The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1895-08-23
MANKATo FREE PRESS.
CALL A HALT.
One of Our Taxpayers Thinks it
Would be a Good Plan Until
City Revenues Catch Up
With Expenses.

1t is refreshing during this period
of recklessness in management OF
municipal corporations to know that
there are some cities in our state
which are managed on business prin-
ciples and have healthy treasury. A
recent report of the financial condi-
tion of the City of Red Wing shows
that at the end of the month of July,
1895, after paying all orders it had
S14, 924.32 in the treasury. The esti-
mated expenses to the first of March,
1896, which is the end of the fiscal
year are Sl4,157 leaving a balance of
S767.32 to 60 upon. In marked con-
trast is the financial condition OF this
city.
Under the charter of this city the
fiscal year commences April 1st and
the taxes levied last year for the sup
port of the city government for this
fiscal year ending March 81, 1896,
have nearly all been collected and
paid over to the city treasurer, and
which hassnot only all been paid out
but the books of the city treasurer
show that of date of Aug. /, 1895 the
current fund has been overdrawn
81, $50. 9S and the water fund 81, 925. 40.
Besides this there is outstanding in
negotiable notes, issued by the city
government without authority, in
hands of private parties over Sl2,-
900 in amount, drawing mostly 8 per
cent interest. The interest feature
alone reaching up to the high figure
of one Thousand dollars per annum. 1t
is estimated that the city will be
compelled to borrow at least twenty
five thousand dollars to meet its run
ming expenses for the balance of this
fiscal year, and the question natur-
ally arises whether the city has any
legal right to borrow money for this
purpose.
Our charter provides that ''the
common council may during the
fiscal. year by vote of two-thirds of
the members thereof issue the bonds
of said city bearing interest at not
exceeding per cent per annum, and
for time not exceeding one year in
such amounts and under such regula-
tions as the common council may
prescribe inIanticipation of the taxes
and revenues of such fiscal year pro-
vided that the amount of such bonds
shall nots at, any time exceed one
third of such taxes and revenues"
1t will be tobserved that this borrow
ing power is limited to cases when
the borrowing is in anticipation OF
the taxes land revenues of such fiscal
year. But there are no taxes and re-
venues to be anticipated for this
fiscal year, but the same have
already been collected and been all
paid,out not to meet the legitimate
expenses of this,current year, but to
pay an Indebtedness against the city
of preceding years, which action on
the part of our common council was
clearly,illegal. 1t has been recently de-
cided in the supreme court
of California that taxes COL
lected :, must be applied first to
meet sthe current expenses of a
city for the year for which they are
levied rather than to pay expenses of
prior Indebtedness.
The power to borrow money by is
suing of bonds as above quoted is the
only provision in our charter in re-
lation to the subject and that mode
being expressly given in our charter
is the exclusive mode.
1t is held by Dillon in his work on
municipal corporations that when
a mode Of contracting is specially
and plainly prescribed and limited
that mode is exclusive and must be
preserved or the contract will not
bind the corporation, "and tits gen.
eral and fundamental principle of law
that all persons contracting with
municipal corporation must at that
time inquire into the power of the
corporation to make the contract and
a contract beyond the scope of the
corporate power is void," and further
says, the ''author would be strongly
inclined to deny the existence of an
implied power to borrow money"
/ am aware that it will be urged that
the common council in July, having
made a levy, money can be borrowed
in anticipation of the taxes which will
be collected thereon, but in my judg-
ment this levy is for the purpose of
defraying the expenses of the city for
the year 1896; otherwise our city will
always be one year in debt, a contin-
gency not contemplated by our char
ter. 1t would have been better for
our common council to have increased
the levy sufficient to have cleared up
all our old indebtedness, and then we
would sometime be out of the woods.
also observe that our charter pro-
vides that "the board of public works
shall have no power to contract or
otherwise to exceed, in the doing of