STATE OF FLORIDA
v.
CITY OF BARTOW, ETC.
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The Florida Supreme Court upheld the validity of refunding bonds issued by the City of Bartow, securing them with ad valorem taxes and net revenues from the city's municipal light and water system. The court rejected arguments that pledging utility revenues improperly changed the nature of the indebtedness or exempted it from homestead taxation.
The court held that the city has authority to pledge utility net revenues as security for refunding bonds under its charter and state law, that the nature of the indebtedness is not changed by the refunding, and that homesteads remain subject to taxation for payment of such bonds.
“The city charter of the City of Bartow (Chapter 9683, Special Acts of 1923) authorizes the City to borrow money and issue bonds secured by any public utility owned by the City.”
Establishes the source of the city's authority to pledge utility revenues as bond security.
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Join FLexlaw to unlock all legal intelligenceThe City of Bartow issued refunding bonds (Series of 1940) to reduce carrying charges on existing bonded indebtedness. The refunding bonds were secure…
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This appeal is from a final decree validating refunding bonds of the City of Bartow, the main purpose being to reduce the carrying charges on the City’s bonded indebtedness. The refunding bonds are labeled “Refunding Bonds, Series of 1940” and are secured by ad valorem taxes on all taxable property in the City, in addition to the net revenues derived by the City from the operation of its municipally owned light and water system in an amount which with other revenues will be sufficient to service the refunding bonds, provided that such revenues shall not be less than 50 per cent of the total amount thereof for any one year.
It is contended that the City has no authority to pledge the unappropriated net revenues of its light and water system, that such appropriation increases the security for its indebtedness and so changes the nature of the indebtedness as to preclude the taxation of homesteads for its payment.
*69The city charter of the City of Bartow (Chapter 9683, Special Acts of 1923) authorizes the City to borrow money and issue bonds secured by any public utility owned by the City. The bonds which the City seeks to refund were so secured and the refunding Act, Chapter 15772, Acts of 1931, authorizes the pledge of such funds to service the refunding bonds. This Court approved a similar procedure in State v. City of Sanford, 128 Fla. 171, 174 So. 339.
The City is at present obligated to pay 50 per cent of the net revenues of its light and water system with all other unappropriated revenues from sources other than ad valorem taxes to service the outstanding bonds and we do not construe the refunding resolution brought in question to do more than this. Neither do we consider the nature of the indebtedness to have been changed. It is now represented by outstanding bonds and under the refunding resolution will continue to be so represented. Nothing has changed the nature of the indebtedness and no satisfactory reason is shown why homesteads should not bear their part of the burden.
In response to the suggestion that the refunding bonds should be approved by a vote of the freeholders, it is sufficient to say that they do not change the nature of the indebtedness or increase the security so there is no merit to this contention. We do not deem it necessary to cite authority on this point.
Affirmed.
Buford, Chapman, Thomas and Adams, J. J., concur.
Brown, C. J., and Whitfield, J., not participating.
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Citator
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State v. City of New Smyrna Beach, 148 Fla. 482 (Fla. 1941)…tence for years and is protected by a validating decree of the circuit court. There is no doubt of the power of the city to continue the pledge in the new refunding bonds. State v. City of Sanford, 128 Fla. 171, 174 So. 339; State v. City of Bartow, 147 Fla. 67, 2 So. (2nd) 125. Under these circumstances it was not essential that the issue of the latter be approved by the freeholders. State v. City of Miami, 142 Fla. 284, 194 So. 792; State v. City of Fort Myers, 145 Fla. 135, 198 So. 814. It is next cont…
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State v. THE City OF Lakeland, 154 Fla. 137 (Fla. 1943)…t on rehearing in lieu of Mr. Justice TERRELL and adheres to the SEBRING opinion. Mr. Justice ADAMS dissents. Mr. Chief Justice BUFORD is convinced that the holding in the SEBRING opinion overrules the holding in the case of State v. City of Bartow, 147 Fla. 67, 2 So. (2nd) 125, and that the Bartow case insofar as it is overruled herein, should be definitely so held. The majority of the members of the Court who adhere to the SEBRING opinion think the two opinions are not in conflict, while Mr. Justice ADA…
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McNAMARA v. City OF Jacksonville Beach, 159 So. 2d 97 (Fla. 1963)…PER CURIAM. Affirmed on the authority of State v. City of Bartow, 147 Fla. 67, 2 So. 2d 125; State v. City of Bartow, Fla., 48 So. 2d 747. DREW, C. J., THOMAS, ROBERTS and THORNAL, JJ., and FITZPATRICK, Circuit Judge, concur.…
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- State v. City of Sanford, 128 Fla. 171 (Fla. 1937)