Honorable Ii. Pat Edwards

Civil District Attorney Hall of Recotids Dallas, Texas

Dear Sir: Opinion NumberO-3774 Re: Proceeds **of** bond funds **of** Common School Districts.

Weacknowledge receipt of your opinion request of recent date andquote from your letter as followe?

"The Reinhardt Common School District No. 16 of Dallas County, In the Fall of 1940, by an election duly called andheld, voted favorably for the issuance of $35,000.00 Schoolhouse Bonds 'for the purpose of provlding funds to be expended in payment of accounts legally contracted in constructing andequlpping a'public free school building of materials other than wood; installing necessary sanitary Improvements andpurchasing additional school grounds in andfor said district', In the ptieparation of preliminary orders and for the 'purpose of presenting the bond traneeript to your department for approval, the School Board hired and paid W.P. Dumaa,an attorney-at-law of Dallas County, Texas, the
sumof $150.00 attorney's fee, andalso paid the sumof $74.50 for the printing of the bonds. Whenthe bonds were offered for sale
onMarch 15, 1941, ajoint bid wasreceived from Jam&s,Stayart &Davis, Inc. andBeckett, G,llbert &Co., Inc., a true and correct copy of which is herewith enclosed, andwhich bid you will observe wa8contingebtupon the 'simultaneous acceptance by the Board of Truet;ees of the District of the attached contraot.Honorable R. Pat Edwards, page 2 (O-3774)

Byparagraph 2of the attached contract it appears these alleged bond buyers agreed that at thelr expense andwith the assistance of the trustees @tosecure and compile all necessary data and Information andto prepare all necessary forms andto doall things necessary to a full and **fair** presentation of application for the sale of said bonds by the District to the State Board of Education **for** InvCstment In the Permanent School **Fund ’** 
**,** and In consideration of such servicers it appears from the contract that the Board of Trustees agreed to pay the purported buyers the sumof $500.00 caah. And, It will be observed further that this contract provided that this sumIshouldbe paid regardless of whether the bonds were delivered to these purported buyers or to the State Board of Education.

“As stated above, the Board of Trustees had already contracted to pay Mr.Dumae~ the 8umof $150.00 attorney’s fee for preparing the bond transcript andpresenting the same to **your** department, andthe sumof $74.50 ’ expense of printing the bonda, anda6 ehown by the attached letter from James, Stayart &Davla, Inc. onMarch 15ti-1, 1941, whenthis contract in question wasentered into, the School District had already prepared to a great extent the Application Form**for** presenting the bonds to the State Board of Education, so that it was necessary to do very little to complete this minor part of the proposed services. Therefore, aa explained by these buyera, their services consisted in this reepect ‘almost solely of the prlmarypart of the within described full and fair presentation of Application’

. This is8ue of bond8wasduly purchased by the State Board of Education for the price of par and accrued Interest plus a premiumof $519.99. TheCounty Superintendent of Schools was not advised of this contract, and subsequent to the receipt of the purchaee price of the bonds from the State Board of Education, he joined in the payment of the attorney’s fee and cost of printing the bonds, butHonorable H. Pat Edwards, page 3 (O-3774)

whenpresented wfth a request to join with the,Trustees in the payment of $500.00 to these alleged bidders for their so-called

,, servibes,~ the effect **of** which was to require' V;heState Board of Education to bid above **par** andaccrued Interest for the bonds, refused to authorize such paymentandaddressed
an Inquiry to this office as to the legality of~paylng from the proceeds of thfs bond is- <sue,$500.00 for alleged servfces under this contract hereto attached. TheSchool Board has nofunds other than the proceeds of this bond issue from which paymentmaybe made.

* * + * * *

"Canthe trustees of a commonschool district pay out of the bond account, which had been legally voted by the people of this district, a fee to proposed bond buyers for compiling data and information onrequired forms and such other things as might be necessary for a full andfafr presentatfon of fLppllcatlon for the sale of such bonds to the State Board of Educatfon for Investment l.nthe Permanent School Fund?"

This department has heretofore held that all absolutely necessary expenses inourred in the issuance and sale of bonds maybe pafd out of the proceeds received from the sale of the bonds* Opfnfon Number O-131:!* .Thedetermination of necessary expense must be based uponfacts peculiar to each issue, the knowledge of which obvfously fs within the province of the persons charged by lawwith administering the affairs of the issuing agency. It will be observed that the lawhas conferred uponthe County Superintendent the duty of approving expendetupes of commonschool dlstr9cts (Article 2693, Revised Cfv%l Statutes) andwe gather from the facts stated in the instant matter that such offfcer has exercised his authority by declining to approve the payment in questfon. It must, therefore, be presumed by this department that he has possecsfon of the facts, andhis judgment thereon cannot be questioned fn the absence of a showfng that he is arbitrarily abusing the authorfty vested in him.h -?

Honorable H. Pat Edwards, page 4 (O-3774)

We, therefore, hold that under the lawhis action is concluelve onus.

mmnm Auc327, 1941 Very truly yours
/e/ Grover Sellers ATTORNEY GEIVRRAL

OFTEXAS

FIRSTASSISTANT ATTORNEY

GENERAL

COB-s:lm By /6/ Claud 0. Boothman Claud 0. Boothman

Assistant . . I