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Unilateral Rate Increase Allowed
Publication year - 1996
Publication title -
journal ‐ american water works association
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.466
H-Index - 74
eISSN - 1551-8833
pISSN - 0003-150X
DOI - 10.1002/j.1551-8833.1996.tb06641.x
Subject(s) - debt , creditor , school district , business , urban district , finance , geography , environmental planning , sociology , pedagogy
In 1996, Lafayette, Louisiana, and Waterworks District Number Four entered into a 30‐year agreement whereby the district would build a water system and the city would sell and distribute water to customers in the contract area. The district's creditors were protected by delegating to the city virtually all management of the district's system in the affected area. The agreement also provided that the rates charged by the district and the city would be identical. This suit arose when, in 1981, the city increased water rates without the district's approval. The trial court concluded that the city was justified in raising the rates to continue to service its debt and operate its system in compliance with the bond resolutions.