Untitled Texas Attorney General Opinion ( 1985 )

_- l 3 The Attorney General of Texas JIM MAllOX Xawh 5, 1985 Attorney General Su~rem Cowl Bulldin EonorablcTom Craddick opinion No.Jl4-2g7 P. 0. Box12548 chairmalI *uatln.lx ?0?11- 254s Natural Resourccs~Comittec ' RW Jurisdictionover rstes 5121475.2501 Texas Eouae of Rqreseotatives charged to customers outside Telex 91~574.1357 1IIecppi.f 5121475.9255 P. 0. Box 2910 the boundariesof the Lakevay Austin, Texas 18,769 WunicipalUtility District 714 Jackwn. Suite 700 Dear Representat!.ve Craddick: Dalles. TX. 75202M.05 2W742.5944 You inform us that the Lakeway Municipal Utility District [hereinafterthe Diatrictlwas formed in 1972. and in 1974, a group of 4S24 Albelt Ave.. suite 150 people living artside the District incorporated under general law El Pas.. lX 799052793 provisions and ‘beceme the Village of Lakeway [hereinafter the QlY533-34S4 Village]. Since~incorporation,the Village has not undertaken to provide water for ita residents. but instead the Village residents 901 Teaas. Suite 700 purchasevster fcom the District. In that regard you ask: Houstoti.D(. 77002-3111 ?13&?23-5555 What governments1agency or body has jurisdic- tion aver the rates charged to customers outside the bc'undariesof the Municipel Utility District BM Broadway. Suite 312 Lubbock. TX. 79491.3479 of Lakeuay? K%i74?-5235 The fixing of domestic utility ratea is a legislativefunction: however, the st~lteleaislaturena``delenate the fixinn of such rates 4309 N. Tenth. Suite 6 McAllwl. lx. 75501-1555 to a subordinatebody, See Railroad Co&issiou v. %&ton Natural Gas 512m24547 &o-, 289 S.U.:!il 559 (Tu. 1956). The state of Texaa has delegated .the function of ~fixingand regulatingdomestic retail water rates to various state s.genciesand political subdivisions. Among these 209 Main Ptua. SuIta 1w agencies and politicalsubdivisionsare the Public Utility Commission, San Antonio. TX.782C5.2797 the Texas Depcutnent of Water Resources, the municipal utility 5121225-4191 districts,sod rmmicipalitiaaof the stats. See V.T.C.S. art. 1446~. 9Il6, 17, 22; --- see also Water Code 554.519. - We believe that the District has the authority initially to fis rates charged ':o the residents of the Village. Lakavay Nunicipal Utility District is a political subdivision of the state organizei under chapter !~4of the Water Code. The District vae organized lr 1972 by order o:Ethe Texas Water Rights Commissionpursuant to article XVI. section 59 .ofthe Texas Constitution. See Water Code 654.001 et * The Distr,Lctis given authorityto supplywater and set rates 5 areas contiguousto or in the vicinity of the district." -See Wats1 p. 1336 NonorablaTom Craddick - Page 2 (Jn-297) Code 154.519(a).(d). Section 54.519 of the Water Code provides in part: (a) A diatrl~ct may purchase, construct, acquire, own. operate. repair, improve, or extend all vorka, imp!:ovemeuts,facilitias. plants. aquipmut, sad a~@iauces oacassazy to provide a water system and e sewer system for areas conti- guous to or in -the vicinity of the dietrict provided the diat;lct doss not duplicatea service of another publishagence. A district shall not prwide a water or a sanitary sewer system to seIva areas outelde the district which is also within a city w:lthoutsecuring a reeolutiou or ordinance of the; city granting consent for the district to serve the area within the city. . . . . (d) A district is authorized to asteblish. maintain, revise, charge, and collect the rates. I~- fees. rentals. C:olla.or other charaea -~ the for `` use. services; ,md facilitiesof the water and eawer system which provide service to areas outside the d,iatrict which are considered hacessary and \Rlich may be higher than those charged for comparableserviceto residentswithin the district. (e) The rates. fees. rentals,tolls, or other charges shall b#!at least sufficiautto meet the expanse of operating and maintainiugthe wstar and sewer system serving areas outside the district and to pay tL: principal of and iotaraat and redemption price 011 bonds issued to purchase, construct,acquire. own, operate,repair. improve, or axtend the ayetam. (Enphasiaadded). At the time the District began providingwster to the areas now constituting the Vlllag``, the Village was not an incorporated municipality. Thus, it is our couclusion that the District has jurisdictionto establish the initial retail rates for water cervices to residmts of the Vill.age. See Taxes Water Rights Commission I. City of Dallas, 591 S.V.Zb 609Tex. Civ. App. - Austin 1979. writ ref'd n.r.e.1; ef. LoweI: Colorndo River Authority v. City of San Uarcos, 523 S.U.2d 6ra45 (Tex. 1975) (home rule city presents a different situation). We note that the Village of Lakaway has no jurisdictionto regulate the ratee chsrged by the District to its residents. See Village of Lakeway v. Lakeway Municipal Utility p. 1337 RouorableTom Craddick- Puile 3 (m-297) District No. 1, 657 S.U.Z#I912 (Tex. App. - Austin 1983. writ ref’d n.r.6.). Sectiou 11.041(a) of the Water Code authorizes “Ia]ny person entitled to receive or uae water from any . . . lake or from any conserved or stored auuply [to] present to the [Texas Water Comeission]a written pet Lotion”to contest the rates charged by the District. See Water Code 111.061(a)(l.2. 3); see also Texas Water Rights ComGion v. City;of Dallas, suprclat 612. The Texas Water Commission is further auth,orizad“to fix reasonable rates” for the water supplied to the Village by the District. See Water Code 112.013. Sea also Texas Water Rights Comissiou v. zy of Dallas, a. Therefore. we conclude that any person residing within the District or the Village my petition the Texas Water Commission to the District. The Texas Water Commission review the rates charged lty’ may then determinewhether the rates charged by the District to the residentsof the Village arc reasonable. SUMMARY The Lakeway Municipal Utility District is authorizedpursuant to section54.519 of the Water Code to fix water rates charged to residents of the Village of Lakeway. In addition, the Texas Water Cossslssio~has jurisdiction, pursuant to sections 11.041 and 12.013 of the Water Code, to review the rates charged by the District as to reasonableness. JIM HATTOX Attorney General of Texas TOM GRRRN First AssistantAttorneyGeneral DAVID R. RICRARDS ExecutiveAssistantAttorney General RICK GILPIN Chairman,Opinion Committee Preparedby Tony Guillory Assistant Attorney General. p. 1338 EonotabloTom Ctaddick - @&)a 4 (J?+297) APPROVED: OPINION COtQlITTEE Rick Gilpin, Ckairmnn Colin Carl Susan Garrison Tony Cuillory Jim Woellingct Jennifer Riggs Nancy Sutton p. 1339