The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1938-11-17
CITY SPENDING
Continued from Page One)

ldOS. ne ucClucu IiletI IilC SOiiuiluiiiIy |
,enter bonds did not come under the
per cent debt limitation as being per-
nanent improvement measures and
oming under that head and not ap-
'licable under the head of being park,
playground or cemetery bonds. With
his Interpretation, the amount that
nay be expended for the balance of the
ear by the city, before the charter
of indebtedness is reached as
If August 81, 1888, is the sum of
l34 ,22O19. The charter limitation of
axable property of the city is $685.
1914. The excess of current liabili-
les over current assets on August 81,
938, was the sum of 1904, 1895.
He also held that the City of Ely did
lot come under the jurisdiction of Sec
ion 2070 of MaSon'S Minnesota Statutes
and that the figure of $40,974.15 to be
spent for the four months as contended
lid not apply to the city. Section 2070
reads that it shall be unlawful for the
authorities of any county, town, city,
village or school district, unless ex-
preSsly authorized by law, to contract
any debt or incur any pecuniary liza
bility for the payment of either the
principal or the interest of which during
the current or any subsequent years it
shall be necessary to levy a rate of
taxes higher than the maximum pre-
scribed by law. Every such contract
shall be null and void in regard to any
obligation thereby sought to be imposed
upon such corporation; but every officer,
agent, or member thereof who partici-
pates therein or authorizes the making
of such contract shall be individually
liable for it's performance. Every such
officer or agent who is present when
such contract is made or authorized
shall be deemed to participate in or
authorize the making thereof, as the
case may be, unless he enter Or cause
to be entered his dissent therefrom in
the records of such corporation"
He held that this section is limit
alton on authority of public officers to
incur indebtedness. The City of Ely
operates under a Home Rule Charter
This Charter has its own tax and debt
limitations. Section 207O was enacted
into law decades before the adoption
of the constitutional amendment which
made possible home rule charters.
Further he stated in his memoran-
dunn "as to matters of municipal con-
Germ, the people of the city, in adopting
home rule charter, have all the powers
bestowed by the legislature, save as
such power has been expressly or i'm
ter fixes the tax and debt limitations of
the city. OF course, said Judge Magney,
the legislature if it sees fit, has the
authority to fix tax and debt limita-
tons on municipalities operating under
such charters but taxation for NUM-
cipal purposes is purely matter of
municipal character. 1t is primarily
of local concern. Unless the legis-
lature of the state fixes limitations
which specifically apply to cities oper-
ating under Home Rule Charter, the
charter provision control"
''It seems therefore, to this court that
Section 2070 does not apply to the City
of Ely and that the charter provisions
as to tax and debt limitations apply
If Secion 2O70 did apply to the City of
Ely it apparently would not prevent the
city from getting behind in it's current
obligations to the extent of one year,
tax levy"
A question that arose and acted on by
Judge Magney was "can the Council of
the City of Ely legally overspend its
budget? The council contends that
under it's charter, it has right to
issue warrants, not to pay them for the
lack of funds, and let them accumulate
and draw interest. The plaintiffs con-
tend that the city has no right to in
cur obligations in any year in excess of
the amount of the budget, that is, in
excess of the amount of taxes collectible
in said year The general rule apple
able to the right of municipality to
issue warrants is stated in Mac OUTLAWS
Municipal Corporations, second edition,
Section 2401, which states:
IF the law does not forbid, warrant
may be issued upon the general fund
for lawfully incurred obligations, not
withStanding the want of money in
such fund to pay such interest. So
where there is no express provision
limiting the power of municipalities to
draw warrants only against appropri-
ationS to pay them Or against money
in the treasury or that will come into
the treasury within a year, munich
pality may issue warrants, although
there is no money in the treasury to
pay them and there will be none within
year; but where a statute or a
charter forbids the drawing of a war;
rant unless there is an unexpended
balance to the credit of the munich
patty in the fund on which it is drawn,
a warrant issued for sum in excess of
such amount is void"
There is nothing in the statutes of
this state forbidding the issuance of
such warrants if the opinion of Judge
Magney- is correct in holding that the
section in Mason'S Minnesota Statutes
for 1927 does not apply. Neither is
there any provision in the charter itself
which forbids the issuance of such war
rants. Counsel for the plaintiffs stated
that he has no quarrel with the gen.
eral proposition, that in the absence of
a specific provision prohibiting the
issuance of warrants without funds, the
city may do so.
Counsel claims, however, that the
whole tenor of the charter indicates
that there should be no warrants issued
without funds for their payment.