Request By:
Mr. Wilburn J. Pratt
Commissioner, Department
for Local Government
Capital Plaza Tower
Frankfort, Kentucky 40601
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Walter C. Herdman, Assistant Deputy Attorney General
This is in response to your letter of June 26 in which you refer to the requirement under Senate Bill 18 [Ch. 91A KRS] that the Department for Local Government make available its assistance to all cities in enabling them to meet the requirements of the Act. You initial question has multiple parts and reads as follows:
"The Department would like to know if cities that are on a calendar, or other fiscal year, are required to change to a July 1 through June 30 fiscal year. If this is necessary, when do they have to meet these requirements? If it is not necessary, will they have until July 1982 to conform to the accounting and other requirements of the act? We feel that cities need some time to phase in the accounting, budgeting and auditing process in order to eliminate some public relations problems and lead to a better product."
In conjunction with this question you cite the following constitutional and statutory provisions:
"Section 3, subsection 4 states:
'The budget ordinance of a city shall cover one fiscal year, except any city required to adjust its fiscal year to conform to the fiscal year set out in Section 169 of the Kentucky Constitution may utilize for transition purposes a fiscal year of any length not to exceed 18 months. Any such adjustment shall be completed not later than two years from the effective date of this act.'
"Section 169 of the Kentucky Constitution states:
'Fiscal year. -- The fiscal year shall commence on the first day of July of each year, unless otherwise provided by law.'
"KRS 92.020 states:
'Fiscal year for cities other than the first class. -- The fiscal year of cities other than the first class may begin on January 1, June 1, or July 1. Any city desiring to change the date of the beginning of its fiscal year may operate for the portion of any year necessary in making the change.'
Our response to the initial part of your question would be in the negative. Section 169 of the Constitution gives the legislature the right to provide optional fiscal years for those cities that desire to adopt them. You will note that KRS 92.020 has not been changed and continues to provide that the fiscal year for cities other than the first class may begin on January 1, June 1, or July 1. Subsection (4) of Section 3 of Senate Bill 18, quoted above, simply provides that where a city is required to adjust its fiscal year to that provided in § 169, the transition period is allowed. Thus, under § 169 of the Constitution and KRS 92.020 implementing same, no city other than that of the first class is required under present law to change its fiscal year from a calendar year to that of July 1 through June 30.
In response to your second related question as to whether cities not required to change their fiscal year will have until July, 1982 to conform to the requirements of the Act, our response would also be in the negative, in view of the express terms of § 3 (1), which reads as follows:
"(1) Each city shall operate under an annual budget ordinance adopted and administered in accordance with the provisions of this section. Notwithstanding any other provision of the law, after the effective date of this Act, no city shall expend any monies from any governmental or proprietary fund, except in accordance with a budget ordinance adopted pursuant to this section." (Emphasis added)
The above statute clearly implies that cities must immediately comply with the terms of the Act. The only exception is that found under subsection (4) of § 3 quoted above which is not applicable at present since there is no legislation requiring cities to change their fiscal year.
Your second question reads as follows:
"May a municipal order be used in lieu of an ordinance to establish the procedure for the preparation of the budget proposal? "
In connection with the above question, you cite the following statutory provisions:
"Senate Bill 18, Section 3, subsection 5 states:
'Preparation of the budget proposal shall be the responsibility of the executive authority of the city.'
"Subsection 6 states:
'The budget proposal shall be prepared in such form and detail as is prescribed by ordinance. '
"Senate Bill 26, new Chapter KRS 83A, Section 6, subsection 13 states:
'In lieu of an ordinance, a municipal order may be used for matters relating to the internal operation and function of the municipality. '
Our response to the above question would be in the negative. Subsection (6) of Senate Bill 18 specifically requires that the budget proposal shall be prepared in such form and detail as is prescribed by ordinance. The provision in Senate Bill 26 to the effect that in lieu of an ordinance, a municipal order may be used for matters relating to the internal operation and function of the municipality is couched in general terms rather than a specific matter such as the form and details of the budget mentioned in subsection (6) of Senate Bill 18. Thus, you have a specific requirement as opposed to a general option. One of the basic rules of statutory construction is that a specific statute controls a more general one. Referring to the late case of Heady v. Commonwealth, Ky., 597 S.W.2d 613 (1980), we quote the following:
". . . Simply put, the specific statute controls a more general statute. This rule of statutory construction is firmly established in the law of the Commonwealth. City of Bowling Green v. Board of Education, Ky., 443 S.W.2d 243 (1969); Morton v. Auburndale Realty Co., Ky., 340 S.W.2d 445 (1960). It is the general rule as well. See Brown-Forman Distillers Corp. v. Mathews, W.D.Ky., 435 F.Supp. 5, 13 (1976); 73 Am.Jur.2d Statutes Sec. 257."
Your third question and related statute is as follows:
"Does this provision specify a separate model system of accounting and budgeting for each class of city or does it meet the requirements of law to prepare one model system which is sufficiently flexible to be adopted to each class of city and still meet the requirements of generally accepted governmental accounting practices?"
"Senate Bill 18, Section 5 states:
'The Department for Local Government shall make available to all cities assistance in meeting the requirements of the act, including the preparation and dissemination of a model of systems for accounting and budgeting, and other technical materials.'
In response to the above question, the quoted section of Senate Bill 18 requires the Department for Local Government to assist all cities [when requested] in meeting the requirements of the Act, however, it does not require a separate model system of accounting and budgeting for each class of city. Thus, if the Department can prepare one model system of accounting and budgeting sufficiently flexible to allow cities of all classes to meet the requirements of the Act, such would appear to be sufficient.