Court Opinion

ID: 3458114
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:26:28.830161+00
Date Added: 2024-06-11T13:43:54.029514
License: Public Domain

Dear Mr. Martin:
You have requested the opinion of this office on behalf of the Parish President of the Parish of St. Landry. You advised that the voters of the Parish of St. Landry (the "Parish") obtained approval for and did issue $1,500,000 of General Obligation Tax Bonds (the "Bonds") in 1980 for the purpose of acquiring or constructing a new jail in the Parish, and acquiring the necessary land, equipment and furnishings therefor, title to which shall be in the public. The Bonds were issued pursuant to the provisions of Article VI, Section 33 of the Louisiana Constitution. The Bonds were refunded in May of 1993 resulting in a debt service savings. The remaining refunding bonds have a total unpaid balance, including principal, interest and trustee bank fees, of $237,002.50. The Parish has levied ad valorem taxes since 1980 to pay the Bonds and the refunding bonds. As of January 31, 2004, the sinking fund contains the sum of $1,180,824.69.
The question presented is whether the balance in the sinking fund could be used to pay for additions and improvements to the Parish jail facilities.
It has long been the opinion of this office that once a bond sinking fund contains sufficient money to retire the outstanding debt, the political subdivision may defease the outstanding bonds and any surplus remaining should be returned pro-rata to the taxpayers, if practical. If the expenses of the pro-rata return makes this impractical, the funds should be used for a purpose similar to those for which the bonds were issued. Op.Atty.Gen. Nos. 03-0112, 02-0221, 93-294, 93-211, 89-444, 88-566, 88-430, 88-407, 88-281, 83-707, 81-1333, 75-1034.
We think that it would be very appropriate, especially in this instance where the outstanding debt is approximately $237,000 and the balance in the sinking fund exceeds $1,180,000, for the bonds to be defeased and the levy of the tax to cease.
You advised that the amount accumulated in the sinking fund has been collected from 1980 to the present. The Parish believes it is not only impractical to determine how to
return the balance to the taxpayers on a pro-rata basis, but it may be nearly impossible to do so. Many of the taxpayers have died over the past 23 years and it would be difficult and expensive to attempt to locate all of the heirs.
The Parish proposes to use the balance in the sinking fund to address the critical improvements it needs for its jail and similar purposes, including the following:
(1) Build or remodel a jail facility for minimum security inmates (trustees).
(2) Build or remodel a jail facility adequate to serve as a juvenile detention center.
(3) Build a jail facility that will have trustees in one area and juveniles in a separate area utilizing a single cafeteria and operated in such a manner that the adult inmates and the juvenile inmates will never be in the cafeteria at the same time.
If the Parish governing body makes a determination that it is impractical and/or impossible to determine how to distribute the balance of the sinking fund after the defeasance occurs, it is the opinion of this office that it would be appropriate for the balance in the sinking fund to be used for purposes similar to the purposes for which the Bonds were issued, namely, for the purpose of acquiring or constructing a new jail in the Parish, and acquiring the necessary land, equipment and furnishings therefor, title to which shall be in the public. The three scenarios listed above would seem to be in accord with the provisions of the bond proposition.
Trusting this adequately responds to your request, we remain
                                  CHARLES C. FOTI, JR. Attorney General
                              BY: ____________________ MARTHA S. HESS ASSISTANT ATTORNEY GENERAL
CCF, JR/MSH