Request By:
Mr. J. Thomas Shewmaker
Muhlenberg County Attorney
P.O. Box 302
Greenville, Kentucky 42345
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
You have a problem concerning the original coal severance program. We assume you refer to the coal producing county development fund as set out in KRS 42.300 et seq.
Muhlenberg County used such fund money in the purchase of sewer lines and an interest in a lagoon used in connection with the sewerage system in the city of Drakesboro.
A question has arisen concerning whether the county can sell its interest in such assets.
KRS 42.300 speaks in terms of public improvements, which include sewer projects. The total language of the statute implicitly suggests long term capital expenditures.
KRS 65.010 provides that any county may sell and convey any real estate owned by it upon a determination by fiscal court that such realty is "no longer needed to carry on the governmental functions of the county or that other property is more suitable for the governmental purpose to which the property to be sold and conveyed has been dedicated."
Since we assume the fiscal court and the Department of Finance felt that the coal severance tax money was necessary for this sewer project as a viable and continuing need and governmental function, we are of the opinion that to sell these assets and thus drop this project from the county's accountability would be arbitrary and against the practical intendment of this legislation. We assume that there is no intent to sell these assets and use other county property in carrying out this original sewer system plan. Even if this road-block could be hurdled [which we doubt], there are other notable impedimenta.
Such a sale, by resolution or order, even if this were truly surplus property [which it isn't], could not be effected as to impair existing obligations of contract. "The strength of every contract lies in the right of the promisee to rely upon the constitutional security against impairment of its obligations by legislation and in the right to resort to courts of public justice for the redress of its violation." Board of Education v. City of Louisville, 288 Ky. 656, 157 S.W.2d 337 (1941) 343.
Where federal sharing money is involved, such a sale could not be valid if it violated any federal county, state, agreement involving such federal participation.
The central point is that if the project were a valid and needed county project then, only a short time ago, it is valid now because of its nature. Your letter discloses no basic reason for the assets being declared surplus to county governmental functions.
The stern test in KRS 65.010 is found in the phrase "no longer needed. " From the facts given and under the ordinary meaning of the language, it is our view that the fiscal court would be unable to rationally show that such project is no longer needed. Baker v. White, 251 Ky. 691, 65 S.W.2d 1022 (1934).
The question about disposition of proceeds upon sale of the assets under the above analysis does not require an answer.