Court Opinion

ID: 3464943
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:29:33.872608+00
Date Added: 2024-06-11T12:48:56.765736
License: Public Domain

Dear Mayor Billiot:
You have requested an opinion of the Attorney General regarding a surplus in the City's bond sinking fund.  You state that the City issued bonds in 1978 to finance a portion of the needed renovations to its sewerage treatment plant.  At that time, a bond sinking fund was established to accumulate funds to pay debt service.  The source of said funds was an ad valorem tax and interest earned on investments. The sinking fund is now sufficient to retire the outstanding debt and leave approximately $10,000.00 in surplus, as well.  You seek our opinion as to what options are available for the use of the surplus funds.
As discussed by telephone on Tuesday, April 6, 1993, the City may defease the bonds.  Any surplus should be returned ratably if practicable. If the expenses of a pro rata return make this impractical, the funds should be used for a purpose similar to that for which the bonds were issued.  See Attorney General Opinion Nos. 88-566, 88-281, and 83-707, copies of which are attached for your reference.  If you elect to pay the bonds off at maturity, any surplus remaining should, again, be returned, if practicable, or used for a similar purpose.
As further discussed, we recommend that you contact your bond counsel for further information regarding the defeasance and any restrictions which may be imposed by the bond indenture agreement.
Trusting this adequately answers your question, I am
Very truly yours,
                           RICHARD P. IEYOUB Attorney General
                           BY: ROBERT E. HARROUN, III Assistant Attorney General
RPI/REH, III:lbw-0075R