Request By:
Honorable W. H. Cunniff
Mayor, City of Earlington
Earlington, Kentucky
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Walter C. Herdman, Assistant Deputy Attorney General
This is in answer to your letter of June 29 concerning the proposed financing of the Stewart Creek Watershed Project in the city of Earlington. You relate that the city council has received assistance from the U.S. Soil Conservation Service in developing a watershed under Public Law 83-566, which includes two floodwater retarding structures and 9100 linear feet of riprap channel. When the project is completed, the operation and maintenance of same is to be performed by the city at an estimated annual cost of $1240 which will come from the general fund of the city. However, prior to submitting the complete plan to a congressional committee, the soil conservation service requests that you enter into an operation and maintenance agreement with them. The basic question raised is whether or not the city can obligate money from the general fund beyond the existing fiscal year.
From the above, we assume that the soil conservation service desires the city to enter into a long term agreement or contract for the maintenance of the project at approximately $1240 annually. Such agreement raises two legal objections. First, whether or not the present city legislative body can bind its successors for the operation and maintenance of the project; and, second, whether or not such an agreement would be in violation of Sections 157 and 158 of the Constitution prohibiting the city from obligating itself over a period of years thereby exceeding the anticipated revenue for the initial year of the agreement.
With respect to the power of the city council to enter into a contract that will extend beyond the term of its members, a distinction is to be drawn [based upon the subject matter of the contract] as to whether it is legislative or governmental in nature or whether it is of a business or propriety nature. With respect to the former, the city council's power is limited and not binding upon its successors. As to the latter, it is not. The watershed project in question would in our opinion be considered of a governmental nature rather than a business or propriety nature, and thus would fall within the category that prevents the city from entering into an agreement to obligate funds over a period of years and beyond the term of the present legislative body. Referring to 56 Am.Jur. 2d, Mun. Corps., Pages 207-207, we quote the following:
"Thus, where the contract involved relates to governmental or legislative functions of the council, or involves a matter of discretion to be exercised by the council unless the statute conferring power to contract clearly authorizes the council to make a contract extending beyond its own term, no power of the council so to do exists, since the power conferred upon municipal councils to exercise legislative or governmental functions is conferred to be exercised as often as may be found needful or politic, and the council presently holding such powers is vested with no discretion to circumscribe or limit or diminish their efficiency, but must transmit them unimpaired to their successors. . . ."
See also McQuillin, Mun. Corps., Vol. 10, § 29.101.
Next concerning the possible constitutional objection, the courts have declared that the entire amount of the obligation for whatever number of years must be considered in the initial year in determining the total indebtedness that the city will be obligated for as opposed to its anticipated revenue for said year. Thus, if the total indebtedness exceeds the anticipated revenue in the initial year, § 157 would be violated. See
Board of Education of Christian County v. Board of Trustees of Hopkinsville Public Schools, 154 Ky. 309, 157 S.W. 697 (1913). See also KRS 92.360 and McQuillin, Mun. Corps., Vol. 15, § 41.16.
Under the circumstances, it would appear that the city cannot enter into an agreement with the soil conservation service to obligate itself to operate and maintain the project beyond the initial legislative term, which is two years. The agreement could, of course, be made renewable at the option of successive legislative bodies. Also, aside from this objection, the constitutional debt question could certainly be involved where the agreement or contract extends for a long term of years.