Third class city may sell water to other cities and to individuals beyond its corporate limits. Such city may not own facilities beyond its corporate limits to deliver such water. Such sales are not subject to jurisdiction of Public Service Commission. Third class city may not sell gas beyond its corporate limits. This opinion does not apply to cities having combined waterworks and sewerage systems which fall within the provisions of Section 250.190, RSMo.

n MUNICIPALITIES : '.t PUBLIC SERVICE COMMI SSION : WATER COMPANIES: GAS COMPANIES : ,n ~ ~ .A Third class city roay sel l water to other c i t i es and to individuals beyond its corporate limits . Such city may not own facilities beyond its cor- porate limits to deliver such water. such sales are not s ubject to jurisdiction of Public Service Com- mission. Third class city may not sell gas beyond its corporate limits . This opinion does not apply to cities having combined waterworks and sewerage systems which fall within the provisions of Section 250.190 , RSMo . OPINION NO . 6 (AMENDED June 20, 1973) This opinion should always be accompan ied by Op. No. 32, 10/5/61, Garrett . Honorable Ronald M. Belt State Representative Macon, Missouri Dear Representative Belt : April 27 , 196 7 FlLED ~ Reference is made to your request for an official opinion from this office raising certain questions in regard to the sale of water or gas by a municipal water or gas utility owned and operated by a third class city. Ina smuch as the law applicable to municipally owned water utilities differ s from the law appli- cable to municipally owned gas utilities , the questions raised by you have been restated for the purpose of logical treatment and disposition . The restatement of the questions , a discussion of the applicable law and conclusions by this office follow. 1. May a third class city sell water to a fourth class city or village for resale by the fourth class city or village to its inhabitants? Authority for a third class city to own and operate a public utility for the purpose of supplying water to the inhabitants of such city is found in Sections 88 . 633 , 91.010 , 91 . 090 and 91 . 450 , RSMo (All statutory references herein are to the Revised Statutes of Missouri as amended unless other wise specified) . Similar authority is conferred upon fourth class cities by Sections 88 . 773 , 91 . 010 , 91.090 and 91.450 . Authority for villages to own and operate a public utility for the purpose of supp: ying water to its inhabitants is found in Sections 91 . 010 and 91.450 . Therefore , the authority for cities of the third class , cities of the fourth class and villages to own and operate public utilities for the purpose of supplying water to the inhabitants of such municipal corporations is clearly provided for by the statute s . .. ' ~ I Honorable Ronald M. Belt The sale of water by cities is provided for by Section 91 . 050 as follows : "Any city in this state which owns and op- erates a system of waterworks may , and is hereby authorized and empowered , to supply water from its waterworks to other munici- pal corporations for their use and the use of their inhabitants , and also to persons and private corporations for use beyond the corporate limits of such city , and to enter into contracts therefor , for such time , upon such terms and under such rules and regul ation s as may be agreed upon by the contr acting parties. " The cited statute is applicable to the sales of water to cities of the fourth class and villages by a public utility owned and operated by a city of the third class . Such sales may be made for resale by cities of the four th class and village·s to the inhabitants of such municipal corporations. The purchase of water by cities of the fourth class and villages is authorized by Section 91 . 060 as follows : "Any city, town or village in this state having authority to maintain and operate waterworks may procure water for that purpose from any other city having a sys- tem of waterworks , and to that end may enter into a contract therefor with such city having a system of waterworks ; and any city of this state having a water- works system is hereby authorized and empowered whenever it deems it expedient to supply any other city, town or village of this state in its vicinity with water from its waterworks for such time and upon such terms and under such rules and regul ations as it may deem proper." However, it appears that the facilities for delivering the water from the city limits of the city of the third class to the corporate limits of the city of the fourth class or village must be owned and operated by the city or village being supplied . Section 91 . 070 authorizes a city , town or village which is being supplied with water by another city to construct the necessary facilities to conduct the water from the supplying city to the supplied city , town or village . - 2 - , I Honorable Ronald M. Belt In Taylor v . Dimmitt , 78 S.W . 2d 841, the Supreme Court held that the statutes applicable to the supply and sale of electricity by a munici- pally owned utility to customers beyond the corporate limits of the city do not authorize the city to construct facilities for the de- livery of such electricity f r om the corporate limits of such city to the customer . The Court noted that a city, town or village being sup- lied with electricity by another city is authroized by Section 91.0 40 to own and operate facilities for delivering the electricity from the supplying city , t own or village . The Court applied the maxim expressio unius est exclusio alterius and held that the supply- ing city had no authority to own and operate transmission facilities from its corporate limits to the supplied city , town or village. Section 91 . 040 , applicable to agreements betwee n cities for a supply of electricity , is substantially identical with the provisions of Section 91.0 70 , applicable to agreements between citi es for the supply of water . By the authority of Taylor v . Dimmitt , supra , it must be conc luded that a city supplying water to another city , town or village does not have the authority to own and operate facilities to conduct the supply of water to the city , town or village being supplied . 2. May a third class city sell water directly to a public institution (public school) in a fourth class city? Section 91 . 050 authorizes a city which owns and operates a system of waterworks to supply water to othe r municipal corporations for use b eyond the cor por ate limits of such city. The Supreme Court has construed school districts to be municipal corporations; Russell v . Frank , 154 S.W . 2d 63 . Therefore , a third class city may sell water directly to a public school located beyond the corporate limits of such city. However , pursuant to Taylor v . Dimmitt , supra , as dis- cussed under· question 1, supra, the city may not own and operate facilities for the delivery of water from its corporate limits to a public school located beyond such corporate limits . 3 . May a third class city sell water directly to an individual inhabitant of a fourth class city? Section 91 . 050 provides that a city which owns and operates a system of waterworks is authorized to supply water to persons for use beyond the corporate limits of such city . Similar authority is con- ferred by Section 91.100. In Speas v . Kansas City , 44 S.W.2d 108, the Supreme Court held that a provision of the charter of Kansas City permitting the city to supply water to nonresidents was not in viola- tion of the Constitution and was lawful . In upholding the lawfulness - 3 - . n .. ~ ' . r • ( ~I ... Honorable Ronald M. Belt of this charter prov1s1on the Court noted with approval the prov1s1ons of Section ~1.050 . Therefore_, it must be concluded that a third class city may sell water directly to an individual inhabitant of a fourth class city. However_, it should be noted that pursuant to the authority of Taylor v. Dimmitt, supra _, and the discussion thereof under question 1 above , the city may not construct facilities beyond its corporate limits for the purpose of supplying an individual with water. 4. May a third class city sell gas to a fourth class city or vil- lage for resale by the fourth class city o~ village to its inhabitants? Sections 91.010 and 91 .450 authorize all cities, towns and villages to own and operate public utilities for the purpose of supplying gas to the inhabitants of such cities, towns and villages. The ownership and operation of gas works by cit ies of the third class is further provided for by Section 88 . 613. Section 91.210 provides that the statutory pro- visions applicable to the purchase of waterworks by cities, towns and villages shall apply to the purchase of gas plants. · Therefore _, the authority for cities of the third class_, cities of the fourth class-and villages to own and operate public utilities for the purpose of supply- ing gas to the inhabitants of such municipal corporations is clearly provided for by the statutes . As noted in the discussion under question 1_, supra_, the sale of water by cities to other cities, towns and villages is a.uthorized by Section 91.050 and such sales are pursuant to the provisions of Sec- tions 91 . 060, 91 . 070 and 91 . 080. Substantially identical ~tatutory provisions for the sale of electricity by a city to other dities towns and villages are found in Sections 91 .020, 91.030 and 9l.o4o. A search of the statutes fails to disclose any statutory authorization for the sale of gas by a. city to other cities, towns or villages. Ta¥lor v. Dimmitt 4 discussed the powers of a municipality as fol- lows, 78 S.W.2d l.c . 8 3 : · .. ·. ·. 11 [2,3] The issue here does not involve the supply of electricity for the lighting of the streets of a city (an essential municipal, if not governmental , function) or the supply of electricity to inhabitants of the city (essen- tially a municipal function), but the right of a city to erect an electric transmission line to ·supply electric service to nonresident con- sumers . Even as to governmental functions, Missouri cities have or can exercise only such powers as are conferred by express or implied provisions of law; their charters being a grant and not a limitation of power, subject .to strict construction, with doubtful powers r esolved against the city. 'It is a general -4- Honorable Ronald M. Belt and undisputed proposition of law that a mu- nicipal c~rporation possesses and can exercise the following powers, and no others: (1) Those granted in express words; (2) those necessarily or fairly implied in, or incident to, the powers expressly granted; (3) those essential to the declared objects and purposes of the corporation--not simply convenient, but indispensable. Any fair, reasonable doubt concerning the existence of power is resolved by the c~urts against the co~~oration, and the p~we r is denied. 1 (citations)' In finding that the city of Shelbina did not have statutory authority to c~nstruct, maintain and operate an elctric transmission line f or the purpose of furnishing service to consumers outside its corporate boundaries, the Court applied the maxim expressio unius est exclusio alterius . This maxim, togeth~r with principles enumerated in regard to the powers of a municipal corp~ration, leads this office to the c~nclusion that ·cities, including cities of the third class, do not have the authority to sell gas to a fourth class city or village for resale by the f ourth class city or vil lage to its inhabitants . Sections 91 . 020 and 91 . 050 are specific authority f or such sales ~f electricity and water. No such specific auth~rity is found in the statutes in regard · t~ the sale of gas . Such authority is not neces- sarily or fairly implied in, or incide.lt t o, any express powers and such authority is not essential to the declared objects and purposes of a third class city. By specifically granting authority for the sales of electricity and water the conclusion is indicated that the Legislature intended no such authorization for the sales of gas . In reaching this conclusion this office has taken into considera- tion the provisions of Section 70.220, which authorizes municipalities to contract and cooperate togetJ~er for the planning, development, con- struction, acquisition or operation of any public improvement or fa- cility or for a common service . This section applies only if the sub- ject and purposes of such contract or cooperative action are \llithin the scope of the powers of such n1unicipality . As noted above the ex- clusion of authorization for the sales of gas by a municipality indi- cates a legislative intent to withhold such authorization. Further- more, research by this office has not disclosed cases which would support a conclusion that the sales of gas by one city to another ci tfr, town or- village is \<li thin the meaning of 11public improvement 11 or 'common service 11 • 5. May a third class city sell gas directly to a public institu- tion (public school) or to an individual inhabitant of a fourth class city? -5- Honorable Ronald M. Belt As noted in the discussion of' the first three questions in this opinion, the authority of third class cities to sell water to private individuals and to municipal corporations beyond the corporate limits of such city is found in Section 91 .050. As noted in the discussion of question 4, immediately preceding, similar authority for the sales of electricity is found in Section 91 .020. A search of the statutes fails to disclose any authority for cities to sell gas to persons and municipal corporations beyond the corporate limits of such city. The discussion under question 4 is equall y applicable to this question and this office concludes that a third class city may not sell gas di- rectly to a public institution (public school) or to an inhabitant of a fourth class city. 6. Are the sales of water by a third class city to a fourth class city, a public institution .(public school) in a fourth class city and to an inhab ~ tant of a fourth class city subject to the jurisdiction of the Public Service Commission? / A review of the history of the Public Service Commission Act is helpful in reaching a definitive conclusion on this· question. The Act was enacted in 1913 and is found in the Laws of 1913, pages 556 through 651 . Article IV of the Act contained the provisions relating to gas corporations, electrical corporations and water corporations and is f ound in the Laws of 1913, pages 602 through 620. -The following sec- tions of the Act, together with the titles of such sections as they appear in the Laws of 1913, are relevant to the question under consid- eration: Section 68. Safe and adequate service; just and reasonable charges. Section 69 . General powers of Commission in respect to gas , '"ater and electricity. Section 70 . Power of Commission to stay in- creased rates. Section 71. Inspection of gas, water and electric meters . These sections enumerate the powers of Public Service Commis- sion in regard to the service and rates of gas, electrical and water corporations . By the terms of each of the sections the powers of the Commission in regard to service and rates extend to "every gas c orpora- tion, every electrical corporation, every v1ater corporation and every municipality* * * • 11 (Emphasis added) General provisions applicable to the Public Service Commission are set fourth in Article I of the Act and Section 16 of Article I, Jurisdiction ·of Commission, enumerates the various utility operations which are subj ect to the jurisdiction, supervision, powers and duties of the Corrunission. Section 16 (7) of the 1913 Act is as f ollows : "7 . To all water corporations, and to the land, property, dams, water supplies, or power stations thereof and the operation of the same v1i thin thi s state . 11 -6- . ' . . . ~ ... . Honorable Ronald M. Belt This subparagraph was amended in 1917 by the addition of the follow- ing proviso, Laws of 1917, page 433 : "Provided, that nothing contained in this act shall be construed as conferring jurisdiction upon the public service commission over the service or rates of any municipally owned water plant or system in any city of this state, ex- cept where such service or rates are for water to be furnished or used beyond the corporate limits of such municipality; " This section as amended in 1917 remains unchanged as 386.250, (7), RSMo . Jurisdiction of the Public Service- Commission over a municipally owned water system which furnishes water to customers beyond the c-orporate limits of such municipality is indicated by Section 386 . 250 (7) . Such jurisdiction is also indicated by the Supreme Court in Pub- lic Service Commission v . City of Kirkwood, 4 S . \v. 2d 773 . In the cited case the Court held that the Commission could not require a municipality to obtain a certificate of convenience and necessity to supply water to persons and private corporations beyond its corporate limits . In reach- ing this conclusion the Court noted that a municipality supplying water beyond its corporate limits i~ subject to the supervision of the Commis- sion as to service and rates pursuant to the statutory provision which is now 386 . 250 (7) . However, it is noted that the specific provisions of the Publj_c Service Commission Act in regard to service and rates, viz Sections 68, 69, 70 and 71, included the service and rates for gas, electrical and water services supplied by municipalities (the substance of the referred sections appeared as Sections 5645, 5646, 5647 and 5648, RSMo 1939, and appear as Sections 393 . 130, 393.140, 393 . 150 and 393 .160, RSMo 1959). Such jurisdiction by ·the Public Service Commis- sion is further indicated by the Supreme Court in Speas v . Kansas City, 44 S.W. 2d 108 . In the cited case certain taxpayers in the City of Kansas City complained, among other things, that the city was supply- ing water to nonresidents with the result of an inadequate supply of vrater for the use of residents . The Court held that complaints of this character must first be heard by the Public Service Commission and referred specif ically to the provisions of what is now Section 386 . 250 ( 7) . Hov1ever, in City of Columbia v . State Public Service Commission , 43 S.W. 2d 813~ the Court construed Section 69 of the Public Service Corrunission Act (Section 5646, RSMo, 1939, Section 393.140, RSMo 1959). In the cited case residents of' the City of Columbia had filed a com- pl aint with the Public Servi ce Commission all eging that rates charged -7- • Honorable Ronald M. Belt by the City of Columbia for electric service were unfair . The Court held that the statutJry authorizations for the Public Service Com- mission to regulate the rates and service of a municipally owned electric light plant were unconstitutional because the title of the Act was insufficient t::> include the subject of municipally ovmed electric plants. It is noted that the sections of the Act in regard to the regulation of municipally 0\l{ned electric plants are the same sections of the Act concerning the regulation of municipally owned water systems. The Court has commented upon City of Columbia v . State Public Service Co:nmission, supra, t o the effect that municipally owned public utilities do not come within the regulation of the Public Service Commission Act; State ex r el . Union Electric Light & Power Co . v . Public Service Commission , 62 S . W. 2d 742, 1. c . 745, and State ex rel . City of Sil;:eston v . Public Se rvice Commission, 82 S . vl . 2d 105, 1. c . 110 . As noted above , Speas v . Kansas City, supra, indicates that the Public Service Commission has jurisdiction over service rendered to nonresi dents by a municipally owned ·Nater system . The Speas case \<I as pending decision in Division 2 of the Supreme Court at the same time that the City of Columbia case was pending decision in Division l of the Supreme Court . The decision in the Speas case was rendered on October 1, 1931 , and a Motion for Rehearing was overruled on December 1, 1931 . The decision in the Cit y of Columbia case was rendered on November 20, 1931, and no Motion for Rehearing , . .;as filed . Theref"Dre, authority for supervision by the Public Service Commission over a municipality supplying VTa·cer beyond its corporate limits as indicated by the Speas case is rendered doubtful by the City of Columbia case . Although the City of Columbia case was decided in 1931, the• specifi c regulatory provisions of Sections 68, 69 , 70 and 71 of the Public Service Commission Act in regard to jurisdiction by the Com- mission over service and rates of municipally owned gas , electri.c and water systems remained in the Revised Statutes of 1939 as Sections 5645, 5646, 5647 and 5648. The 65th General Assembly revised the Mis- souri statutes in 1949 . House Bill 2165 repealed Sections 5645, 5646, 5647 and 5648, RSMo 1939, and reenacted these sections eliminating therefrom regulatory jur isdiction over the service and rates of municipally owned gas , electric and water systems . (See Report on Revision of Statutes, 19494 Volume III, Errata to Appendix to Report No . 11, p . 5 ). Section 56 6 (7), RSMo 1939, related to municipally O\.\rned gas, electric and v1ater systems only, and this paragraph was eliminated f~om the reenacted section . Section 5661, RSMo 1939 (now Section 386 . 360), relating to action by the Commission to enforce the law or its orders, was amended by House Bill 2099 in 1949 by eliminat- ing therefrom municipalities as one of the entities against vThich the Commission was authorized t o tal(e action to enforce the law or its orders . (See Report on Revision of Statutes, 1949, Volume III, Errata to Appendix to Report No . 11, p . 5). -8- . ·• . Honorable Ronald M. Belt Therefore, it appears that the Statutory Revision Session of the General Assembly in 1949 attempted to make necessary amendments to conform the Public Service Commission statutes to the opinion of the Court in City of Columbia v . State Public Service Commission, supra . It also seems clear that no specific statutory authorization over the service and rates of municipally owned gas, electric and water systems remained in the Public Service Commission subsequent to the decision in the City of Columbia case and subsequent to the Statutory Revision Session of the General Assembly in 1949. The only remaining provision of the Public Service Corr~ission statutes which relates in any way to municipally owned water systems is the general provision of Section 386.250 (7). As noted above, Public Service Commission v . City of Kirkwood, supra, and Speas v . Kansas City, supra, indicate tha t this section confers jurisdiction on the Commission over the service and rates of a municipally owned water system rendered to customers beyond the corporate limits of a municipality. However, these cases were decided prior to City of Columbia v. State Public Servic e Commission, supra, and prior to the elimination of municipally owned gas , electric and water systems from the specific regulatory provisions of Sections 393.130, 393.140, 393.150 and 393.160. Therefore , it does not appear that the general provisions of Section 386. 250 (7) , standing alone,·subject the service and rates of a municipally owned water system rendered to customers beyond the corporate limits of such municipality t o the jurisdiction of the Public Service Commission . The conclusion above is supported by the dc:ci ~ ion of the Circuit Court of Cole County rendered on December 1, 1966, in Vall ey Sewage Company v . Public Service Commission, Case No. 23169. In 1965 the General Assembly amended Section 386.250, by adding paragraph 9 which purported to extend the jurisdiction , supervision, powers and duties of the Public Service Commission to the services and rates of privately owned sewer systems. None of the ot her regulatory sections of the Public Service Commission statutes were amended t o include privately owned sewer systems. The Court held that any con- struction of the statute which granted power t o the Public Service Commission to supervise, regulate, oversee or otherwise control in any manner or respect privately owned sewer systems would constitute an unconstitutional delegation of legislative power to the Commission in violation o~ Article III, Section 1 of the Constitution. This office understands that no appeal from this decision was taken and that the judgment therein is final . This office is in agreement with the decision and is of the opinion that the reasoning therein ap- plies with equal force to Section 386. 250 (7). CONCLUSIONS A city of the third class which owns and operates a water system may sell water to a city of the fourth class, to a village , to a -9- Honorable Ronald M. Belt public school in a city of the fourth class and to an individual in- habitant of a city of the fourth class. A city may not own and operate facilities beyond its corporate limits to deliver water sold by it to public or private customers located beyond such corporate limits. Sales of water by a city to public or private customers located beyond its corporate limits are not subject to the jurisdiction of the Public Service Commission. A city of the third class which owns and operates a gas system may not sell gas to public or private customers located beyond its corporate limits . This opinion does not apply to cities having combined waterworks and sewerage systems which fall within the provisions of Section 250.190, RSMo. The foregoing opinion, which I hereby approve , was prepared by my assistant, Thomas J. Downey. Very truly yours , NORMAN H. ANDERSON Attorney General - 10 -