Epitomized Opinion,
Section 3959 GC. provides that surplus funds derived from city water rents may be applied only to repairs, enlargement or extensions of the works, to the payment of interest on construction or for creation of a sinking fund to liquidate the debt. The city passed an ordinance defining a surplus, and providing that it had to be transferred to its general fund, and used to pay certain charges and expenses of the city.
This action was brought to enjoin the transfer of the funds. The Supreme Court sustained the court below and held:
1. That the City had no power over the surplus beyond that expressly granted in the statutes That the taxing power is in the legislature, and while charges for service and conveniences rendered by a municipality to its inhabitants are not taxes, yet where the charge is in excess of the cost, the rule does not prevail. A water rate deliberately made to make up a deficiency in municipal expenses, which cannot be made within the limits of taxation, otherwise prescribed, is to that extent an effort to levy taxes, not authorized by Sec. 3959 GC.
2. By Secs. 4, 5 and 6, Art. XVIII of the Constitution, municipalities have been vested with power to acquire, construct, own, lease, and operate public utilities, but this does not give them full control over rates and charges for a municipally owned public utility. But this authority to exercise local self-government does not operate to take away from the legislature its power to place limitations upon taxation.
3. Sec. 3799 GC. limits the power of municipalities to transfer funds from the waterworks to the general fund, except those raised by taxation, and then not until the object of the fund has been accomplished, and this limitation is not affected by the Home Rule provisions of Art. XVIII of the Constitution.
4. Cincinnati being a charter city, and because its charter adopts and continues in force the general and all local or special laws enacted by the legislature relating to government of cities and defining and limiting their powers and duties, will be construed as a reaffirmation of all such general and special laws enacted prior to the date of the charter, and also all special laws theretofore passed by the general assembly relating to such city.
Any municipal legislation adopted by such city otherwise than by amendment of such charter, in .conflict with any of the general laws of the state, pertaining to municipalities or special laws pertaining to such city, will be invalid.