Request By:
Mr. Charles S. Foster
Attorney at Law
908 Poplar Street
Benton, Kentucky 42025
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
You represent a less than countywide fire protection district established under KRS Chapter 75 in 1978. For the current year, the district has taken steps necessary to levy a property tax pursuant to KRS 75.040. However, until such time as the taxes become due and payable and are collected, the district needs to borrow a small amount of money ($3,000 to $10,000) to pay for various expenses and operating costs.
Your question: Can the district board of trustees borrow such money?
A fire protection district established under KRS 75.010, et seq., would be considered a political subdivision and a separate taxing district under Section 157 of the Kentucky Constitution. Under KRS 75.031 and 75.040, it is our opinion that the board of trustees of the district has the implied power to borrow money in anticipation of revenue accruing to the district this year. The purpose of Section 157 and Section 158 of the Constitution is to require political subdivisions and separate taxing districts to adopt a pay-as-you go plan, and not to incur obligations in excess of their current revenues, without a two-thirds vote of the people.
Payne v. Covington, 276 Ky. 380, 123 S.W.2d 1045 (1938). Like counties, this fire protection district is given explicity stated powers by the statutes and those implicit powers reasonably necessary and incidental to the exercise of the explicit powers.
Edwards v. Logan, 244 Ky. 296, 50 S.W.2d 83 (1932).
Thus we conclude that the district board of trustees has the authority to borrow money for district purposes in anticipation of revenue that will be available in connection with the 1980 budget. The members of the board, or a designated member thereof, can sign the note.
In connection with the concept of "current revenues" or "revenue available for the 1980 budget" , we are speaking of such revenues that the district has actually provided for, through its tax rate, in reasonable and good faith anticipation of collecting.