_: . ..-__ 

THEATTORNEY GENERAL 

OF TEXAS 

Honorable Edna Cisneros Opinion No. C-186 

County and District Attorney 

Willacy County Re: (I) Authority of Willacy 

Raymondville, Texas County to contract with 

a private firm to make a 

feasibility study of and 

to recommend a financing 

plan for a proposed causeDear Miss Cisneros: 

way: (2) liability of county for payment of principal and interest on County 

Causeway Revenue Bonds. 

In your letter requesting an opinion of this office, 

you state that Willacy County is exploring the feasibility of 

building a causeway from Port Mansfield to Padre Island, the 

cost of the causeway to be financed with a proposed revenue 

bond issue. In connection with the financing problems, you 

advise that the Commissioners' Court has entered into an 

agreement with a firm specializing in municipal finance to 

act as fiscal agents to explore the ways and means of financing the proposed 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 to be financed by a revenue bond 

issue?" 

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

2. "Can the bond or financial structure of 

a county be adversely affected in any 

way if said county should consummate 

an agreement with a private bonding 

firm to make a feasibility study to 

determine the feasibility of building 

a causeway from the mainland of said 

county to Padre Island to be financed 

by County Revenue Bonds if such feasibility is established and if the revenue of such causeway would be insufficient to meet such bond requirements?" 

3. "IS it legally possible for the county 

to be obligated for defaulting interest 

payments or principal payments in any 

way if the causeway built upon a purely 

revenue bond basis fails to sustain sufficient traffic to pay 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 in your request. However, Willacy County, by the 

provisions of Article 679523, Vernon's Civil Statutes, is 

authorized to construct, acquire, improve, operate, and 

maintain a causeway from one point in the county to Padre 

Island and to issue its revenue bonds payable solely from 

the revenues to be derived from the operation thereof to pay 

the cost of such construction, acquisition, or improvement. 

We think it is manifest that in order to soundly exercise 

this authority granted by the Legislature, the advice and 

counsel of experts in the field of finance is necessary. 

This is a highly technical field and one calling for advice 

from persons highly trained in such matters. This being the 

case, we think that authority to enter into such an agreement 

as is outlined in your request is implied from the powers 

that have been expressly granted to the Commissioners' Court. 

Pritchard & Abbott v. Patrick H. McKenna, 162 Tex.617, 350 

S.W.2d 333 (1961). 

-899- 
.I -- 

Honorable Edna Cisneros, page 3 (C-186) 

To answer questions 2 and 3, supra, let us 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 to meet the principal and interest requirements of the bonds 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 2 of said article 

provides that "NO bonds 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 

in determining the power of the county to issue any bonds for 

any purpose authorized by law. Each such bond shall contain 

this clause: 'The holder hereof shall never have the right to 

demand payment of this obligation out of any funds raised or 

to be raised by taxation.' . . .". Therefore, at this point, 

it is clear that the financial structure of the county can 

not be adversely affected and the county can not legally be 

obligated for the defaulted payments insofar as tax moneys 

are concerned. &Xwse v. Wils~a, 203 S.W.2d 791 (Tex.Civ.App. 

1947). As to what effect sueh defaults would have on the 

"credit rating" of the county, we can not say, as that is not 

a legal question. At the present time, there is only one way 

by which the county could become legally obligated to pay the 

principal and interest on outstanding causeway revenue bonds 

from tax funds. Article 795a, Vernon's Civil Statutes, authorizes the issuance of county tax bonds 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 at which only the qualified voters who reside in the 

county and who own taxable property therein and who have duly 

rendered the same for taxation shall be allowed to vote, and 

unless the majority of the votes cast thereat are in favor of 

issuing the bonds. Article 795a further provides "That the 

aggregate principal amount of bonds issued from time to time 

pursuant to this Act and at any time outstanding, shall not 

exceed a principal amount which will permit the interest on 

and the principal of such bonds to be 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 a private firm to make a 

feasibility study of and to recommend a 

financing plan for a proposed causeway. 

A county can not become obligated to pay 

the principal of and interest on causeway revenue bonds from tax funds unless 

refunding bonds are authorized as provided 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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