OKLA. CONST. ARTICLE X, SECTION 27 WHICH IS THE PERTINENT SECTION DEALING WITH BONDED INDEBTEDNESS TO ACQUIRE PUBLIC UTILITIES. THE FINGERPRINT EQUIPMENT OF THE CITY OF OKLAHOMA CITY WAS ALSO PURCHASED WITH A BOND ISSUE ISSUED UNDER ARTICLE X, SECTION 27 OF THE CONSTITUTION.
IN REID, THE CITY OF WOODWARD SOLD THE POWER PLANT FOR $505,000.00. THE CITY USED SOME OF THE PROCEEDS TO PAY FOR SOME CITY INDEBTEDNESS ON SOME OF THE MACHINERY AND EQUIPMENT USED AT THE PLANT AND ALSO PLACED PART OF THE PROCEEDS IN THE SINKING FUND. THE CITY ATTEMPTED TO USE ABOUT 60% OF THE SALE PROCEEDS TO CONSTRUCT A LIGHT PLANT, GAS PLANT, AND SEWER SYSTEM. SOME TAXPAYERS SUED THE CITY AND ARGUED THAT THE REMAINING PROCEEDS WOULD HAVE TO BE PUT IN THE SINKING FUND PRIOR TO THE TIME THE EXCISE BOARD CALCULATED THE RATE OF AD VALOREM TAX FOR THE RESIDENTS OF THE CITY OF WOODWARD. THE ISSUE IN THIS CASE WAS WHETHER OKLA. CONST. ARTICLE X, SECTION 16 WAS A LIMITATION ON BOND PROCEEDS AS WELL AS PROCEEDS OF THE SALE OF ASSETS PURCHASED WITH BOND PROCEEDS. THE OKLAHOMA SUPREME COURT RULED THAT THE LIMITATIONS CONTAINED IN ARTICLE X, SECTION 16 APPLIED TO THE PROCEEDS OF THE SALE AS WELL AS TO THE ORIGINAL USE OF THE BOND PROCEEDS THEMSELVES. THE COURT STATED AS FOLLOWS:
"SECTION 16, ARTICLE X OF THE CONSTITUTION, IS A LIMITATION. TO CONSTRUE IT TO APPLY ONLY TO THE FIRST USE OF THE BORROWED MONEY WOULD BE TO DEFEAT ITS PRACTICAL OPERATION, FOR MONEY MIGHT BE BORROWED TO BUILD A LIGHT PLANT, AND THE MONEY SO BORROWED MIGHT BE USED TO BUILD A LIGHT PLANT, BUT THE LIGHT PLANT MIGHT BE SOLD AND THE PROCEEDS OF THE SALE MIGHT BE USED FOR SOME OTHER PURPOSE. WE CANNOT GIVE THIS SECTION A CONSTRUCTION WHICH WOULD OPERATE TO DEFEAT THE PURPOSE THEREOF. . . . THAT LIMITATION AS TO THE USE OF THE BORROWED FUNDS IS APPLICABLE TO SUBSEQUENT USES AS WELL AS TO THE FIRST USE THEREOF." 15 P.2D AT 997, 998.
THE COURT WENT ON TO POINT OUT THAT WHEN THE ASSET PURCHASED WITH THE BOND PROCEEDS IS SOLD, THE PROCEEDS WOULD HAVE TO BE USED FOR THE SAME PURPOSE FOR WHICH THE MONEY WAS BORROWED OR WOULD HAVE TO REIMBURSE THE TAXPAYERS. THE COURT DID NOT QUESTION THE CITY OF WOODWARD'S ABILITY TO SELL ITS LIGHT AND POWER PLANT. IT SIMPLY STATED THAT THE PROCEEDS OF THE SALE WOULD HAVE TO BE DEDICATED TO THE SAME PURPOSE FOR WHICH THE BONDS WERE ISSUED OR WOULD HAVE TO BE PLACED IN THE SINKING FUND TO REDUCE THE TAX BURDEN OF THE AD VALOREM TAXPAYERS.
I HAVE FOUND NO STATUTE OR ORDINANCE WHICH WILL LIMIT THE CITY'S ABILITY TO SELL ITS FINGERPRINT EQUIPMENT TO THE STATE OF OKLAHOMA. I HAVE NOT ACTUALLY ATTEMPTED TO LOCATE ANY CITY ORDINANCES ON THIS SUBJECT. BARRING SOME MUNICIPAL ORDINANCE PROHIBITION, THE CITY COULD SELL THE EQUIPMENT TO THE STATE OF OKLAHOMA, BUT