Request By:
Ms. Margaret C. Brown
Executive Director
Middle Kentucky River Area Development Council, Inc.
Community Action Agency
Breathitt County Courthouse
Jackson, Kentucky 41339
Opinion
Opinion By: David L. Armstrong, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
You raise, on behalf of a Community Action Agency and four counties, generally the question concerning restrictions on counties' contributions to various organizations.
The Supreme Court of Kentucky, in Fiscal Court, Etc. v. City of Louisville, Ky., 559 S.W.2d 478 (1977) 482, laid down a rather strict doctrine that the powers of a fiscal court must be spelled out in legislation with the precision of a rifle shot, and not with the casualness of a shotgun blast. However, that expression of a need for precision may have created the illusion that it was a departure from the holdings in a long uninterrupted line of cases. In Hogge v. Rowan County Fiscal Court, 313 Ky. 387, 231 S.W.2d 8 (1950), a typical case in that long line of cases referred to, the court observed that a fiscal court possesses no authority which the General Assembly has not expressly or impliedly conferred upon it; and its implied power is limited to the authority reasonably necessary to execute or to discharge its express duties. While Justice Jones, in Fiscal Court, Etc. v. City of Louisville, supra, in his opinion for the entire court, stressed the concept of "express delegation" of power to a fiscal court, the opinion made no attempt to delete from the operative appellate law the ancillary concept of implied powers of a fiscal court reasonably necessary to execute or to discharge its express powers. In fact, the opinion of former Chief Justice Palmore, for the court, in Stansbury v. Maupin, Ky., 599 S.W.2d 170 (1980), hastened to make up for the non-treatment of implied powers of a local government in ruling that:
"The powers of a city have generally been confined to those expressly delegated to it by the General Assembly or implied as being indispensable to enable the municipality to carry out its declared objects, purposes and expressed powers."
However, even under the express and implied powers doctrine, there must first exist a rather clear and specific delegation of power. City of Bowling Green v. T & E Elec. Contr., Ky., 602 S.W.2d 434 (1980) 436. The Court of Appeals, in City of Radcliff v. Hardin County, Ky.App., 607 S.W.2d 132 (1980) 134, referred to Fiscal Court v. City of Louisville, above. It noted that the Supreme Court had declared that KRS 67.083 at that time (1977) was unconstitutional because it granted to fiscal courts carte blanche authority to administer county governments as though the legislature had expressly granted them all authority that could be granted to them. The Court of Appeals in City of Radcliff added that "The present KRS 67.083 does not contain such a broad grant of authority to county governments." (Emphasis added). The amendment of KRS 67.083 in 1978 (Ch. 118, § 3) was an act of specificity in enumerating powers of a fiscal court.
Four county officials have membership on your Board of Directors of your Community Action Agency (Middle Kentucky River Area Development Council, Inc.) (they represent the counties of Lee, Wolfe, Owsley and Breathitt) i.e., three county judge executives and a representative of the fourth county judge executive. These four participating counties and you request an opinion as to whether the fiscal courts of those four counties can contribute to the programs of your community action agency. Your corporation was created in 1965 as a nonprofit corporation whose general objectives are the stimulation of social, individual and economic growth in the four county areas of Lee, Wolfe, Owsley, and Breathitt. Your Chapter 273 corporation was established for the purpose of establishing community facilities, creating or expanding economic opportunities, developing and/or improving the human and natural resources of your county areas.
You have indicated by telephone that your corporation and the above four counties, through their fiscal courts, have for several years treated your corporation as a designated community action agency. See KRS 273.410(2) and KRS 273.435 (1)(a) and (2)(b), and KRS 273.437.
CONCLUSIONS
It is our opinion that:
(1) Pursuant to KRS 273.441 and KRS 273.410(2), any of the counties which have in legal effect designated your corporation as a community action agency may, subject to available funds and proper budgeting procedure under KRS Chapter 68, contribute, through your corporation, county funds for any of the purposes described specifically in KRS 273.441 and KRS 273.410(2). This is with the assumption that such county grants are made by way of an agreement between the county and the corporation that such county money will be spent for a designated purpose or purposes, as expressly provided in KRS 273.411 and 273.410(2), the corporation subsequently reporting to the county government the precise nature and amount of the final expenditure. Basically, the powers of a fiscal court expressed in KRS 67.083(3) relate to public expenditures and programs under the direct control of fiscal court.
(2) While § 179 of the Kentucky Constitution prohibits any county from appropriating money for any corporation, except for roads or bridges, we see no violation of § 179 as relates to county money expended under the above community action agency legislation. The point is that a county may select a nonprofit corporation as an instrumentality in carrying out a public purpose. In O'Bryan v. City of Louisville, Ky., 382 S.W.2d 386 (1964), the old Court of Appeals held that the city of Louisville could operate a zoo through the instrumentality of a nonprofit corporation. See also Ezelle v. City of Paducah, Ky., 441 S.W.2d 162 (1969) 164. As the court wrote in Louisville Board of Ins. Agents v. Jefferson County Board of Education, Ky., 309 S.W.2d 40 (1957), Section 179 of the Constitution was intended to prevent the investment of public funds in private enterprises and to thereby forestall local and state tax revenues from being diverted from normal governmental channels.