September 7, 1965 #-7x!LLN Pfw I

Honorable Wallace Shropshlre County Attorney Travis County Austin, Texas OpinionNo. C-499

Re: Whetheror not county funds may be transferred from an exlstlngline item In the countybudget to another exlstlng line Item and relatedquestions concerning the amendment of the county Dear Mr. Shropshlre: budget.

This office Is In receipt of your letter of August 10, 1965, whereinyou request our opinion on variousquestions lnvolvlng amendment of the county budget under the Texas Budget Law. We quote the questions posed by you as follows:

'II 1 Where all of the budgeted funds for a particular line item or object havebeen expended bc t there is a surplus In other llnr Item accouri‘,s In the Department budget, what is theproper procedure to be followedby the Commlssloners~Court In transferring funds from the surplusaccounts to thedepleted account: (Can these fundsbe transferred from the budget of one Departmentto another Department?) "(a) Is It necessary for the Court to declare an emergency as set out in Art. 6&a-11? "(b) Or may the Court simplyenter an order authorizing the County Auditor to affect the transfer of these funds a8 might be Indicatedby Art. 6&a- 20? "(c) If (b) Is permissible shoulda formal order be drawn or will a mere entry on theminutes of the Court showing what was done suffice? 11

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"2. .(a) What Is the properprocedure to be followed in amending the budget 80 as to create a new object or line Item which was notbudgeted originallybut for which new object surplus funds are available In other budgeted line ltem accounts?
-2355-Hon. Wallace Shropshlre,page 2 (Ca99 )

What is the procedurewhere new objects or expendltures exceeds the budget? "(b) Will a declarationof emergencyby the Commlssloner.9~

Court as set out in Article 68ga-11 suffice to accomplish such a transfer?
II

. . .

“3. (a) Where the county has Incurredobligations for expenditureswhich were not in the budget when It was adopted and withoutprior authorizationof the Commissioners'Court,will the subsequent authorizationof paymentby the Commissioners1Court be tantamount to a budget amendment or must the Commissioners'Court adopt the proper budget amendment or change to affect the amendment just as If the obligationhad not yet been incurred? "(b) Is it the duty of the Auditor to lnform the Commissioners'Court that a bill presentedby him for payment Is authorizedwithin the budgeted funds and that there Is sufficient appropriated funds available to pay same? "(c) Can the Auditor approve a bill for presentment to fhe Commissioners'Court for payment If there Is no authorizedbudgeted approprlatlon or If the budgeted approprlatlonhas been depleted? ,I ,t

. . . In consideringyour questions,we quote the following pertinent statutes from the Texas Budget Law. Article 68ga-11, Revised Civil Statutes of Texas, In part reads:

"The CommlsslonerstCourt In each county shall each year provide for a public hearing on the county budget -- which hearing shall take place on some date to be named by the Commissioners1Court subsequent to August 15th and prior to the levy of taxes by said Commissioners'Court. Publicnotice shall be given that on saiddate of hearing the budget as prepared by the County Judge will be considered by the Commissioners'Court. Said notice shall name the hour, the date and the place where the hearing

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follows:shall be conducted. Any taxpayer of such county shall

have the right to be present and participate In said hearing. At the conclusionof the hearing, the budget as prepared by the County Judge shall be acted upon by the Commissioners’Court. The Court shall have authority to make such changes In the budget as In their judgment the law warrants and the interest of the taxpayerdemand. When the budget has been finally approved by the Commissioners Court, the budget, as approved by the Court shall be filed with the Clerk of the County Court, and taxes levied only in accordance therewith,and no expenditure of the funds of the county shall thereafter be made except In strict compliance with the budget as adopted by the Court. Except that emergency expenditures, In case of grave public necessity, to meet unusual and unforeseen conditionswhich could not, by reasonably diligent thought and attention,have been Included In the original budget,may from time to timebe authorizedby the Court as amendments to the original budget. In all cases where such amendments to the originalbudget Is made, a copy of the order of the Court amending the budget shall be filed with the Clerk of the County Court,and attached to the budget originally adopted.”
Article 68qa-20, RevisedClvll Statutes of Texas, reads as

“Nothing contained In this Act shall be construedas precludlnR the Legislature frommaking changes In the budget for State purposes or prevent the County Commissioners’Court from maklnp: changes In the budRet for county purposes or prevent the governing body of any Incorporated city or town from making changes In the budget for city purposes, or prevent the trustees or other school governing body frommaking changes in the budget for school purposes: and the duties required by virtue of this Act of State, County, City and SchoolOfficers or Representatives shall be performed for the compensationnow provided by law to be 7aid said officersrespectively.” (Emphasis added.

We note that one of thepurposes of the budget law is to effectively discourage and preventdeficit Bpendingby counties, In accordance with the public policy of the state, as establishedby Section 7 of Article XI, of the Texas Constitution. McClellanv. Guerra, 152 Tex. 373, 258 S.W.2d 72, (1953). -2357-Hon. Wallace Shropshlre,page 4 (c-499)

Section 11 of Article 68ga requires thatno funds of the county shall be expended except In strict compliancewith the budget as adopted by the Court. This section, however,does authorize amendments to the budget for emergency expendituresIn cases of grave public necessity, tomeet unusual and unforeseen conditionswhich could not, by reasonablydiligent thought and attention,have been Included In the originalbudget.

Section 20 of Article 68ga expresslyauthorizes the Commissioners tomake changes In the county budget for county purDoses * However. these changes are llmlted to chanceswithin the bbjects covered-by the budget. Rains v. Mercantll;National Bank of Dallas, 188 S.w.2~ 798, (Tex.Clv.App. 1945),affirmed 144 Tex. 490, mW.2d 850 (1946);Southland Ice Co. v. City of Temple, 100 F.2d 825 (5th Clr. 1939). It was held In Attorney General'sOpinion No, O-1053 that Section 20 of Article 68ga does not authorize the Commissioners Court to Increase the budget after Its adoption.

It Is our opinion that the Le lslature Intended for the restrictions In Section 11 of Article 88ga to apply to situations where new Itemswere added to the original budgetwhich would require an Increase In the original budget. This reasonlng Is In keeping with the purposes of the budget as outlinedabove. In the Rains case, the Court In dlstlngulshl between theprovisions of Section 11 and Section 20 of Article 6 3 9a said:
"The quotedportion of Art. 68ga-11 and Art. 68ga-20 seems to be the only provisionsrelating to amendment of the budget. Art. 68ga-11 is very specificas to when the county budgetmay be amended and the steps to be taken to make the amendment. It Is thought that the restriction as to amendment applies onlywhen new or additional expendituresnot provided for In the originalbudget are sought to be added by amendment. Under Art. 6&5ga-20, subject to llmltatlonof Art. 68ga-11, a county budgetmay be amendedat any time. The limitationof expenditures provided for by the second amendment to the Countybudgetwas not such as comes within the llmltationprovided In Art. 68ga-11." added.) (Emphasis

As will be noted from the above quote, the Court refers to the "chaqe" in Article 68ga-20 as an "amendment". It also points out that amendment under Section 11" and "amendmentunder Section 20" of Article 68ga are different.

Based on the above discussion, we now pass to the questions under question 1. We are of the opinion thatwhere all of

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the budgeted funds for a particular line itemhave been expended, but there Is a surplus In other line Item accounts In the departmentbudget, and the Commissioners'Court reallocates the funds, transferring funds from the surplus line Item account to the depleted line Item account, thismuld require an amendment to thebudget as contemplated by Section 20 of Article 68ga. Also, it Is our opinion that fundsmay be transferred from the budget of one department to the budget of another. However, Constitutional fundsmay not be transferred In contraventionof Section 9 of ArticleVIII of the Texas Constitution. The transferring of the funds In both Instancesabove do not requirenew expenditures not Included In the original budget, therefore, theprovisions of Section 11 of Article68ga are not applicable.

It Is our oplnlon that the correctprocedure In transferring the funds In the above two situationswould be to amend thebudget. However, thiswould not require the existenceof an emergencyas contemplatedby Section 11 of Article 689a. An order of the Commlssloners' Court showinghow the funds were reallocatedand showing that the budget was amended would, In our opinion, suffice to affect the amendment of the budget under the above situations.

In answer to your questlons In question 2, we are of the oplnlon thatwhere a new line item which was not budgeted orlginally, but for which new object funds are available in other budgeted accounts, the budgetmust be amended as contemplatedby Section 11 of Article 68ga to transfer funds to the new Itemaccount. in the Southland Ice Co. case, the Court said at page 829:

"The city could not transfer fundsand apply them to a new object not mentioned in thebudget, there being no emergency. . . .'

As can be seen from the above quote, an emergencymust exlst as contemplatedby Section 11 of Article 68ga In order to amend the budget and transfer such funds.

The correctprocedure to amend the budgetunder the clrcumstances of question 2 would be for the Commissioners'Court to enter an order, setting forth how the budget Is to be amended, finding an emergency to exist, that a grave public necessityexists to meet unusual and unforeseen conditions which could not, by reasonably diligent thoughtand attention have been Included In the original budget. A copy of such order should be filedwith the County Clerk and attached to the budget originally adopted.

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In answer to your first questionunder question 3, we are of the opinion that where the county Incurred obligations for expenditureswhich were not In thebudget when originally adopted, the Commissioners1Court could thereafteramend the budget to lnelude these obligations. TnMorrisonv. Kohler, 207 S.W.2d Clv.App. 1947, error ref. n.r.e.), the Court said at page 95851 (Tex. :

"We cannot agree with appellants'contention that the Order of the Commissioners'Court of Eecember 9, 1946, amending thebudget for the several commlsslonerts road precincts Is void for the reason that on such date no emergency then existedauthorizing such amendment because the servicesof the engineers, for which the amendment wasmade to cover,had already been performed. We find nothing in the budget law requlrlng the'budgetbe amended at the time or before an obllgatlon not Included In thebudget couldbe legally assumed. We feel that It would be altogether too strict a construction to place upon the provisionsof the budget laws governing counties to require that the budget should be amended at the time the obligationwas Incurred. On the contrary we believe that the Commissioners'Court in amending any budget to cover any Item of expense not already covered in the originalbudget should be controlled by the facts and circumstancesas existed at the time the obligationwas Incurredor assumed.

. . ."

We are further of the opinion that In order to legallypay these Incurred obligations whichwere not Included In the original budget, thebudget must be amendedas contemplatedby Sectlop 11 ?f Article 68ga. Under this section,this would require the existence of an emergency.

As to the duties of the County Auditor,Article 1651, Revised Civil Statutes of Texas,makes It hls duty to "see to the strict enforcement of the law governing county finances." As held by this office In Opinion No. 0-6220 (1944),this duty would Include the enforcementof the terms and provisions of the county budget.

In answer to your question (b)under question 3, we are of the opinion that the Auditordoes Inform the Commissioners' Court that a bill Is authorized by budgeted funds and that there are funds avallable to nav the bill when he aDDroves same. The Commlssloners~ Court has no ju&isdlctlon to allow the bill or claim without the approval of the Auditor. WyattMetal & BoilerWorks v. Llpscomb, 87 S.W.2d 331, (Tex.Clv.App. 1935, error ref.).To answer the (c) portion of your-third queaiion,we are of the-opinion that the.Atiditor should not approve a bill forpresentmentto the Commissioners'

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Court If there Is no budgetedapproprlatlon or If the budgetedappropriation has been depleted. Article 1666, Revised Civil Statutes of Texas, provides as follows:

"He shallprepare an estimate of all the revenues and expenses,and annually submit It to the Commissioners Court, which Court shall carefullymake a budget of all appropriations tobe set aside for the various expenses of the countygovernment In each branch and department. He shall open an account wlth each appropriation In said budaet, and all warrants drawn aaainst same shall be en&e; to said account. He shail carefully keep an oversight of same to see that the expenses of any deartment do not exceed said budget appropriation,and eep said court advised of the conditionof said appropriation accounts from time to time." (Bnphasisadded.)

SUMMARY -------

1. One of the purposes of the budget law Is to effectivelydiscourage and preventdeficit spendingby counties, In accordancewith the public policy of the state, as establishedby ConstltutlonalArticle 11, Sec. 7.

An amendment to the budget Is required as c%emplated by Section 20 of Article68ga when Commissioners'Court reallocates funds, transferringfunds from a surplus line Item account to a depleted line Item account in the same department.
3. The transferringof funds from one department to another is authorized and requires an amendmentas contemplatedby Section 20 of Article 68ga.
4. Correctprocedure In amendingbudget under Section 20 of Article 68ga would be for the Commissioners'Court to enter an order amendlng the budget and showinghow the funds were reallocated.

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5. An amendment to the budget is required as contemplatedby Section 11 of Article 68ga where funds are transferred from surplus new object funds to new line Item object not orlglnally budgeted.
6. Correct procedure in amend13 county budget under Section 11 of Article 6 ga Is for the Commissioners' Court to enter an order setting forth how budget Is to be amended, declaring an emergency, finding that grave public necessity exists tomeet unusual and unforeseen conditionswhich could not, by reasonablydillgent thought and attentionhave been Included In original budget, file copy of such orderwith County Clerk and attach such copy to budget originally adopted.

7. Budgetmay be amended so as to Include obligations Incurred before budget was adopted.
8. Budget must be amended as contemplated by Section 11 of Article 68ga in order to lnelude obligations Incurredby countywhich were not Included in original budget.
9. Eutles of County Auditor would Include the enforcement of the terms and provisions of the county budget.
10. When Auditor approves claim or bill, he does Inform Commissioners1Court thatbill Is authorized by budgeted funds and that there are funds available to pay such bill.
11. Auditor shouldnot approve bill for presentment to Commissioners1Court If there Is no budgeted appropriation for suchbill or If the budgeted appropriationhas been depleted. Very trulyyours,
WAGGONER CARR Attorney General

DA:ra:zt Dean Arrlngto Assistant -2362-fion.Wallace Shropshlre,page 9 (C-499 )

APPROVED: OPINION COMMITTEE

W. 0. Shultz, Chairman
John Reeves Grady Chandler Ivan Williams Robert Flowers
APPROVED FOR THE ATTORNEY GENERAL BY: T. B. Wright

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