado Central Power Co. v. Municipal Power DevelopmentCo., D.C., 1 F. Supp. 961; Kansas Power Co. v. Fairbanks,Morse Co., 142 Kan. 109, 45 P.2d 872; State v. McWilliams,335 Mo. 816, 74 S.W.2d 363. Other cases might be cited and other cases are referred to in the cases cited. Further citations would be cumulative. *Page 262
Defendants take up the cases last referred to and others cited by plaintiff and claim all of them are distinguishable from the instant case. On the facts, many of them are; but the principle of law that where a power is conferred on a municipality and the method is prescribed, such method must be substantially followed and constitutes the measure of power, is uniformly approved and we have found no case rejecting that principle.
It will be observed the wording of the statute is, "to create an additional and alternate statutory method." No other method of issuing bonds than the statutory method exists. Courts may not devise or create methods of creating municipal indebtedness or otherwise. Such power must come from the legislative powers found in the statutes creating and granting municipal power and defining their functions. The act pertinently provides that it shall not be construed as authorizing a breach of any valid lien or contract theretofore legally created or entered into. The declared intention is "to authorize the pledging, setting aside and segregation of the net revenues of the project or service, or the part thereof allocable to any improvement or extension" provided for by the act. Section 19. Rorick v. Dalles City,140 Or. 342, 346, 12 P.2d 762.
It is contended that Provo City does not need to rely upon the Granger Act, but that, under the powers granted by the Constitution and general laws of the state, the ordinances and proposed contracts may be adopted by an exercise of the initiative so vested in the people of Provo City, and "that the legislature is without power to adopt any restriction upon the powers of the people acting under the initiative to enact ordinances or laws of a purely legislative character which, in the case of voters of municipalities, are wholly local in scope." The article of the Utah Constitution relating to the "Legislative department" of the state government contains the following language:
"The Legislative power of the State shall be vested: *Page 263
"1. In a Senate and House of Representatives which shall be designated the Legislature of the State of Utah.
"2. In the people of the State of Utah, as hereinafter stated:
"The legal voters or such fractional part thereof, of the State of Utah as may be provided by law, under such conditionsand in such manner and within such time as may be provided bylaw, may initiate any desired legislation and cause the same to be submitted to a vote of the people for approval or rejection, or may require any law passed by the Legislature (except those laws passed by a two-thirds vote of the members elected to each house of the Legislature) to be submitted to the voters of the State before such law shall take effect.
"The legal voters or such fractional part thereof as may beprovided by law, of any legal subdivision of the State, undersuch conditions and in such manner and within such time as may beprovided by law, may initiate any desired legislation and cause the same to be submitted to a vote of the people of said legal subdivision for approval or rejection, or may require any law or ordinance passed by the law making body of said legal subdivision to be submitted to the voters thereof before such law or ordinance shall take effect." (Italics supplied.) Const. Utah, art. 6, § 1.
That the italicized parts of the section just quoted referring to such matters "as may be provided by law," etc., refer to laws passed by the Legislature, needs no construction. As constitutional provisions they are not self-executing. Long v.City of Portland, 53 Or. 92, 98 P. 149, 1111.
The Granger Act was passed by the state Legislature by the necessary two-thirds vote to make it effective upon approval. By its terms it became "effective immediately upon its passage and approval" August 8, 1933. It was not subject to referendum under the constitutional provision even if the state as a whole had desired such referendum. May a city then, by a referendum proceeding which is limited by statute, set at naught a legislative act upon the same subject? Or may an ordinance be originated and passed or after origin be submitted and adopted by the qualified electors of any city, so that by such method of financing a utility may be acquired? Or may a city or town after its incorporation under the general law providing for the organization, classification, and granting of powers, then by a procedure *Page 264 not provided in the Constitution become a "charter city," or enlarge its powers in such regard except by proceeding as the Constitution and statutes provide? Surely it cannot be the law that when the Legislature has covered the subject of incurring indebtedness (?) or securing public utilities by means of a proceeding to issue and dispose of special revenue bonds that the Legislature did not intend to do what it did. If a city may by ordinance, passed by the city commission, approved or not by an initiative or referendum vote, provide new or other methods or vest other powers than those granted or established by the Legislature, or if courts may do likewise, where shall the limitations be? Or if there are none, where will the end be?
Corporations for municipal purposes shall not be created by special laws but the Legislature is authorized to provide by general laws for the incorporation, classification, and organization, and by such general laws may grant to or withhold from the municipalities so created such powers as to the Legislature shall seem proper. This grant of power to the Legislature to enact general and uniform laws relating to municipal corporations constitutes in itself a limitation upon the power of municipalities whether acting through their regularly constituted legislative bodies or whether acting or attempting to act directly through initiative legislation. To permit a municipality to legislate by the initiative rather than in pursuance of and in conformity with the powers conferred by the Legislature would have the effect of destroying the uniformity of municipal law as contemplated by the Constitution. The Legislature by the enactment of general and uniform laws has created and organized municipalities and it is under the general law thus enacted they must operate. To permit an ordinance to originate by the invocation of an initiative proceeding to disregard, supersede, or override the general powers, laws, and limitations imposed upon municipalities by general law, is to permit the municipality, a creature of the law, to rise higher than the source giving it power and extend the sphere of its *Page 265 power and operation beyond that of the power creating it.Galvin v. Board of Supervisors, 195 Cal. 686, 235 P. 450;Newson v. Board of Supervisors of Contra Costa County,205 Cal. 262, 270 P. 676.
The cases where "chartered cities" draw their powers by direct constitutional grant or where the powers granted by charters authorize legislation of equal or co-ordinate authority with that of legislative enactments, have no application under the situation presented in the instant case. Nor is a situation such as is presented in the case of Long v. City of Portland,53 Or. 92, 98 P. 149, 1111, applicable where, as there, the Constitution, article 11, § 2, as amended in 1906, provided that, "The legal voters of every city and town are hereby granted power to enact and amend their municipal charter, subject to the constitution and criminal laws of the state of Oregon," although it was also provided that corporations may be formed under general laws but shall not be created by special laws.
Nor do the California, Arizona, or Oklahoma cases aid. Those cases are "charter" provision and initiative cases. It is sufficient to indicate the trend and meaning of two or three of the California cases as typical of the nonapplicability of the holdings. As previously indicated there are no "charter" cities in the state of Utah, neither by initiative proceeding nor otherwise. In the case of In re Pfahler, 150 Cal. 71,88 P. 270, 277, 11 L.R.A., N.S., 1092, 11 Ann. Cas. 911, the charter was adopted under and pursuant to a constitutional provision. The legislative powers provided for under the charter were drawn directly from the Constitution. As was held in that case:
"As to municipal affairs, it is sufficient if the provisions of a charter are consistent with the Constitution. * * * The constitutional grant to a city to frame its own charter, which, when ratified and approved, shall become its organic law, necessarily assumes that the form of government to be provided therein need not be the same as that provided by the Legislature for municipalities generally, and it was for the very purpose of enabling cities to have such a local organization *Page 266 as their local needs demanded that the authority to frame a charter for its own government was given."
Had Provo City by virtue of initiative proceedings and constitutional authority proceeded to adopt a charter for the municipality and had included therein the power to legislate upon matters such as are involved in the instant case, charter provisions springing directly from constitutional authority, thence through the charter to the municipality, an entirely different situation would be presented. This being the exercise of a constitutional power, superior recognition would be given to a general law relating to municipal corporations. We have no such situation here, hence such cases as In re Pfahler, supra;Dwyer v. City Council of Berkeley, 200 Cal. 505, 253 P. 932; and Hurst v. City of Burlingame, 207 Cal. 134, 277 P. 308, are not persuasive. No power is yet vested in Utah cities whereby in the exercise of powers or methods of procedure such cities may go around the Legislature and either claim, exercise, or establish powers not yet given by the Legislature.
We are persuaded the Granger Act is and must be, in the very nature of the municipal setup in the state of Utah as now existing, the exclusive method, procedure, and measure of the power whereby such public utilities as are by that act authorized to be acquired by the pledging of the net revenues of the utility to be so acquired, constructed, or operated, may be acquired, and that cities desiring to so acquire such utilities must conform to the legislative provisions having reference thereto.
In the case of Trenton v. New Jersey, 262 U.S. 182, at page 187, 43 S. Ct. 534, 537, 67 L. Ed. 937, 29 A.L.R. 1471, it is said:
"In the absence of state constitutional provisions safeguarding it to them, municipalities have no inherent right of self-government which is beyond the legislative control of the state. A municipality is merely a department of the state, and the state may withhold, grant or withdraw powers and privileges as it sees fit." *Page 267
Under the Granger Act whenever the governing body of any city shall determine to proceed under the act, it is first required that a comprehensive estimate be made of the cost of purchase or construction and operation and of the net operating revenue by a competent engineer approved by the state engineer, and one having "no connection with any manufacturer or seller of machinery, pipe, or other equipment" to be used in the project. The act declared the "governing body" by ordinance, or "other proper legislative enactment," "shall set forth a brief description of the contemplated improvement," and provides for the issuance of bonds: "Such bonds may be sold at either public or private sale upon such terms" as specified, to an agency of the United States; but, except when sold or disposed of to an agency of the United States of America, "such bonds shall be sold only after advertisement and upon bids" after at least ten days' notice in some newspaper having a general circulation in the city.
The record discloses no such proceedings. Such plans and specifications as are referred to were prepared by the people proposing to buy the bonds and to build the plant and system. The whole scheme bears the imprint of one promoted by the proposed contractors on their own terms, at their own price, and to put the city into the electric lighting business without risking a cent of their own money. Whether or not the bond company and the construction company, or either of them, may obtain an unconscionable advantage, only future developments may determine. Certainly, at the present time they are taking no risk themselves. No one else had any information as to plans and specifications or an opportunity to bid upon the proposed purchase, sale, or construction.
Nothing appears from which anyone could obtain information should he desire to bid upon the system as to the type of building, its size, the size, quality, or number of poles, types of transformers, or the kind, size, or type of wire to be used. The whole proposition is one of putting the *Page 268 money where the contractor may spend it and letting developments reveal what happens.
Surely when the Legislature provided the details relating to specifications, plans, notices, qualifications of engineering skill, etc., the Legislature intended that such projects should be open for genuine competitive bidding, upon a particularity of propositions, such that bidders may really compete and have in mind precisely the same things upon which they are bidding.
In this instance, Provo City had no independent expert advice. Apparently it adopted — if it may be said at the time of the passage of the ordinance and the voting thereon that there were any plans and specifications at all — very sketchy and incomplete plans and specifications. Such procedure not only violates the statute requiring work to be given to the lowest responsible bidder after ample advertisement, but is contrary to the plainest duties and sound dictates of public business practice.
"Public officials should not be permitted to thus play fast and loose with the funds of its citizens [be they special or otherwise]. A business enterprise thus initiated is foredoomed to failure, and to involve the citizens in a costly experiment."Colorado Central Power Co. v. Municipal Power Development Co.,Inc., et al., D.C., 1 F. Supp. 961, 966.
For a classification and citation of many of the cases relating either to the adoption, rejection, or modification of the so-called special fund doctrine, reference may be had to the case of State v. City of Miami, 113 Fla. 280, 152 So. 6. A number of cases are there cited and classified. The cases decided since the end of 1933, the date of the decision of the Florida case, relating to the special fund doctrine, would be but cumulative to the collection and classification made.
We need not enter into such matters as to whether or not the proposals and ordinances are not merely options on the part of the companies proposing to finance and construct the proposed electric power and lighting systems; as to *Page 269 whether or not the power plant site and the water rights which the record discloses are presently owned by the city (although the proposal proposes to secure the same) would not require an allocation of revenue as indicated in the Fjeldsted Cases and the Santaquin Case, and as provided by the Granger Act; and as to whether or not under the ordinances and proposals there was not in contemplation of law a presently vesting of the property, making it municipally owned and controlled and, therefore, the income therefrom constituting general revenue within many of the cases. Also as to whether or not the proposed ordinances and proposals amount to a delegation of legislative power or an abdication of power in favor of a possible contractor for the construction of the system by giving to the proposed contractor powers either to proceed to secure bids and let contracts (subject, however, to municipal approval), or to construct the plant itself. We refrain from doing so, believing that the discussion so far eliminates the necessity therefor and would unnecessarily lengthen this opinion.
Whether or not it was the intention of the Legislature to approve and adopt the special fund doctrine, as discussed and limited by the cases decided by this court, we need not speculate. The statute has prescribed and limited the manner of proceeding, the requirements and limitations upon acquiring, constructing, and paying for certain utilities out of the revenue to be derived from the operation thereof. No question being raised as to the statute, it is our duty to conform thereto. In view of the definite admission that the proceedings relating to the proposed issue of revenue bonds as prescribed by the Granger Act have not been followed, notwithstanding the argument that they need not be, and in view of the further fact that the statute expressly provides a method by which certain utilities may be acquired and paid for from the revenues derived solely from the income of the property so acquired, whether an addition, a construction or an independent improvement in which the fund so secured and the income from which is definitely *Page 270 separable, and in view of the further provision that such bonds shall not be regarded as a "debt"; and it further appearing that none of the other statutory provisions relating to acquiring such utility and providing for the payment therefor have been complied with, it is my opinion that there is no escape from the conclusion that the temporary writ of prohibition heretofore issued should be made permanent.