Request By:
Nicholas A. Marsh
Carrollton City Attorney
Opinion
Opinion By: JACK CONWAY, ATTORNEY GENERAL; Matt James, Assistant Attorney General
Opinion of the Attorney General
Nicholas A. Marsh, Carrollton City Attorney, has requested an opinion of this office whether a city may expend funds to survey private properties in order to amend a Federal Emergency Management Agency ("FEMA") flood plain map. We advise that it may not, as an expenditure of public funds to have private properties reclassified on federal flood plain maps would be a private benefit that is inconsistent with the public purpose requirement on municipal spending.
Mr. Marsh informs us that in Carrollton FEMA has listed over twenty private residential properties in a flood plain area. If a property is within a flood plain, federal law requires purchasing flood insurance as a condition of any federally-supported financing on the property, which effectively makes purchasing flood insurance a condition of a mortgage or any common financing on the property. The owner of a property designated as in a flood plain may send a Letter of Map Amendment ("LOMA") to FEMA requesting reclassification, but the LOMA must be supported by a survey from a professional engineer that the lowest part of the building is above the base flood elevation for the flood plain area. At issue is whether the City of Carrollton may expend public funds to survey these private properties so that the owners may submit LOMAs and get their properties reclassified as not in a flood plain area.
A city or any other unit of state government may only expend funds for public purposes. Ky. Const. § 3 provides that "no grant of exclusive, separate public emoluments or privileges shall be made to any man or set of men, except in consideration of public services." "In Kentucky, the General Assembly and the courts have developed a broad definition of activities that may qualify as a public purpose, " Dannheiser v. City of Henderson, 4 S.W.3d 542, 545 (Ky. 1999), which encompasses activities "for the promotion of economic welfare, relief of unemployment and stimulation of industry." Id. However, there is a limitation: the power to spend for a public purpose extends only as far as the power to tax. "If money is appropriated out of the treasury it must be measured by the same test as that by which it is raised by taxation and put into the treasury. If taxes could not be imposed for a purpose, money already in the treasury could not be appropriated to that purpose." Industrial Development Authority v. Eastern Kentucky Regional Planning Commission, 332 S.W.2d 274, 276 (Ky. 1960). 1 Thus the issue of whether a city's expenditure of funds is consistent with the public purpose requirement may be restated as whether a city may levy a tax for the same purpose.
We do not think that a city may levy a tax to pay for the surveying of private residential properties for flood classification purposes, and accordingly, we do not think that a city may expend public funds for those purposes. Ky. Const. § 179 provides that "taxes shall be levied and collected for public purposes only." The result of the expenditure would be that some of the private residential owners of Carrollton would not have to pay for flood insurance, and this is a private benefit rather than a public service or purpose. It would be inappropriate to levy a tax on all Carrollton residents so that a few of them do not have to pay for flood insurance, and thus it would be inappropriate to spend public funds on the same. Mr. Marsh further inquires whether a city may utilize its own engineer to prepare the LOMA documents for submission to FEMA if the surveys are paid for by the property owners. We similarly advise that the city may not use its own engineer to prepare documents for a small group of private residential landowners.
In sum, a city may not expend public funds for surveys of private residential properties in order to have those properties reclassified by FEMA as outside of a flood plain area, nor may it use a city engineer to prepare such documents.
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