Metropolitan Utilities District v. City of Omaha, 171 Neb. 609

Summary

The Nebraska Supreme Court considered whether a metropolitan utilities district and the City of Omaha were authorized to contract for the district to collect the city's sewer service charges and discontinue water service for nonpayment. The court upheld the constitutionality of the relevant legislation and the validity of the city's sewer-use ordinance, but held that the contract was inoperative because its service-cost allocation was not based on a reasonable method as required by statute. The cause was remanded for judgment consistent with the court's holdings, with appellate costs apportioned between the parties.

Holdings

1. L.B. 295 authorized and empowered the City of Omaha and the Metropolitan Utilities District to enter into a contract under which the district could use its water-utility facilities and services to collect sewer-use or rental fees lawfully imposed by the city.
2. The use of the phrases requesting the service and using the service in the applicable statutes did not create two distinct classes of sewer users and therefore did not constitute unconstitutional special or class legislation.
3. The Legislature could validly authorize the district to discontinue water service to customers who failed to pay sewer-use charges imposed by Omaha under the contract and ordinance.
4. The contract was inoperative and without force because the district's method of calculating its charge did not allocate the cost of the consolidated operation on a reasonable basis as required by section 14-1041, R.R.S.1943.

Questions Presented

1. Whether L.B. 295 authorized Omaha and the Metropolitan Utilities District to enter into a contract for the district to collect Omaha's sewer-use charges.
2. Whether the statutory distinction between persons requesting sewer service and persons using sewer service constituted unconstitutional special or class legislation under article III, section 18, of the Nebraska Constitution.
3. Whether L.B. 295 and Omaha Ordinance No. 21141 validly authorized discontinuance of water service for failure to pay sewer-use charges.
4. Whether the contract complied with section 14-1041, R.R.S.1943, requiring the cost of consolidated utility operations to be allocated on a reasonable basis.
5. Whether the district court's allocation of costs should be modified on appeal.

Disposition

affirmed