NO. 93-145

IN THE SUPREME COURT OF THE STATE OF MONTANA

1994

CARBON COUNTY,

Plaintiff and Respondent,

DAIN BOSWORTH, INCORPORATED, a Delaware

Corporation, et al., and D.A. DAVIDSON & CO.,

KAREN T. DOOLEN and FRANK and MARGO KELLEY,

as representatives of the Bondholder Class,

Defendants and Appellants,

V.

CARBON COUNTY,

Plaintiff and Respondent,

and

DON TAYLOR, MONA L. NUTTING

and JOHN PRINKIZI,

APPEAL FROM: District Court of the First Judicial District,

In and for the County of Lewis and Clark,

The Honorable Thomas C. Honzel, Judge presiding.

COUNSEL OF RECORD:

For Appellants:

Keith Strong (argued) and Bruce A. MacKenzie

(argued), Dorsey & Whitney, Great Falls,

Montana; and James H. Goetz (argued), Attorney

at Law, Bozeman, Montana (for the Underwriters)

Robert M. Murdo (argued), Jackson, Murdo,

Grant & McFarland, Helena, Montana (for

the Bondholder Class)
FOG Respondent Carbon County:

Ward Swanser (argued) and T. Thomas Singer

(argued), Moulton, Bellingham, Long0

& Mather, Billings, Montana; and Anthony

Kendall, Carbon County Attorney,

Red Lodge, Montana

Filed:

Submitted: April 18, 1994

Decided: May 16, 1994
Justice William E. Hunt, Sr., delivered the opinion of the Court.

Appellants appeal from an order of the First Judicial District

Court, Lewis and Clark County, denying their motion for summary

judgment and granting summary judgment to plaintiff Carbon County,

finding that the County has no further obligation to make loans

from the revolving fund to the rural special improvement district

(RSID) fund when the RSID assessments are insufficient to pay the

RSID bonds. Respondents are the present Carbon County

Commissioners. Appellants are three underwriters, Dain Bosworth,

Inc., D.A. Davidson 8 Company, and Piper Jaffray 8 Hopwood, Inc.,

and numerous bondholders.

We reverse the District Court's order for summary judgment and

remand for further proceedings in accordance with this opinion.

While many issues are raised by the parties, we need not

discuss them because the dispositive issue on appeal is whether a

county is required to continue to levy general taxes and loan money

to an RSID revolving fund created pursuant to § 7-12-2181, MCA,

when the RSID is deficient, and the revolving fund may never be

sufficient to retire the bonds, and the county's loans may never be

repaid.

In 1984, when a developer called Joint Venture petitioned

Carbon County to approve a subdivision plat to develop a country

club subdivision and golf course known as Red Lodge Country Club

Estates, the then-seated County Commissioners required that Joint

Venture construct street, water, and sanitary improvements. The

County Commissioners agreed to help finance these improvements.

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After notice requirements were met under § 7-12-2105, MCA, the

County Commissioners created two RSIDs, 8 and 9, under § 7-12-2103,

MCA. The County Commissioners authorized improvements totalling

$2,244,000 for RSID 8, and $1,025,000 for RSID 9.

The County Commissioners agreed to issue bonds to the public

to finance the improvements following the requirements found in

55 7-12-2169 to -2175, MCA, and agreed to levy and collect

assessments in the principal amount of the bonds against property

within the RSIDs under §§ 7-12-2151 to -2168, MCA.

The County Commissioners also created a revolving fund under

§ 7-12-2181, MCA, and agreed to authorize loans or advances from

the revolving fund to the RSID fund when assessments are deficient

to pay the bond payments. To replenish the revolving fund,

5 7-12-2182(1)(a), MCA, provides that county commissioners may loan

monies from the general fund to the revolving fund as may be

necessary, and § 7-12-2182(1)(b), MCA, allows the County to levy a

tax on all taxable property within Carbon County "as shall be

necessary to meet the financial requirements of such fund." The

tax levy iS Subject to the limitations in fr 7-12-2182(1)(b), MCA,

requiring that the tax may not be an amount that would increase the

balance in the revolving fund above five percent of the principal

amount of the then-outstanding RSID bonds. When the revolving fund

makes a loan to the RSID fund, a lien up to the loan amount

attaches to the following: all RSID property which is delinquent

in assessment payments: all unpaid assessments whether delinquent

or not; and all money deposited into the RSID fund. Section

4
7-12-2184(l), MCA. The liens may be enforced by the sale of the

property at a tax sale. Section 7-12-2184(2), MCA.

The County Commissioners published notice of the bond sale

stating it would create, use, and fund a revolving fund if

assessments were insufficient until all the bonds and interest

thereon are fully paid. Because the bonds did not sell initially,

the County Commissioners agreed to sell the bonds to Dain Bosworth,

Inc., D.A. Davidson, Piper Jaffray & Hopwood, Inc. (underwriters),

who in turn sold the bonds to the public. The bond purchase

agreement between the County Commissioners and the underwriters

restates the promise to use and maintain the revolving fund. The

RSIDs were recreated, and again, the County Commissioner's

resolution made the following promise to create, use, and fund a

revolving fund:

[T]his Board does hereby undertake and agree . . . to

secure the Bonds with the Revolving Fund and to issue

orders annually authorizing loans . . . in the amounts

sufficient to make good any deficiency in the District

Fund, to the extent that funds are available, and to

provide funds for the Revolving Fund by annually making

a tax levy or loan from the General Fund, subject to the

maximum limitations imposed by the Montana Code

Annotated, Section 7-12-2182. Specifically, this Board

shall annually or more often if necessary issue an order

authorizing a loan or advance from the Revolving Fund to

the District Fund in an amount sufficient to make good

any deficiency then existing in the Interest Account in

the District Fund, and shall issue an order authorizing

a loan or advance from the Revolving Fund to the District

Fund in an amount sufficient to make good any deficiency

then existing in the Bond Account of the District Fund to

the extent that moneys are available in the Revolving

Fund.

Joint Venture agreed with the underwriters to provide

additional security through covenants to: (1) guarantee the bond

5
payments in 1985 and 1986 with two letters of credit: (2) pay the

assessments on all developer owned land from 1987 to 1992; (3) pay

a substantial portion of the unpaid assessments after 1992; and

(4) remain in existence until it sold its assets to a buyer worth

$16 million or more. However, in order to keep the tax exempt

status of the bonds, the County waived section (2) of the security

agreement whereby Joint Venture would pay all assessments on all

developer owned land through 1992.

The bonds were prepared according to the form set out in

5 7-12-2170, MCA (repealed 1989). The underwriters advertised to

the public that the bonds were for sale and were secured by the

revolving fund. Numerous .people bought the bonds totalling over

$3 million. The issued bonds were arranged for interest to mature

on January 1, 2000, bearing interest at annual rates from 7.5

percent to 12.625 percent payable on each January 1, commencing

January 1, 1985. Additional interest would be paid for a limited

time ending January 1, 1986.

The property improvements were made using the bond proceeds.

The RSID property did not sell as expected, and of the property

that did sell, the assessments became delinquent resulting in

inadequate revenue to pay the bond payments. Under ii 7-12-2184,

MCA, the County used its authority to sell two lots of the 150

delinquent lots at a tax sale. Bond payments on January 1, 1985,

1986, and 1987, were paid from the following: bond proceeds

remaining after improvements were completed; the few assessments

paid: and one of two letters of credit from Joint Venture. Tax

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levies to replenish the revolving fund became necessary for the

payments on January 1, 1988, 1989, and 1990. Since January 1,

1990, the newly-seated County Commissioners refused to loan funds

from the revolving fund, asserting that the loans would be

unsecured because the current value of the RSID property is less

than the delinquent and future assessments against them.

On December 31, 1990, the County Commissioners filed action

for a declaratory judgment defining the County's obligation under

the bonds, the revolving fund laws, and the Montana Constitution.

In February 1992, the underwriters and bondholders, and the

County filed cross-motions for summary judgment. The underwriters

and bondholders also filed two motions in limine challenging the

relevance of evidence concerning current property values of the

RSID property, and challenging the relevance of Joint Venture's

agreement to provide further security. On February 10, 1992,

during the pendency of this action in state court, Joint Venture

filed its petition for Chapter 11 bankruptcy. The Bankruptcy Court

held a hearing on February 16, 1994, on debtor Red Lodge County

Club Estates Joint Venture's fourth amended plan of reorganization,

together with objections filed by Carbon County, and Northwest

Capital Management and Trust Company. Each party was represented

by counsel. The Bankruptcy Court issued its order on January 7,

1994, conditionally approving debtor's third amended disclosure

statement, and set February 10, 1994, as the last day for a

party-in-interest to file objections to the disclosure statement.

No objections were filed, and the Bankruptcy Court issued its order

7
confirming a Chapter 11 amended plan of reorganization for debtor

on February 28, 1994.

In its order, the Bankruptcy Court said:

Once the bondholders agree to accept their payment

proposed under the Plan, as is the case, then all legal

claims of the bondholders againstR.S.1.D. Nos. 8 and 9,

as well as lien rights of Carbon County involving the

Debtor's property, are extinguished.

The Bankruptcy Court further said:

The bondholders, like Carbon County, are only secured up

to the value of the Debtor's R.S.I.D. property.

11 U.S.C. § 506(a). Whether that value, pegged at

$1,3~1,011.11, is said to pay assessments or principle or

interest, is unimportant. The plan payment is in full

satisfaction of all bondholder's indebtedness against the

R.S.I.D. property of the Debtor because all lien rights

of both Carbon County and the bondholders are being

extinguished.

The debtor owned more than 75 percent of the property in the

RSID, and as to the property that the debtor owned, all liens were

extinguished. The Bankruptcy Court's order did not affect the

obligations of non-Joint Venture property, and the legal issues

posed for this Court remain the same for the property within the

RSID not affected by the Bankruptcy Court's order.

O n February 4, 1993, the District Court denied the

underwriters' and bondholders* motion challenging property value

evidence, left undecided the motion concerning the agreement to

provide further security, and granted summary judgment in favor of

the County. The underwriters and bondholders appeal.

Is a county required to continue to levy general taxes and

loan money to an RSID revolving fund created pursuant to

5 7-12-2181, MCA, when the RSID is deficient, and the revolving

3
fund may never be sufficient to retire the bonds, and the county's

loans may never be repaid?

Rule 56(c), M.R.Civ.P., provides that summary judgment should

be granted when the record does not contain any genuine issue of

material fact and the moving party is entitled to judgment as a

matter of law. The scope of review for a suit that is disposed of

by summary judgment by a judge where the facts are uncontested, is

broader than in other appeals, and this Court may examine the case

and reach a conclusion according to our findings. District No. 55

v. Musselshell County (1990), 245 Mont. 525, 527, 802 P.2d 1252,

1253.

The underwriters and bondholders contend that although the

District Court acknowledged that the revolving fund laws provide

that the County was obliged to make the loans, it ignored the laws

when it found that the County Commissioners are not required to

make further payments from the revolving fund. The County

Commissioners assert that the purpose of the revolving fund was to

provide short-term secured loans; it was not intended to be a

guarantee of partial payment.

When analyzing statutory law, courts look first to the plain

meaning of the words used in the statute, and if that is unclear,

then courts look to legislative history. State ex rel. Roberts v.

Public Service Commission of Montana (1990), 242 Mont. 242, 246,

790 P.2d 489, 492. If the statute's language is plain,

unambiguous, direct, and certain, the statute speaks for itself.

Blake v. State (1987), 226 Mont. 193, 198, 735 P.2d 262, 265.

9
The County was following a well-established process in Montana

when it created the RSIDs and financed the improvements by selling

bonds, and when it authorized the use of the revolving fund.

In 1913, the Legislature first authorized cities to create

special improvement districts (SIDs). Laws 1913, Ch. 89. In 1915,

the Legislature authorized the counties to create rural special

improvement districts. Laws 1915, Ch. 123. Prior to 1929, special

assessments were the only source of payment for the bonds, and when

these assessments were delinquent, many bonds were never paid. Two

problems arose: first, bonds matured sequentially, therefore, the

failure to pay bond payments placed the entire bond offering into

default: second, when property assessments were delinquent and the

city sold the property at a tax sale, statute provided that when

the tax deed was issued, all liens were extinguished. Once the

liens were extinguished, the city had no right to collect

delinquent SIDs, and consequently, bonds were not paid in full. In

1929, the Legislature mandated that cities create an SID revolving

fund to secure the prompt payment of bonds when interest becomes

due. Laws 1929, Ch. 63, § 1.

Before 1983, § 7-12-2181, MCA (1981), also required that any

county creating an RSID "shall . . . create, establish and maintain

. . . [a] revolving fund." (Emphasis added). The section was

amended in 1983 to read that a county 'Imay . . . create, establish

and maintain" (emphasis added) a revolving fund, making the

revolving fund voluntary. The Legislature also added a final

sentence to the section providing:

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Nothing herein shall authorize or permit the elimination

of a revolving fund until all the bonds and warrants

secured thereby and the interest thereon have been fully

paid and discharged.

Section 7-12-2181, MCA (1993).

In 1983, the Legislature amended § 7-12-2181, MCA, to allow

the counties to have a revolving fund. The sponsor stated in

testimony in support of his Bill:

Our present laws that establish bonds for SIDs and RIDS

have a revolving fund requirement that the whole tax

paying area is actually responsible for the payments of

those bonds. When you get into a period like we're in

now when payments are not being made, then the county has

to levy a property tax on the whole district to make

those bond payments. This is an alternate type of bond.

It would limit the obligation to the district where the

improvement is being made.

taxing backup of these bonds.

There would be no general

It would not affect the

existing law but it would create a new section for a new

type bond. Any developer who comes in is getting a cold

shoulder because the city does not want to extend itself

any further. This would say, if you can find a market

for your bonds they will still have a tax exempt feature

and it would not fall back on the general taxpayer, it

would only be an obligation to that district.

Hearings on H.B. 872 Before the Local Govt. Committee, Montana 48th

Legislature, at 4 (1983) (Statement of Representative Walter Sales,

sponsor of H.B. 872).

Once the bonds are issued

revolving fund, the Legislature,

the following:

with the agreement to use the

in § 7-12-2185(2), MCA, provided

The undertakings and agreements shall be binding upon

said county so long as any of said special improvement

district bond or warrants so offered or any interest

thereon remain unpaid.

Nothing in the statutes voids the commitment to loan from the

revolving fund if the RSID becomes deficient. We conclude that the

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plain meaning of the Revolving Fund Law and the legislative history

support the legislative intent to allow counties to choose whether

to finance the districts by issuing bonds secured by the revolving

fund. Here, the County Commissioners agreed to the revolving fund

obligation and issued bonds secured by the revolving fund. The

District Court quoted ss 7-12-2185(2) and -2181, MCA, and found

that "[t]he language of these statutes is clear that the County is

required to continue funding the revolving fund and to continue

making loans to the district funds so long as the bonds and

interest remain unpaid."

Because it is the obligation of the County to make loans from

the revolving fund, and the obligation might never be paid, the

District Court reasoned that this was in violation of the Montana

Constitution prohibiting indebtedness past a certain percent. In

Hansen v. City of Havre (1941), 112 Mont. 207, 114 P.2d 1053, and

in Stanley v. Jeffries (1929), 86 Mont. 114, 284 P. 134, we held

that this procedure is constitutional.

The District Court found that the loans from the revolving

funds to the deficient RSIDs are incurring additional debt to the

County, violating 5 7-7-2101(2), MCA (1984), which considered void

any bonds in excess of $150,000 without a majority vote by voters.

The court found that although notice must be published in the local

newspaper of the County's intention to create an RSID, it is mailed

only to real estate owners within the proposed district, therefore,

the property owners outside the districts have no notice to protest

the creation of the district or the bond issuance that they may be

12
required to pay. The court stated that neither Stanley, nor

Hansen, applies because neither decision addresses the question of

the county's obligation to make loans to an RSID when it has

defaulted on the bonds and loans from the revolving funds are

insufficient to cure the default.

Hansen decided the constitutional question concerning debt

limit and the revolving fund. The Hansen Court found that special

improvement district bonds secured by a revolving fund do not

constitute indebtedness of the city within the Montana

Constitution, Article XIII, Section 6 (1889), which provided at

that time that no city shall be allowed to become indebted, in any

manner or purpose, in the aggregate exceeding three percent of

taxable property value therein. Hansen, 114 P.2d at 1056. The

revolving fund is not chargeable with the bond payments, but makes

loans to the district fund secured by a lien on property in the

district. Hansen, 114 P.2d at 1056. Although the revolving fund

may pay part of the bonds, and the revolving fund is replenished by

a tax levy on property within the city, this does not create a city

debt, but is merely a loan arrangement to meet possible

deficiencies in the district fund whereby the city loans money from

the revolving fund. Hansen, 114 P.2d at 1056.

The District Court treated the bonds as general obligation

bonds because the County must continue to make loans from the

revolving fund and levy taxes to replenish the fund. However, a

general obligation would mandate that the bonds be paid when due

from the County's available funds, and if funds are insufficient,

13
from tax levies upon all taxable property within the County.

Sections 7-7-2205 and -2206(4), MCA. On the other hand, special

improvement bond obligations are limited to the district funds, and

if necessary, receive loans from the revolving fund. If both funds

are insufficient to meet bond payments, there is no other source to

pay the bonds. The revolving fund levies are limited to an amount

that would increase the balance in the fund to no more than five

percent of the principal amount of the outstanding bonds under

§ 7-12-2182(1)(b), MCA. The bonds are still special, limited

bonds. We hold that the District Court erred in its application of

Hansen when it cited that decision for support that the County is

relieved of its obligation to make loans to the RSIDs.

The bondholders and underwriters argue that the District Court

also misapplied Stanley, which states any loss associated with the

bonds falls upon the bondholders and not the city. They also

contend the court erred when it relied on Griffin v. Opinion

Publishing Company (1943), 114 Mont. 502, 138 P.2d 580, for support

that any loss caused by delinquent assessments falls upon the

bondholders and not the County.

In StanleV, two challenges were present. The first challenge

concerned bonds issued after the revolving fund statutes were

enacted and secured by the revolving fund. The second challenge

concerned bonds issued before the revolving fund statutes were

enacted. This Court held that the bonds issued before the

revolving fund laws were enacted were not secured by the revolving

fund, and any loss falls upon the bondholders and not the city.

14
Stanlev, 284 P. at 139-40. In Griffin, the issue was whether a

newspaper article questioned the source of payment for SID bonds

and the truth of the article. In analyzing the article's truth,

the court said SID bonds were not an obligation of the city.

Griffin, 138 P.2d at 588.

Here, the County contends that the bondholders are private

parties and the obligation to make loans from the revolving fund to

repay the bonds is an unconstitutional guaranty of a private

party's obligation in violation of Article VIII, Section 1, of the

Montana Constitution, requiring that state funds be used for public

purposes.

This Court has consistently upheld the revolving fund law as

constitutional when it authorizes a loan or donation of public

revenues for the benefit of bondholders in payment for the special

improvements in a district, whereby bonds are secured by the

revolving fund.

Although bondholders will profit by the revolving fund law,

the provision will partly avoid the past scenario where bondholders

suffered the loss when a certain percent of property owners fail to

pay the property assessments. Stanley, 284 P. at 138. The Stanlev

Court stated:

[T]he laying out and improvement of streets, alleys,

sewers and the like is essentially a public purpose

benefitting the entire community, although the work is

done in but a portion of the city, and . . . each portion

of the city might be thus improved at the general public

expense, and no taxpayer could be heard to complain

thereof. In other words, in order to erect any public

improvement by the creation of special improvement

districts, both general benefits to the municipality and

special benefits to particular property must be

15
conferred--the special benefit to adjacent property is

but incidental to the general public: it could not

otherwise lawfully be created . . . .

. . . [T]he Legislature . . . might have, lawfully,

imposed a much greater burden upon the municipality.

Stanlev, 284 P. at 138-39. The public policy behind the SID

statute was to build communities by creating districts within the

city and providing improvements, and similarly, the policy behind

RSIDs was to improve rural areas which also benefits the entire

county. Stanlev reveals that losses from delinquent assessments

were contemplated, especially given the period in Stanley, where

great losses to bondholders were likely because when a tax deed was

issued, the unpaid assessment lien on the properties were

extinguished, and the bonds issued before the revolving fund laws

were enacted were not secured by the fund. Stanley, 284 P.2d at

139. Also, the city received no consideration for pledging the

security, therefore, to make loans from the revolving fund would

authorize a tax levy for a private purpose. Stanley, 284 P.2d at

139.

We hold that the loans from the revolving fund and subsequent

tax levies are within the constitutional mandates of Article VIII,

Section 1, of the Montana Constitution, requiring that state funds

be used for public purposes.

The County relies on White v. State (1988), 233 Mont. 81, 759

P.2d 971, and Hollow v. State (1986), 222 Mont. 478, 723 P.2d 227,

for authority to support its argument that the revolving fund and

the obligation to tax county property owners to fund the revolving

16
fund is an unconstitutional pledge of credit. These decisions are

distinguishable and do not apply to these facts.

White concerned a bill establishing a program empowering a

special science and technology board to funnel bond proceeds into

private business ventures through technology investments. This

Court found that the statute required the Legislature to provide

the difference between the board's return on the investment of bond

proceeds and the bond obligations, which were used for the benefit

of private businesses, and was, in effect, a direct pledge of the

state's credit to secure bonds. White, 759 P.2d at 974. This

Court denounced this pledge to secure bonds where the proceeds are

to be used for the benefit of private businesses. White, 759 P.2d

at 974. Here, the bond proceeds were used to benefit Carbon County

by providing improvements to RSIDs within the County--not to

private businesses.

For the same reason, Hollow does not apply because that

decision also dealt with private debts and obligations. Hollow

concerned an act that made an open-ended promise to loan coal

severance tax revenues from an in-state investment fund to an

economic guarantee fund, which was used to secure bonds for private

economic development projects. Hollow, 723 P.2d at 232. Here, the

RSIDs receive the benefit of the improvements, and the debt is

charged to the district, not to the County. The County is

obligated only to make loans to the district pursuant to the

revolving fund laws and its agreements. The County receives an

17
asset in return, a loan receivable secured by a lien on the RSID

property and the RSID fund for repayment.

We hold that the County's obligation to make loans from the

revolving fund and the obligation to levy taxes to fund the

revolving fund is not an unconstitutional pledge of credit.

The underwriters and bondholders assert that because the

relationship between them and the County was contractual, and the

County was authorized to enter into a contract to establish a

revolving fund, this Court should enforce the contract.

Public bodies are as bound by their contracts as are private

parties. State v. City of Helena (1952), 125 Mont. 592, 602, 242

P.2d 250, 255. Where the language is *@clear and unambiguous there

is nothing for the court to construe; the duty of the court is

simply to apply the language as written to the facts of the case,

and decide the case accordingly." Bain v. Williams (1990), 245

Mont. 228, 231, 800 P.2d 693, 695 (quoting Danielson v. Danielson

(1977), 172 Mont. 55, 58, 560 P.2d 893, 894). In this case, both

the County's resolutions authorizing issuance of the bonds, and the

bond purchase agreement between the County and the underwriters,

contain the County's promise to create, use, and fund a revolving

fund subject to the maximum limitations in § 7-12-2182, MCA, if

assessment payments were insufficient. The agreements are clear

and unambiguous, and the parties had mutual understanding of the

County's obligations.

The County freely entered into and agreed to the terms within

the resolutions and the bond agreement. In fact, in April 1984,

18
the county passed a resolution to offer bonds with a revolving fund

pledge. The revolving fund commitment made in the subsequent

resolution on August 30, 1984, is nearly identical to the earlier

resolution; the bonds were drafted pursuant to the requirements in

5 7-12-2170, MCA (repealed 1989). Those who enter a contract are

charged with the responsibility of acquainting themselves with the

agreement terms, and those who execute a written contract are

presumed to know its contents and terms; they cannot obtain relief

unless they show ambiguity in the contract, misrepresentation, or

bad faith. Johnson v. Estate of Shelton (1988), 232 Mont. 85, 90,

754 P.2d 828, 830-31.

The County was also seeking the benefits of the improvements

of property and increased property values within the County. It

used the security of the revolving fund to encourage people to buy

the bonds. The bondholders relied on the promises to use the

revolving fund. The County Commissioners, having exercised their

discretion to institute the revolving fund, and having freely

entered into an agreement with the bondholders and the

underwriters, under both the statutes and terms of the agreement,

are obliged to carry out their contractual obligations. The

County's refusal to honor this agreement and authorize loans from

the revolving fund is a breach of the contract.

Where the Legislature has provided the requirement to levy

taxes to replenish the,revolving fund to meet the requirements of

this fund, it follows that it is mandatory that the revolving fund

be used for the purpose intended-- to make loans to the district

19
fund to make up any deficiencies. Hansen, 114 P.2d at 1059. The

Court in Hansen stated that under what was then 5 5277.3, RCU

(1937) I providing that the city "may" make the loans from the

revolving fund to the districts to make up any deficiencies, that

"maytl means "must" or *'shall" according to the Legislature's

intent: and, a "contract to do so does not bind successive

officers to perform a discretionary act" but makes the acts

mandatory regardless of the contract. Hansen, 114 P.2d at 1059.

With the exception of the liens and obligations that were

against those lots owned by the debtor Red Lodge Country Club

Estates Joint Venture at the time of the Bankruptcy Court's

judgment and which were not previously sold or agreed to be sold by

Joint Venture and that were extinguished by the Bankruptcy Court's

order of February 28, 1994, we conclude that the County's agreement

to make loans from the revolving fund is mandatory and not

discretionary. The County must continue to make loans to the

revolving fund and must continue to levy taxes to replenish the

revolving fund until the obligations not extinguished by the

bankruptcy proceedings are paid in compliance with § 7-12-2181,

MCA. Because the County receives a loan receivable secured by a

lien on the RSID property when it makes a loan from the revolving

fund, the County has the option to dispose of the remaining

delinquent assessment properties at a tax sale to acquire revenue

for the bond payments.

20
Other issues were raised by the parties, but because of our

holding on the issue discussed, we need not consider the other

questions.

We reverse the District Court's order for summary judgment and

remand for further proceedings in accordance with this opinion.

JustIce

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