Request By:
Mr. Larry J. Crigler
Boone County Attorney
P.O. Box 114
Burlington, Kentucky 41005
Opinion
Opinion By: David L. Armstrong, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
The issuance of revenue bonds by the county for housing facilities is the subject of your request for the opinion of this office. The letter reads:
"Recently the Boone County Fiscal Court authorized by Ordinance the issuance of revenue bonds for the 'acquisition, rehabilitation, and installation of certain housing facilities in the county.' The Ordinance was issued under authority of KRS 67.083 and more specifically Sections (1), (3)(j). The Boone County Fiscal Court has asked me to write for an opinion of the Attorney General regarding the latitude of the County in issuing revenue bonds under KRS 67.083.
"The more specific question they are asking is: Whether a county can issue revenue bonds for renovation, rehabilitation, and possible new installation for an existing complex within the county. Said revenue bonds would necessarily cause a refinancing of the apartment complex.
"The more general question is as follows: What latitude does the county have in issuing bonds or what restrictions or limitations does the county specifically have in the issuance of revenue bonds?
KRS 67.083(1) and (3)(j) read:
"(1) It is the purpose of this section to provide counties as units of general purpose local government with the necessary latitude and flexibility to provide and finance various governmental services within those functional areas specified in subsection (3) of this section, while the general assembly retains full authority to prescribe and limit by statute local governmental activities when it deems such action necessary.
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"(3) The fiscal court shall have the power to carry out governmental functions necessary for the operation of the county. Except as otherwise provided by statute or the Kentucky Constitution, the fiscal court of any county may enact ordinances, issue regulations, levy taxes, issue bonds, appropriate funds and employ personnel in performance of the following public functions:
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"(j) Facilitating the construction and purchase of new and existing housing; causing the repair or demolition of structures which present a hazard to public health, safety or morals or are otherwise inimical to the welfare of residents of the county; causing the redevelopment of housing and related commercial, industrial and service facilities in urban or rural areas; providing education and counseling services and technical assistance to present and future residents of publicly assisted housing; "
The legislative policy is expressed in subsection (1) of the statute as the purpose of providing counties "with the necessary latitude and flexibility to provide and finance various governmental services within those functional areas specified in subsection (3)" of KRS 67.083. (Emphasis added). That policy was made expressly subject to any other statutory treatment of that subject. Prior to the 1978 and later amendments of KRS 67.083, the
Supreme Court of Kentucky, in Fiscal Court v. City of Louisville, Ky., 559 S.W.2d 478 (1977), laid down the stern rule that the General Assembly, in establishing powers for fiscal courts, must do so with the precision of a rifle shot and not with the casualness of a shotgun blast. Bearing in mind the judicial requirement of specificity in granting such powers, subsection (3) provides that, "except as otherwise provided by statute or the Kentucky Constitution," the fiscal court of any county may issue bonds, appropriate funds and employ personnel in the performance of the following public functions. (Emphasis added). Among those described public functions is item (j), relating to public housing.
Since county revenue bonds issued in conformity with applicable statutory sections involve no county governmental debt obligation, no lending of credit, and no use of tax revenues, § 179 of the Kentucky Constitution (prohibiting a county's lending of credit) is not violated.
Faulconer v. Danville, 313 Ky. 468, 232 S.W.2d 80 (1950). The Supreme Court of the United States, as early as 1920, in
Green v. Frazier, 253 U.S. 233, 64 L. Ed. 878, 40 S. Ct. 499, upheld residential housing as a public purpose. It is appropriate to keep in mind that in
Spahn v. Stewart, 268 Ky. 97, 103 S.W.2d 651 (1937), the court wrote at page 655 that "a public purpose . . . has for its objective the promotion of the public health, safety, morals, general welfare, security, prosperity, and contentment of all the inhabitants or residents within a given political division . . . the sovereign powers of which are exercised to promote such public purpose. " The bonds should recite the specific statutory authority and public purpose or purposes subserved.
The answer to your specific question is that in reading all of the programs described in subsection (j) (the programs are described between the semicolons), and we see no reason why the entire subsection cannot be read together, we conclude that the fiscal court can issue county revenue bonds for the purpose of constructing and acquiring new and existing housing, and rehabilitating, remodeling, renovating or redeveloping existing housing. The subsection must be examined as a whole and harmonized to the extent practicable.
Kentucky Tax Commission v. Sandman, 300 Ky. 423, 189 S.W.2d 407 (1945).
As concerns revenue bond financing, that is left to the sound discretion of fiscal courts, who must rely upon fiscal agents and the expertise of bond counsel in such details and in the formulation of the appropriate bond documents, within the framework of statutory sections employed in the issue.
In connection with statutory law, other than KRS 67.083(1), (3)(j), that may be used in the issuance of county housing revenue bonds, see the following: KRS 58.010(1) to 58.170; KRS 80.310, 80.320, 80.500 and 80.550; KRS 103.200(3), (12), (13), and 103.230.
In response to your general question, the statutory limitations will be found in the statutory sections used by the county and bond counsel in issuing revenue bonds.