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Request By:

Honorable Edsel T. Jones
City Attorney
City of Winchester
City Hall
Winchester, Kentucky 40391

Opinion

Opinion By: Robert F. Stephens, Attorney General; By: Walter C. Herdman, Assistant Deputy Attorney General

This is in answer to your letter of December 21 in which you refer to the fact that the city of Winchester is a city of the third class operating under the city manager form of government. You also enclose a copy of the Articles of Incorporation of a private organization, together with a copy of the letter from IRS pertaining to the tax exempt status of said organization. The organization has requested that the city contribute from public funds approximately $5,000 to be used to pay a part of the cost of repairing a furnace boiler located in a building owned by the corporation. Under the circumstances, you raise the following question:

"The question is whether or not such a contribution by the City of Winchester from its General Fund is permissible under the laws of Kentucky."

The Articles of Incorporation of the Citizens Organization, Inc., particularly Article III, state the corporation's basic purpose, which we quote as follows:

"This corporation is not organized for business purposes or pecuniary profit but is a mutual endeavor corporation without capital stock and its exclusive purpose is to promote, institute, improve, recommend and develop recreational and civic activities for the residents of Clark County, Kentucky, and to acquire and operate a community center where civic, church, fraternal orders, YMCA, YWCA, scout activities and other groups may meet, conduct programs and activities and to provide, maintain, conduct and manage all and every kind of facility, work or business incident to operation of a community center or other similar facility which may be advantageous to the general objective of this corporation and the community of Winchester, Kentucky, in general." (Emphasis added). in general." (Emphasis

Our response to your question would be in the negative and we are enclosing copies of OAG's 76-397, 75-366 and 62-634 setting forth in detail the legal principles governing the appropriations of public monies to private organizations. We particularly refer you to the initial opinion from which we quote the following:

"We next call your attention to McQuillin, Mun. Corps., § 39.19, which reads in part as follows:

"All appropriations or expenditures of public money by municipalities and indebtedness created by them, must be for a public and corporate purpose, as distinguished from a private purpose, at least, unless the powers of the particular municipality in regard thereto have been enlarged by the legislature, which is itself limited in its power to authorize expenditures or indebtedness for other than public purposes. . . .' (Emphasis added.)

'A fortiori, a municipality has no power, unless expressly conferred by constitutional provision, charter or statute, to donate municipal moneys for private uses to any individual or company, not under the control of the city and having no connection with it, although a donation may be based upon a consideration. . . .' (Emphasis added.)

"Referring next to $39.26 we find the rule stated that unless the power to do so has been expressly designated by the legislature within constitutional authorization, the municipality has no power to donate money, issue bonds or otherwise aid a private individual or corporation. With this rule in mind we are faced with an apparent constitutional objection to such an expenditure in § 179 of the Constitution. This provision prohibits the General Assembly from authorizing a city to appropriate money to any corporation, association or individual, with certain exceptions, not applicable in this instance. See Board of Eduation v. City of Corbin, 301 Ky. 686, 192 S.W.2d 95 (1946)."

Aside from the above cited principles of law relating to the subject, we next refer to KRS 204.200, which reads as follows:

"The legislative body of any city of the third class or fiscal court of the county containing such city is authorized to pay public funds to any private agency or organization, or combination of such agencies or organizations, located in the city or county, performing charitable and welfare work among the citizens generally of the city or county." (Emphais added.)

You will note that the above statute authorizes a city of the third class to appropriate public funds to a private agency or organization that performs charitable and welfare work among the citizens of the city. The Articles of Incorporation, previously quoted, clearly indicate that the corporation's basic purpose is to develop recreational and civic activities for the community which, in our opinion, would not fall in the category of charitable and welfare work. The term "charities" is defined in McQuillin, Mun. Corps., Vol. 17, § 47.01, as follows:

"In their broadest sense charities embrace all public and private institutions organized to relieve the poor, the sick, the neglected, the dependent or the destitute, without compensation. . . ."

The term "welfare work" is defined in Webster's International Dictionary to mean "an organized effort by a community organization or individual for the social betterment and general improvement in the welfare of a group in society [as underprivileged or disabled persons]."

Since the purpose of the Citizens Community Organization, Inc., does not embrace the performance of charitable and welfare work among citizens of the city as required by KRS 204. 200, this statute would not be applicable and therefore would not constitute specific legislative authority for the city to appropriate the requested funds to this organization.

It also follows that since there exists no legislative authority for the city to make the appropriation, such cannot be made under the principles of law cited above and referred to in the attached opinions. As a consequence, your advice to the city commission was in our opinion correct.

Disclaimer:
The Sunshine Law Library is not exhaustive and may contain errors from source documents or the import process. Nothing on this website should be taken as legal advice. It is always best to consult with primary sources and appropriate counsel before taking any action.
Type:
Opinion
Lexis Citation:
1978 Ky. AG LEXIS 725
Forward Citations:
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