Court Opinion

ID: 3540676
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:52:02.448299+00
Date Added: 2024-06-11T13:35:17.114168
License: Public Domain

Dear Representative Cairns:
This is in response to your opinion request asking the following question:
              How are the proceeds of a sale of bonds by a county to be disposed of when there is no intention of using the bond proceeds for the purpose for which their sale was approved by the voters of the county?
The facts which you give are as follows:
              In 1964 voters of St. Louis County approved the issuance of $5 million of bonds to finance the construction of incinerators for the county. Some of those bonds were sold and the proceeds placed in the bank. However, no incinerators were ever constructed and the county now has no intention of constructing incinerators.
              There seems to be no legal way of disposing of the excess of money remaining from the sale of those bonds. Article VI, Section  29 of the Constitution of Missouri states, `The moneys arising from any loan, debt, or liability contracted by the state, or any county, city, or other political subdivision, shall be applied to the purposes for which they were obtained, or to the repayment of such debt or liability, and not otherwise.'
              I am requesting your opinion as to how those funds may legally be disposed of.
We gather from your question and the facts as related in the request that at the time of the issuance of the bonds there was an intention to purchase incinerators which did not materialize for either a lack of need or for some other reason. We also believe that your request indicates that the bond money has not been used for any other purpose. You further anticipate that the proceeds from the sale of the bonds will be used to repay the bondholders and retire the bonds that there may be some excess money left over.
However, we believe that § 108.180, RSMo 1978, resolves the dilemma. This section provides in part:
         [P]rovided further, that any bonds or money remaining in the interest and sinking fund of any such county, city, incorporated town or village, school district, or other political corporation or subdivision of the state, after the extinction of the indebtedness for which such bonds were issued, shall be paid into the general revenue fund of such county, city, incorporated town or village, or other political corporation or subdivision, and into the building fund of such school district.
We believe that the legislative intent in the above statute is clear. We have found no cases which would help us on this subject. We, therefore, conclude from a plain reading of the language in the statute that the excess money after the bonds are retired remaining in the interest and sinking fund shall be paid according to § 108.180, RSMo 1978.
Very truly yours,
                                  JOHN ASHCROFT Attorney General