Request By:
G. Stephen Manning, Esq.
P.O. Box 566
227 Sutton Street
Maysville, Kentucky 41056
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Thomas R. Emerson, Assistant Attorney General
This is in reply to your letter raising a question concerning the Housing Authority of the City of Augusta which was established pursuant to the provisions of KRS Chapter 80 for the purpose of constructing and operating a housing project for low income and elderly persons in the city. Your specific question concerns the legality of the Housing Authority borrowing funds from the Farmers Home Administration for construction and initial operating expenses. You refer to KRS 80.230 and 80.257 to support such action by the Housing Authority and you state that the Housing Authority has an application pending for a loan from the Farmers Home Administration, Section 515, Rural Rental Housing Program.
KRS 80.230(1) and (3) deal with the bonds issued by cities pursuant to resolutions of municipal housing authorities to provide funds for carrying out the objectives of the housing authorities. Note, however, that KRS 80.230(1) states in part that the bonds or other obligations of a city housing authority shall not constitute an obligation of the city. It is also provided that a city housing authority may incur any indebtedness and issue any obligations and give any security which it deems necessary or advisable in connection with any project undertaken by it.
Furthermore, KRS 80.230(2) provides in part that a city housing authority may in connection with the borrowing of funds or otherwise enter into agreements with the federal government providing for supervision and control of the housing authority or any project and containing such other covenants, terms and conditions as the housing authority deems advisable. In connection with any loan by a government, the statute also states that a city housing authority is authorized to agree to limitations upon the exercise of any of its powers.
While not one of the issues before the Court, it was stated in
Douthitt v. City of Covington, 284 Ky. 382, 144 S.W.2d 1025, 1027 (1940), that the Kentucky statute enacted in 1934 (the predecessor to KRS 80.230) contemplated the borrowing of money by the respective local housing commissions from agencies of the federal government. We also direct your attention to 40 Am.Jur.2d Housing Laws, Etc. § 6, dealing with federal legislation and assistance. That particular section sets forth some of the federal statutes under which assistance is rendered, in the form of loans, grants, etc., to public housing agencies to help in the development of projects such as low rent housing.
We are enclosing for your information and consideration a copy of OAG 79-47 concluding that a municipal housing commission cannot establish housing units beyond the city's boundaries as such a commission must operate within the territorial boundaries of the governmental entity which created it.
In conclusion, it is our opinion that a municipal housing authority, organized pursuant to the provisions of KRS 80.020 to 80.257, may, within its discretion, borrow funds from the federal government to carry out statutorily authorized objectives within its territorial boundaries.