Request By:
J. Larry Cashen
Wyatt, Grafton & Sloss
Twenty-Eighth Floor
Citizens Plaza
Louisville, Kentucky 40202
Opinion
Opinion By: Robert F. Stephens, Attorney General; By William S. Riley, Assistant Attorney General
In your recent letter to the Attorney General it is stated that the City of St. Regis Park, a 4th class city located in Jefferson County, Kentucky, has obtained revenues through the imposition of ad valorem property tax. It is levied annually to provide revenue for city purposes and governmental function and operation of St. Regis Park. The ordinance levying the tax has not allocated the funds raised as a result of the tax to any particular governmental function or purpose, all funds being available generally for any authorized purpose.
The city has, however, segregated funds obtained from various accounts such as the General Fund Account, Road Maintenance Account and a Capital Account.
The city would now like to abolish the Road Maintenance Account and the Capital Account and transfer those funds to the General Fund Account.
The ordinances cited, KRS 92.330 and KRS 92.340. KRS 92.330 provides, generally, that taxes and license fees levied by cities of the second through sixth class shall be levied or imposed by an ordinance. The purpose for which each tax is levied or license fee imposed shall be specified in the ordinance and that the revenue can be expended for no other purpose. Failure to specify the purpose of the tax or license fee shall render the ordinance invalid.
Under KRS 92.340, if any city tax revenue is expended for a purpose other than that for which the tax was levied or the license fee imposed, each officer, agent or employee who did not prevent the expenditure and any members of the city legislative body who voted for the expenditure shall be jointly and severally liable to the city for the amount expended.
Although the city has not imposed a special tax for road maintenance and capital improvement purposes, there are two city ordinances which apply to the current issues.
The city has an ordinance which provides in part that the Board of Trustees shall allocate and appropriate from the general funds of the city in each fiscal year a sum equal to and not less than $8.00 for each residence in the city for the purpose of providing a fund for capital improvement, reconstruction and resurfacing of roads and streets in the city. The fund is to be known as the "Capital Road Fund Account" and is not to be commingled with other general funds of the city.
Section 4 of the ordinance states that the funds invested under the terms of the ordinance are to be held and used for the payment of the cost of capital improvement, reconstruction and resurfacing and not for routine maintenance of roads, streets and public ways within the city and be withdrawn from the fund only upon passage of a duly enacted ordinance. The remainder of the money shall never revert to the general fund of the city.
In 1963 the city adopted an ordinance which provided for the establishment of a General Capital Fund Account to provide funds for city-wide improvements and emergencies. The Board of Trustees could allocate and appropriate from the general fund a sum equal to the expended funds from the previous fiscal year. This fund is to be designated as "General Capital Fund Account." A fund was to be invested in obligations and securities as provided by the Kentucky Revised Statutes. The remainder of money in the fund may revert to the Capital Road Fund Account, but never to the general fund. Neither of the above two ordinances is a taxing ordinance. The question is what effect will be given to the ordinances since each city council has the right to pass ordinances which will benefit the city during their tenure.
An additional question is whether the present city council of St. Regis Park may adopt an ordinance abolishing the two ordinances in question which provide for a Road Maintenance Fund and a Capital Fund and transfer such funds to a General Fund Account for general fund purposes.
A municipal council which has been granted the power to enact ordinances has an incident thereto and without any express reference thereto in the statutes, the power to amend, change, or repeal such ordinances. See 56 Am.Jur.2d, Municipal Corporations, Etc., Section 410.
In Keathly v. Town of Martin, Ky., 253 S.W.2d 3 (1953) it is stated that the right of a municipality to abolish an office and repeal an ordinance is generally coextensive with the authority to create the office or enact the ordinance in the first instance, however, an office cannot be abolished if the ordinance creating it is contractual in nature.
It would appear from an examination of the two ordinances, the ordinance of 1957 and the ordinance of 1963, created funds which, unless they have been used to construct major road improvements to be paid for over a period of years or to build public buildings which will be paid for over a period of years, can be abolished and the funds transferred to a General Fund Account.