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AGO Opinion 97010

Authority to Pay Municipal Fees with Credit Cards
Opinion 97010




DATE: February 6, 1997




SUBJECT: Authority to Pay Municipal Fees with Credit Cards




REQUESTED BY: Senator Ron Withem

Nebraska State Legislature




WRITTEN BY: Don Stenberg, Attorney General

Timothy J. Texel, Assistant Attorney General






You have requested the opinion of this office concerning the

authority of municipalities to accept credit cards for payment of

certain fees. You specifically requested advice regarding whether

the Legislature would have to affirmatively act in order to allow

cities to perform such a function. Due to the number of variables

involved, and that no one statute or case appears to control the

issue raised, there does not appear to be any one clear answer to

your inquiry.




We note you mentioned in your request that in a cursory review

of the statutes, you found no statutory prohibition against the

acceptance of credit card payments for municipal fees. In our

research, we likewise did not find any statute prohibiting this

practice. However, due to the nature of the area of law involved,

that determination alone does not answer the issue.




It is well established in Nebraska that municipalities have

only those powers which are expressly conferred on them by statute,

are necessary or fairly implied in order to carry into effect some

enumerated power, or are essential to the declared objects and

purposes of the municipal corporation. State ex rel. Ransom v.

Irey, 42 Neb. 186, 60 N.W. 601 (1894); Giger v. City of Omaha, 232

Neb. 676, 442 N.W.2d 182 (1989); Professional Firefighters Local

385 v. Omaha, 243 Neb. 166, 498 N.W.2d 325 (1993). The Nebraska

Supreme Court has also stated that the powers a municipal

corporation may exercise as essential to its declared purposes must

be indispensable, not simply convenient. Giger at 688, 442 N.W.2d

at 192; Professional Firefighters at 174, 498 N.W.2d at 331. Under

normal circumstances it would not seem necessary for a city to

accept credit cards for municipal fee payments in order to carry

out an enumerated power, and such action would not be essential to

the declared purposes of a city.




Nebraska statutes establish several classes of cities,

according to their population. These categories classify cities as

metropolitan, primary, first class, second class, and villages.

Separate sets of statutes establish the powers available to the

cities within each class. There are also statutes which apply to

all cities and villages. See Neb. Rev. Stat. §§ 18-131 to 18-2808.

There is no statute specifically granting all municipalities the

power to accept credit cards as payment for all types of municipal

fees. Despite the lack of explicit statutory language controlling

the issue, some statutes may grant certain classes of Nebraska

cities the authority to accept credit card payments for certain

fees.




One statute which may authorize acceptance of credit cards for

municipal fees is Neb. Rev. Stat. § 18-509. That statute begins by

stating that "The mayor and city council of any city, or the board

of trustees of any village, in addition to other sources of revenue

available to the city or village, may by ordinance set up a rental

or use charge, to be collected from users of any system of

sewerage, and provide methods for collection thereof. . . ." Neb.

Rev. Stat. § 18-509(1) (1991). Similar language is provided

specifically for metropolitan cities in § 14-365.10 (1991). The

term "methods for collection" is not defined, and it is not clear

whether such a term would be broad enough to allow a city to enact

ordinances establishing acceptable methods of payment, such as

credit cards, as well as collection procedures such as mailing

monthly bills. If it were determined that "methods for collection"

includes setting acceptable payment methods, the statute would

appear to allow, by fair implication, municipalities to accept

credit cards for payment of fees if authorized by ordinance.




It should be pointed out that § 18-509 applies only to fees

charged for sanitary sewer services, not all municipal fees. Also,

the statute goes on to state:




All money raised from the charges . . .shall be used for

maintenance or operation of the existing system, for

payment of principal and interest on bonds issued . . .

or to create a reserve fund for the purpose of future

maintenance or construction of a new sewer system for the

city or village. Any funds raised from this charge shall

be placed in a separate fund and not be used for any

other purpose or diverted to any other fund.




Neb. Rev. Stat. § 18-509(2) (1991). Again, very similar language

is found in § 14-365.10.




The above language raises an additional concern. The

acceptance of credit cards would incur the cost of service fees

paid to the credit card companies, which would have to be deducted

from the total payments collected by the municipality. This

payment may conflict with the statutory mandate that "all money"

raised must be used for the required purposes. Under such an

arrangement, some of the funds would be used to satisfy credit card

company service fees and would not be deposited in the separate

fund. It is therefore not clear whether credit card payments could

be accepted. The Nebraska Supreme Court has stated that "Statutes

granting powers to municipalities are to be strictly construed, and

where doubt exists, such doubt must be resolved against the grant."

Professional Firefighters at 175, 498 N.W.2d at 331-32 (1993)

(citations omitted). When analyzed using this standard, the

potential for ambiguity present in §§ 18-509 and 14-365.10

indicates that a municipality may not have the authority to accept

credit card payments for sanitary sewer system use fees.




There are other examples of statutes which may authorize

certain municipalities to accept credit cards, albeit for specific

types of fees. Section 19-1404 states:




19-1404. Municipal heat, light, and ice plants;

management; rates; service. When any such utility shall

have been established, the municipality shall provide by

ordinance for the management thereof, the rates to be

charged, and the manner of payment for service or for the

product.




Neb. Rev. Stat. § 19-1404 (1991).




The language in the above statute appears to provide cities

and villages with the authority to allow payment of certain utility

bills with credit cards. Section 19-1404 does not apply to

metropolitan cities because it appears in chapter 19, article 14 of

the Nebraska Revised Statutes. That article applies to all cities

except cities of the metropolitan class. But the authorization

extends only to the manner of payment for municipal light, heat,

and ice utility services. It does not authorize credit card

payments for any other municipal fees. A similar provision

authorizing municipalities other than metropolitan class cities to

provide by ordinance for the manner of payments for garbage

disposal services is set out in Neb. Rev. Stat. § 19-2106 (1991).




Neb. Rev. Stat. § 16-682 (1991), which pertains to public

utilities operated by cities of the first class, states that "water

taxes, rents, or rates shall be paid and collected and such lien

enforced in such manner as the council or commission, as the case

may be, shall by ordinance direct and provide. . . ." As with the

previously mentioned statutes, this statute allows certain cities

the authority to enact ordinances allowing for the manner of

payment for specified utility services. The statutory language

appears to provide cities of the first class with the authority to

accept credit cards for payment of water service fees if provided

for by ordinance. A similar provision pertaining to waterworks in

cities of the second class and villages is set out in Neb. Rev.

Stat. § 17-538 (1991).




The above examples provide an illustration of the numerous

limitations and variables present in many of the statutes affecting

the area of whether municipalities can accept credit card payments

for fees. Other statutes specifically mention credit card

payments, although not necessarily in the context of municipal

services.




Several statutes explicitly authorize credit card payments for

fees and costs charged or taxed by courts. See Neb. Rev. Stat. §§

25-2710 (1995), 29-424 (1995), and 32-1549(5) (Cum. Supp. 1996).

Individuals may also pay their fines and costs for handicap parking

citations with credit cards. Neb. Rev. Stat. § 18-1741.04 (Cum.

Supp. 1996). Neb. Rev. Stat. § 81-118.01 (1994) allows state

agencies operating a facility in a proprietary capacity to accept

credit cards. Although none of the above-mentioned statutes

directly state whether municipalities can accept credit card

payments, they demonstrate that the Legislature has considered

credit card payments for other state entities and political

subdivisions and enacted specific legislation to allow such

payments. Also, Neb. Rev. Stat. § 77-1702 (1996), which deals

primarily with taxes, states that "Lawful money of the United

States, checks, drafts, money orders or other bills of exchange may

be accepted in payment of any state, county, village, township

school district or other governmental subdivision tax, levy,

excise, duty, custom, toll, penalty, fine, license, fee, or

assessment of whatever kind or nature, whether general or special."

Id.




As is demonstrated by the above examples, some statutes

specifically provide for payments by credit cards, while others

provide a list of means acceptable as payment to governmental

entities, which does not include credit cards. This language could

be interpreted as an indication that the Legislature considered the

issue and decided not to provide political subdivisions with the

authority to accept credit cards for payment of all types of

municipal fees. It is a general rule of statutory interpretation

that mention of one thing implies the exclusion of another. Under

this principle the enumeration of certain powers implies the

exclusion of all other powers not fairly incident to the stated

enumerated powers, and an affirmative description of cases in which

certain powers may be exercised implies a negative on the exercise

of such powers in other cases. Hueftle v. Eustis Cemetery Ass'n.,

171 Neb.293, 296, 106 N.W.2d 400, 403 (1960). See also Op. Att'y

Gen. No. 95-067 (August 31, 1995).




In conclusion, when determining whether municipalities have

the ability to accept credit cards for payment of certain municipal

fees, one clear answer controlling the issue does not appear

available due to the number of variables which must be taken into

account. Considerations such as the class of city involved,

whether the statute includes language requiring all money collected

to be deposited in designated funds, and the type of fee, such as

utility charges or fines, can all affect the answer.




In order for it to be clear that all classes of municipalities

are granted the authority to accept credit card payments for all

types of municipal fees, legislation may be necessary. If the

Legislature would deem such legislation appropriate, it may wish to

consider whether a provision should be included in the legislation

addressing whether incurring credit card service charges are to be

considered a power incident to the establishment of credit card

acceptance agreements, notwithstanding language in certain statutes

that all funds from certain fees be deposited in specific funds.




Sincerely,




DON STENBERG

Attorney General








Timothy J. Texel

Assistant Attorney General

08-15-14.op




cc: Patrick J. O'Donnell

Clerk of the Legislature




Approved:






_________________________

Attorney General