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## THEATTORNEY GENERAL OF TEXAS

Honorable Edna Cisneros Opinion No. C-186 County and District Attorney Willacy County Re: (I)Authority ofWillacy Raymondville, Texas County to contract with aprivate firm tomake a feasibility study of and to recommend a financing plan for aproposed causeDear Miss Cisneros: way: (2) liability of county for payment ofprincipal and interest onCounty Causeway Revenue Bonds.
Inyour letter requesting an opinion of this office, you state thatWillacy County is exploring the feasibility of building a causeway from PortMansfield to Padre Island, the cost of the causeway tobe financed with aproposed revenue bond issue. In connection with the financing problems, you advise that the Commissioners' Court has entered into an agreement with a firm specializing inmunicipal finance to act as fiscal agents to explore theways andmeans of financing theproposed causeway and to evolve, if feasible, a firm plan of financing for the consideration of the Commissioners' Court.
You have asked the following questions:

1. "Does a county have the statutory authority to enter into an exclusive contract with a bonding firm granting to them the right to make a feasibility study and to recommend a financing program for the construction of a causeway tobe financed by a revenue bond issue?"

-898-Honorable Edna Cisceros, page 2 (C-186)

2. "Can the bond or financial structure of a countybe adversely affected in any way if said county should consummate an agreement with aprivate bonding firm tomake a feasibility study to determine the feasibility ofbuilding a causeway from themainland of said county to Padre Island tobe financed by County Revenue Bonds if such feasibility is established and if the revenue of such causeway would be insufficient tomeet suchbond requirements?"
3. "IS it legally possible for the county tobe obligated for defaulting interest payments orprincipal payments in any way if the causeway built upon apurely revenue bond basis fails to sustain sufficient traffic topay the interest on the indebtedness for four consecutive years or any period?"

In answer to question number 1, supra,we find no specific statutory authority for an agreement such as is described inyour request. However, Willacy County, by the provisions ofArticle 679523,Vernon's Civil Statutes, is authorized to construct, acquire, improve, operate, and maintain a causeway from onepoint in the county to Padre Island and to issue its revenue bonds payable solely from the revenues tobe derived from the operation thereof topay the cost of such construction, acquisition, or improvement. We think it ismanifest that in order to soundly exercise this authority granted by the Legislature, the advice and counsel of experts in the field of finance isnecessary. This is ahighly technical field and one calling for advice frompersons highly trained in suchmatters. This being the case,we think that authority to enter into such an agreement as is outlined inyour request is implied from the powers thathave been expressly granted to the Commissioners' Court. Pritchard & Abbott v. Patrick H.McKenna, 162Tex.617, 350 S.W.2d 333 (1961).

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Honorable Edna Cisneros, page 3 (C-186)

To answer questions 2and 3, supra, letus assume that county revenue bonds have been authorized, sold, and the proceeds used to finance construction of the causeway, and that the revenues derived,from the operation of the causeway are insuff2cient tomeet the principal and interest requirements of thebonds as such interest and principal become due. Article 6795b. Vernon's Civil Statutes, specifically provides in Section 1 that the bonds shall be ".
. .payable solely from the revenues . . .". Section 2of said article provides that "NObonds authorized hereunder shall ever be a debt of the county issuing them, but shall be solely a charge upon the revenues of the project and shall never be reokoned indetermining the power of the county to issue anybonds for any purpose authorized by law. Each suchbond shall contain this clause: 'Theholder hereof shall never have the right to demand payment of this obligation out of any funds raised or tobe raised by taxation.'
. . .". Therefore, at this point, it is clear that the financial structure of the county can notbe adversely affected and the county cannot legally be obligated for the defaulted payments insofar as taxmoneys are concerned. &Xwse v.Wils~a, 203 S.W.2d 791 (Tex.Civ.App. 1947). As towhat effect suehdefaults would have on the "credit rating" of the county, we can not say, as that isnot a legal question. At thepresent time, there is only oneway by which the county couldbecome legally obligated topay the principal and interest on outstanding causeway revenue bonds from tax funds. Article 795a, Vernon's Civil Statutes, authorizes the issuance of county taxbonds for the purpose of refunding such outstanding revenue bonds. Said article provides that the Commissioners' Court shall not authorize the issuance of such refunding bonds unless authorized at an election atwhich only the qualified voters who reside in the county andwho own taxable property therein andwho have duly rendered the same for taxation shallbe allowed tovote, and unless themajority of thevotes cast thereat are in favor of issuing thebonds. Article 795a further provides "That the aggregate principal amount ofbonds issued from time to time pursuant to thisAct and at any time outstanding, shall not exceed aprincipal amount which will permit the interest on and the principal of suchbonds tobe paid from a tax levied within the eighty cent (800) limitation provided by Article 8, Section 9 of the Texas Constitution
. . ."

-9oo-Honorable Edna Cisneros, page 4 (C-186) "

SUMMARY
Willacy County has implied authority to contract with aprivate firm tomake a feasibility study of and to recommend a financing plan for aproposed causeway. A county cannotbecome obligated topay the principal of and interest on causeway revenue bonds from tax funds unless refunding bonds are authorized asprovided by Article 795a.Vernon's Civil Statutes.

Very truly yours,
WAGGONER CARR

.~ .;ynY?&99+

APPROVED: Assistant
OPINION COMMITTEE W. V. Geppert, Chairman Howard W. Nays Dudley McCalla Malcolm Quick

APPROVED FOR THE ATTORNEY GENERAL By: Stanton Stone

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