November 9, 1993

Michael P. Ortner
City Attorney
303 N. River Street
Hot Springs, SD 57747

OFFICIAL OPINION NO. 93-13

Utility revenue bonds

Dear Mr. Ortner:

You have requested an official opinion of this Office regarding the following facts.

FACTS:

The City of Hot Springs presently is involved in closing its existing sanitary landfill and setting up a new solid waste transfer station. The City will need to borrow money to fund this project.

Based on these facts, you have asked the following question:

QUESTION:

Can a municipality, under the provisions of SDCL 9-40-1, issue utility revenue bonds to fund the solid waste transfer station?

SDCL 9-40-5 provides for issuance of revenue bonds for the purpose of defraying the cost of erecting, acquiring or establishing a utility. Further, SDCL 9-40-2 provides, in pertinent part, that "the term `utility' as used in this chapter shall mean any such system or part of system as referred to in <185> 9-40-1."

SDCL 9-40-1 provides municipalities with the authority to acquire and operate utility systems:

Any municipality may purchase, construct or otherwise acquire, establish, equip, maintain, operate, extend or improve . . . any system or part of system for the collection, treatment and disposal of sewage and other domestic, commercial and industrial wastes; . . . or any combination of such light, heat and power, waterworks, sewerage or flood and drainage control systems, together with extensions, additions, and necessary appurtenances. . . . (Emphasis added.)

The "classic" municipal waste utility is, of course, a sewage treatment facility. Your specific issue raised within the confines of this statute is whether the phrase "other domestic, commercial and industrial wastes" includes solid waste not disposed of in sewerage systems.

In order for the phrase "and other domestic, commercial and industrial wastes" to have meaning within the statute, it must be defined as something other than sewage or that which is disposed of in sewerage systems. "The law must be so construed as to give effect to all of its provisions, if possible." Nelson v. School Board of Hill City, South Dakota, 459 N.W.2d 451, 455 (S.D. 1990). Additionally, the Legislature must not be presumed to have inserted surplusage in its enactments. Revier v. School Board of Sioux Falls, 300 N.W.2d 55, 57 (S.D. 1981). In this instance, "sewage" encompasses domestic and nondomestic or industrial waste passing through sewers; consequently, to limit the definition of "other domestic, commercial and industrial wastes" to material flowing through sewerage systems would be to presume that the Legislature intended to make those terms mere surplusage. Since the canons of statutory construction do not so allow, the phrase in question must be given wider meaning in order to give effect to its language.

Having concluded that the statute encompasses more in the way of utilities than the routine sewage treatment plant, one then must determine if the statutory phrase I highlighted above includes "solid waste." Though the Code does not define "domestic, commercial and industrial waste," it does provide a definition for "solid waste." Subdivision (17) of SDCL 34A-6-1.3 reads, in part:

`Solid waste,' any garbage, refuse, sludge from a waste treatment plant, water supply treatment plant or air pollution control facility and other discarded materials, including solid, liquid, semi-solid or contained gaseous material resulting from industrial, commercial and agricultural operations, and from community activities. . . .

It is clear that South Dakota's definition for "solid waste" closely parallels and, in fact, includes the Legislature's "other domestic, commercial and industrial waste." Consequently, the material anticipated by the statute is the material anticipated by the definition. I conclude that the terms in question do, in fact, encompass solid waste transfer stations. Those clearly are systems designed to handle "domestic, industrial or commercial waste" in the larger sense of that phrase.

In my opinion the City may issue utility revenue bonds to fund this transfer station. The answer to your question is "yes."

MB:SB:mjj