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TOWNSHIP SPRING GARDEN v. YORK AREA TRANSPORTATION AUTHORITY AND HALLAM BOROUGH (03/29/89)

decided: March 29, 1989.

TOWNSHIP OF SPRING GARDEN, APPELLANT
v.
YORK AREA TRANSPORTATION AUTHORITY AND HALLAM BOROUGH, APPELLEES. TOWNSHIP OF SPRING GARDEN V. YORK AREA TRANSPORTATION AUTHORITY AND HALLAM BOROUGH. HALLAM BOROUGH, APPELLANT



Appeals from the Order of the Court of Common Pleas of York County in the case of Township of Spring Garden v. York Area Transportation Authority v. Hallam Borough, No. 87-SU-02191-08.

COUNSEL

Donald L. Reihart, Laucks & Monroe, for Township of Spring Garden, appellant.

Joseph C. Korsak, with him, Robert H. Griffith, for Hallam Borough, appellee.

Judges Barry, Colins and McGinley, sitting as a panel of three. Opinion by Judge McGinley.

Author: Mcginley

[ 124 Pa. Commw. Page 443]

The Township of Spring Garden (Spring Garden) appeals an order of the Court of Common Pleas of York County (trial court) denying Spring Garden's motion for summary judgment and holding in favor of the York Area Transportation Authority (Authority), declaring Spring Garden and Hallam Borough (Hallam) members of the Authority and concluding that the Authority lawfully rejected Hallam's and Spring Garden's offers to withdraw from the Authority. Hallam also appeals the trial court's order*fn1 at No. 968 C.D. 1988 and intervenes in the appeal of Spring Garden at No. 854 C.D. 1988.

[ 124 Pa. Commw. Page 444]

The Authority is a municipal authority, which was formed under the Municipal Authorities Act of 1945 (Act), Act of May 2, 1945, P.L. 382, as amended, 53 P.S. §§ 301-322. The purpose of the Authority is to provide mass transportation for people living in the York County area. The Authority was incorporated with the Department of State on November 1, 1974, by the County of York, Pennsylvania (County). Prior to this incorporation, seven municipalities, including Hallam and Spring Garden, entered into an agreement with the County concerning the formation of the Authority and their participation therein.*fn2 The Articles of Incorporation were prepared

[ 124 Pa. Commw. Page 445]

    by the County Commissioner's Office. Under Section (e) of the Articles the municipalities were not named as members. Instead, individual representatives of each member township, city, or borough were named. (See RR at 107a.)

The by-laws adopted by the Authority (RR at 255a) do not set forth the identity of the members of the Authority at the time they were adopted, but provide in Section 2.02 for the appointment to the Board of the Authority of nine members, which would include at least one member from each of the participating municipalities. Section 8.01 provides for additional municipalities to become members. The original by-laws contain an outright prohibition of withdrawal during the first five years of operation. Section 8.02, unaffected by any amendment, provides:

Withdrawal from Authority. No original participating municipality shall withdraw from the Authority at any time within the first five years of joining the Authority and except in accordance with the law. Any municipality withdrawing from the Authority shall give one (1) year notice, said notice to be in writing and given to the Authority and all participating municipalities.*fn3 (RR at 267a (emphasis added).)

Each of the municipalities executed identical resolutions concerning funding of the Authority. Spring Garden adopted its resolution on January 12, 1976. Section 2 of that resolution provides:

The Township of Spring Garden is hereby committed to the operation of the York Area Transportation

[ 124 Pa. Commw. Page 446]

Authority for a period of not less than Five (5) years and, furthermore, hereby agrees to fund its share of the monies to York Area Transportation Authority to defray all expenditures (operation and capital) incurred by the York Area Transportation Authority, including required maintenance of effort, which are not met by the York Area Transportation Authority, through its operating and other revenues, or by Pennsylvania and Federal grants, for a period of five (5) years from the first day of January 1977 thru the 31st day of December 1981. (RR at 264a.)

On November 22, 1977, Hallam adopted a similar resolution. Spring Garden was sent a resolution by the Authority on March 18, 1982, which would have continued the funding for a period of three years. The Spring Garden Board of Commissioners refused to adopt this resolution and on December 31, 1986, Spring Garden adopted a resolution to withdraw from the Authority. On January 6, 1987, notice of that resolution was given to the Authority. Hallam adopted a similar resolution indicating its desire to withdraw from the Authority and notice of that resolution was given to the Authority. On January 8, 1987, the Authority's solicitor notified Spring Garden that it would not process a withdrawal and demanded that the requirements of the Act be met. At a board meeting on April 22, 1987, the Authority voted against allowing Spring Garden and Hallam to withdraw from the Authority.

Spring Garden filed an action seeking declaratory judgment on the rights and obligations of Spring Garden. Hallam was granted intervention in that action. Spring Garden also filed a motion for summary judgment on November 18, 1987. The trial court denied Spring Garden's motion and ruled in favor of the Authority on

[ 124 Pa. Commw. Page 447]

March 25, 1988, declaring that Spring Garden and Hallam had duly become members of the Authority and may not withdraw without the official consent of the Authority pursuant to Section 3.1 of the Act, 53 P.S. § 304.*fn4

Spring Garden makes three arguments: that the Authority was incorporated solely by the County and therefore is not a "joint authority" within Section 3 of the Act, 53 P.S. § 303, and Section 3.1 of the Act; and that even if the Authority was a "joint authority," Spring Garden did not satisfy the requirements of Section 3 of the Act to become a statutory member of the Authority; and, lastly because it was not an incorporator of the Authority and has never taken the necessary steps to become a statutory member of that Authority, it is not subject to the withdrawal requirements of Section 3.1 of the Act. Spring Garden asserts they did nothing other than participate with the Authority and that they never became the equivalent of a statutory member.

[ 124 Pa. Commw. Page 448]

The Authority argues that Spring Garden and Hallam are original members of the Authority, and after thirteen years of continuous participation they share responsibility for many long term obligations and therefore the Board of the ...


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