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RAYMOND LAUX AND THOMAS COSGROVE v. BOROUGH HARVEYS LAKE AND GENERAL MUNICIPAL AUTHORITY HARVEYS LAKE BOROUGH (04/16/71)

decided: April 16, 1971.

RAYMOND LAUX AND THOMAS COSGROVE
v.
BOROUGH OF HARVEYS LAKE AND THE GENERAL MUNICIPAL AUTHORITY OF HARVEYS LAKE BOROUGH



Appeal from the decision of the Court of Common Pleas of Luzerne County, No. 5 May Term, 1970, in case of Raymond Laux and Thomas Cosgrove, Plaintiffs v. Borough of Harveys Lake and the General Municipal Authority of Harveys Lake Borough, Defendants.

COUNSEL

Joseph V. Kasper, with him Cardoni, Gallagher, Coslett, Sobota, Podcasy & Kasper, for appellants.

Donald D. McFadden, with him Flanagan, Doran, Biscontini & Shaffer, for appellees.

President Judge Bowman, and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Manderino, Mencer and Rogers. Opinion by Judge Rogers.

Author: Rogers

[ 2 Pa. Commw. Page 298]

This suit is between those who would build a sewer in the Borough of Harveys Lake, Luzerne County, and those who would prevent such construction.

Among the proponents of the sewer are a majority of Borough Council who created the General Municipal Authority of the Borough of Harveys Lake in January 1970. On March 26, 1970, the Authority submitted to Borough Council a budget of preliminary expenses for the year 1970 in the amount of $4,400, stating its intention to "repay this amount when the sewer project is financed by municipal bonds." On May 20, 1970, Council voted four to three to lend $4,400 to the Authority and the Borough's budget was amended to include an item of appropriation for this expenditure. On May 22, 1970, this equity suit was commenced, complaining that the action of the Borough was illegal because not in the form of an ordinance as allegedly required in the case of a loan. Borough Council met on May 26, 1970, and again by four to three vote adopted an ordinance subsequently duly approved by the mayor and advertised, modifying the budget by transferring $4,400 to an appropriation to the Authority. The preamble of the Ordinance referred to a grant of funds for preliminary

[ 2 Pa. Commw. Page 299]

    work on the sewer. On June 1, 1970, the Borough and Authority filed Preliminary Objections inter alia in the nature of a demurrer. After hearing, the trial judge dismissed the application for Preliminary Injunction and the parties have stipulated that we should decide this appeal on a substantive and final basis.

The appellants contend first that if this was a loan to the Authority it is invalid because Council's action taken May 20, 1970, was by motion only and therefore did not satisfy the requirements of the Borough Code that matters of a legislative character be approved by the mayor,*fn1 recorded in the ordinance book,*fn2 and be based upon an ordinance.*fn3 Second, the appellants contend that the grant made by the ordinance of May 26, 1970 was a waste and mishandling of public funds amounting to an abuse of discretion because the Authority had asked for a loan. Neither attack has merit.

As to the first, the Borough Code provides: "The council in its reasonable discretion may, in any year, by motion, modify the budget after its final adoption. New appropriations, supplemental appropriations and transfers from one appropriation to another may be made during its fiscal year, either before or after the expenditure is authorized or ratified after the expenditure is made, provided it is within the current year's revenues, or money therefore properly made available through borrowing as allowed by law." The Borough Code, supra, Section 1312, 53 P.S. 463 12. (Emphasis supplied.)

The record clearly demonstrates that the appropriation to the Authority, made by ...


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