Request By:
The Honorable Vic Hellard, Jr.
Director
Legislative Research Commission
State Capitol
Frankfort, Kentucky 40601
Opinion
Opinion By: Frederic J. Cowan, Attorney General; Anne E. Keating, Assistant Attorney General
In your recent letter you asked whether provisions of the Kentucky Constitution prohibit the transfer of surplus school buildings to community services organizations for less than fair market value.
You stated that the Department of Education has taken the position that surplus property may only be disposed of at public auction, by sealed bid, or by sale after appraisal and contends that transfer of surplus property for less than a fair market value would violate Sections 180 and 186 of the Kentucky Constitution.
As you pointed out, Section 180 states in pertinent part:
Every act enacted by the General Assembly, and every ordinance and resolution passed by any county, city, town or municipal board or local legislative body, levying a tax, shall specify distinctly the purpose for which said tax is levied, and no tax levied and collected for one purpose shall ever be devoted to another purpose.
Section 184 states in part:
The bond of the Commonwealth issued in favor of the Board of Education . . . and its proceeds, shall be held inviolate for the purpose of sustaining the system of common schools. The interest and dividends of said fund, together with any sum which may be produced by taxation or otherwise for purposes of common school education, shall be appropriated to the common schools, and to no other purpose.
Section 186 states:
All funds accruing to the school fund shall be used for the maintenance of the public schools of the Commonwealth, and for no other purpose, and the General Assembly shall by general law prescribe the manner of the distribution of the public school fund among the school districts and its use for public school purposes.
Three statutes shed light on who bears responsibility for disposal of surplus school property and what limits apply. Under KRS 162.010, "The title to all property owned by a school district is vested in the Commonwealth for the benefit of the district board of education." The board of education has responsibility for control and management of the school district. In particular, "Each board shall have control and management of all school funds and all public school property of its district and may use its funds and property to promote public education ." KRS 160.290. [Emphasis added.] Finally, under KRS 160.293 the State Board for Elementary and Secondary Education may authorize a local board of education to make an agreement with a public agency in order to develop and maintain recreational facilities on school property for both school and community use so long as no interference with school activities occurs . See, also, KRS 97.010.
This office has previously opined that a county board of education which owned a lot not being used for school purposes could lease that lot to the city and county for an outdoor recreational facility so long as the consideration paid by the lessee would be the fair rental value for the property, based on Sections 180 and 184 of the Kentucky Constitution. While the board of education could join with a city or county in providing recreational centers under KRS 97.010, we stated:
This statute, however, does not authorize a school board to donate its property for a park or playground, and if it did it would be unconstitutional . . . The leasing of school property for this purpose was upheld in
Sawyer v. Jefferson County Fiscal Court, 392 S.W.2d 83 (1965).OAG 72-397. See also OAG 72-376; 76-610; and 77-342.
Nor may a county board of education make a donation of public school funds to a public entity which serves the general public, as well as pupils of the common schools, because it would constitute an expenditure of school funds for other than educational purposes under Sections 180 and 184 of the Kentucky Constitution. OAG 61-879 (donation to a public library); OAG 76-606.
In conclusion, under KRS 160.290, local boards of education must manage and control school property to promote public education. While the board of education may enter into an agreement with a public agency to develop recreational facilities on school property, use of the property must not interfere with school activities. An expenditure of common school funds or a donation of school property for a public purpose other than for the benefit of public education is not permissible under §§ 180, 184 and 186 of the Kentucky Constitution. Therefore, under Sections 180, 184, and 186 of the Kentucky Constitution, any transfer of surplus school buildings to community service organizations must be based on the fair market value of the property.