Honorable Weldon Holcomb Opinion No. WW-1210

Criminal District Attorney Smith County Re: TimeWarrants, Tyler, Texas County Budgets, Road and Bridge Dear Mr. Holcomb: Programs.

You inform us that Smith County has embarked upon a road andbridge project to cost some $2,500,000.00.

The undertaking isbeing financed by the issuance of timewarrants.

The program and its problems have heretofore been dealt with inAttorney General's Opinion No. WW-1174, dated October 25, 1961, addressed toyou.

Now, you submit some nine (9)additional questions raised by the County Auditor in connection with the program and themeans of its execution.

We will undertake to render our opinion on each question in the same order as presented but for the sake of brevity we shall paraphrase some of them.

1. Does Article 236Sa, V.C.S., require a separate issue of timewarrants for each contract involving the expenditure of $2000 ormore that the county may enter into in connection with its proposed road andbridge improvement program? The Commissioners' Court has estimated the overall cost of the completed project asnot exceeding $2.500.000.00Honorable Weldon Holcomb, page 2 (WW-1210

and has authorized the issuance of timewarrants in that amount to evidence the indebtedness. Contracts looking to the compl@tion of the job may be let and as they or their phases are performed, timewarrants inamounts necessary to evidence due legal claims maybe drawn from thebalance left in the original overall lump-sum authorization from time to time until the project is completed or the issue is exhausted. The order provides for the cancellation of any timewarrants not needed to complete the program.

In actuality, the procedure followed here is an "issuance of TimeWarrants for each contract." Witness this proviso in the order of the Commissioners' Court, Smith County, dated September 1, 1961.

II

. . .Although provision ishereby made to cancel claims and accounts yet to be incurred and topay contracts yet tobe entered into, nowarrant orwarrants shall ever actually be issued by delivery until and unless in exchange for an equal amount of indebtedness represented by the claims and accounts herein authorized, andwhich have been actually incurred by said County in acquiring rights-of-way, laying out, improving or constructing certain roads andbridges within the County, andwhich claims and accounts shall have been duly presented to, audited, allowed and approved by theCommissioners' Court, or until and unless in payment of itemized estimates or accounts duly submitted to and approved by the Commissioners' Court showing the amounts due contractors for the supervision, labor, materials, tools, equipment, machinery and supplies necessary for the construction and improvement of the County Roads and Bridges ccntemplated, under contracts duly and legally entered into."Honorable Weldon Holcomb, page 3 (WW-1210)

We deem such procedure legal under Article 2368a, V.C.S. In the absence of compelling language tobe found therein, a statute should notbe given a technical orunreasonable construction. 39Tex.Jur. Sec.gl,p*174.

2. Does Article 2368a authorize the issuance of timewarrants to evidence indebtedness arising from the services of investment bankers rendered in connection with the financing of theproject?

We understand that Smith County does not intend to meet this obligation by issuing timewarrants. Consequently, thequestion ishypothetical and there isno necessity for our opinion.

3. Smith County has arranged with a local bank for the latter to take up and pay facevalue for audited and approved claims arising from the project. Thebank will carry these claims until the county exercises its right to exchange timewarrants therefor. The claims will earn for thebank 4Jr%interest from the date payment ismade to the recipient until such exchange ismade. The timewarrants will bear 4% interest from their date until paid.

The first question is - Can theCounty legally contract to pay interest on the claims? It is our opinion that itmay. Lasater v. Lopez, 110 Tex.179, 217 S-W.373 (1919); Tyler v. Shelby County, 47 Fed.2d. 103: Rains v. Mercarztile Nat. Bank, 144 Tex.466, 191 S.W.Zd 850 (1946).

The second question is - Does this agreement topay interest create anew debt forwhich no taxhas been levied? In our opinion - no. The terms of the exchange will be on a dollar for dollar basis and the interest as adjusted will be the same. Therefore, no new obligation is imposed upon the county other than that dealt with inAttorney General's Opinion No.WW-1174, supra.

~4. This question isquite close toa re-submission of cuestion #lwhich we have answered. The author of the question r2lses twopoints that are obviously considered asI

l Honorable Weldon Holcomb, page 4 (WW-1210)

reasons why Article 2368a,V.C.S., contemplates separate timewarrant issues for "specific contracts as the specific contracts are let."

The first point is that Section 3,Article 2368a, V.C.S., "cannot be complied with."

We have anAffidavit of Publication before us dated September 11, 1961, and executed by the Classified Advertising Manager of aCity of Tyler newspaper. The attached "Notice to Bidders" shows a compliance with Section 3,Article 2368a, V.C.S.

The other point suggests thatbidders could not compete by agreeing toa lesser interest rate than that specified.

The contractors under the facts do not carry the county's debt. They receive facevalue for audited and approved claims and accounts and nothing more.

Assume,however, itwas otherwise. We fail to perceive why abidder could not figure his bid lower or higher to offset what he deemed an advantageous orunfavorable (asthe case might be) rate of interest on the debt he would carry.

5. We quote: " . . .does the law authorize the issuance of TimeWarrants for the purpose of purchasing lands necessary for right-of-way as provided, etc.?"

Articles 6674n, 6674n-2, 6673e-1, 6703, 2351,V.C.S., give authority to Commissioners' Courts to purchase rightsof-way; consequently, under the doctrine announced in Lasater v. Lopez, supra, theCourt has the implied power to issue time warrants toaccomplish the purpose. See also Madison County v. Wallace, 118 Tex. 279, 15 S,W,2d 535 (1929).

6,.We quote: " . e .Can any of theWarrant Funds be used for thepurpose of paying right-of-way agents, attorneys' fees, court costs, brokerage fees, expert witness, Honorable Weldon Holcomb. Page 5 (WW-1210)

fees, etc., or any other cost thatmight be deemed incidental expenditures?"

The timewarrants canbe used only for the purpose forwhich theywere authorized; to-wit: paying the expenditures tobe made in thepurchase of lands necessary for rights-of-way in respect toFederal, State, Farm-to-market and County Roads throughout Smith County and other necessary expenditures incidental to the purchase of such rights-of-way; for supervision, labor, materials, tools, equipment, machinery and supplies necessary for the construction and improvement of the County Roads and Bridges contemplated, under the direct supervision of the Commissioners' Court or contracts duly and legally entered into.

We note thepurpose clause includes - 8,

. . .other necessary expenditures incidental to the purchase of such rights-of-way
. . .'I It is our opinion that thematter ofdecision, along with the official responsibility therefor, relative to the ascertainment and adjudication ofwhat are other necessary incidental expenditures, isa function singularly at rest in the jurisdiction of the Commissioners' Court. See subdivision 10,Article 2351,V.C.S. Corvell County v. Fesette, 68 S.W. 2d 1066 (Civ.App., 1934, error dism.).

7. We quote: U . . .Does the County have the authority to invade (sic) the Constitutional Road and Bridge Fund Tax of said County and pledge the same for TimeWarrants . . .?'I

The Constitutional Road and Bridge Tax is the proper one to look to for the financing of the proposed improvements.

Section 9,Article VIII, Constitution of Texas. -Carroll v.Williams, 109 Tex.155, 202 S.W. 504 (1918).

8. This is aquestion directed atwhat person will advertise forbids onmaterial tobe used in the road andbridge program. Article 2368a,V.C.S., is silent on this detail...

Honorable Weldon Holcomb, page 6 (WW-1210)

In this case the publication of the required notice was over theCounty Judge's name and title.

It is our opinion that thiswas a compliance with Article 2368a. V.C.S.

Article 1659,V.C.S., isa general statute, whereas Article 2368a is special in the sense that itdeals with the procedure tobe followed in issuing timewarrants.

The general terms of'Article 1659, supra, must yield to the specific provisions ofArticle 2368a. supra, on this matter of publication. 39 Tex.Jur. 213, Sec. 114.

The actby the County Judge was aministerial function ofhis official capacity and the publication reflected a true statement ofwhat the Court had ordered, and we deem itproper for it to issue overhis signature. Akers v. Reminqton, 115 S.W.2d 714 (Civ.App. 1938).

9. We quote: "None of the expenditures which Iam now called on toapprove are set forth in thebudget for the year 1961, and thebudget has not been amended so as tobring the same into thatbudget. Nobudget has been made andno hearing held as required by Article 689a-11 by Smith County for expenditures for theyear 1962, andno tax rate has been fixed by any order entered of record by the Commissioners" Court for 1962. Therefore, I am of the opinion that the expenditures already made and those proposed tobe made are illegal and that Icannot approve the same. Please advise me regarding this situation."

The questions regarding the 1961 Budget have been answered inAttorney General's Opinion No.WW-1174, supra.

As for the 1962 Budget, we have been advised that it has been approved by the Commissioners' Court of Smith County inNovember, 1961, and that it includes the expenditures under the project, provides for a tax levy, and estimates the revenues tobe derived therefrom, all as the law provides.Honorable Weldon Holcomb, page 7 (WW-1210)

The question thenhas been reduced to one of timeliness. The law provides that the county judge shallbudget the fiscal affairs of the county inJuly and present it to the Commissioners' Court inAugust. Articles689a-9, 689a-11, V.C.S. There isno language in the Uniform Budget Law applicable to counties to indicate that thematter of time is one of essence. Itprovides no penalty nor imposes any forfeiture for abelated adoption of abudget.

. . .itdoes notnecessarily follow that a thing which a statute directs tobe done at aparticular time may not be done afterwards. Nor is it implied that an act, for which a statute affirmatively provides, will be ineffectual if it is done at a different time than that prescribed." 39 Tex.Jur. 38, Sec. 16.

SUMMARY Under the facts as submitted, Smith County has complied with Article 2368a, V.C.S., in authorizing timewarrants to evidence indebtedness arising from the designated road andbridge improvement program.

Very truly yours, WILL WILSGN Attorney General of Texas

GW-sHonorable Weldon Holcomb, page 8 (m-1210)

APPROVED: OPINION COMMITTEE: W. V, Geppert, Chairn'm J. C. Davis W. Ray Scruggs BillAllen REVIEWED FOR THEATTORNEY GENERAL By: Houghton Brownlee, Jr.