Untitled Texas Attorney General Opinion ( 1961 )

Honorable Weldon Holcomb Opinion No. WW-1210
Criminal District Attorney
Smith County Re: Time Warrants,
Tyler, Texas County Budgets,
Road and Bridge
Dear Mr. Holcomb: Programs.
You inform us that Smith County has embarked upon
a road and bridge project to cost some $2,500,000.00.
The undertaking is being financed by the issuance
of time warrants.
The program and its problems have heretofore been
dealt with in Attorney General's Opinion No. WW-1174, dated
October 25, 1961, addressed to you.
Now, you submit some nine (9) additional questions
raised by the County Auditor in connection with the program
and the means of its execution.
We will undertake to render our opinion on each
question in the same order as presented but for the sake of
brevity we shall paraphrase some of them.
1. Does Article 236Sa, V.C.S., require
a separate issue of time warrants for each
contract involving the expenditure of $2000
or more that the county may enter into in
connection with its proposed road and bridge
improvement program?
The Commissioners' Court has estimated the overall
cost of the completed project as not exceeding $2.500.000.00
Honorable Weldon Holcomb, page 2 (WW-1210
and has authorized the issuance of time warrants in that
amount to evidence the indebtedness. Contracts looking to
the compl@tion of the job may be let and as they or their
phases are performed, time warrants in amounts necessary
to evidence due legal claims may be drawn from the balance
left in the original overall lump-sum authorization from
time to time until the project is completed or the issue is
exhausted. The order provides for the cancellation of any
time warrants not needed to complete the program.
In actuality, the procedure followed here is an
"issuance of Time Warrants for each contract." Witness this
proviso in the order of the Commissioners' Court, Smith County,
dated September 1, 1961.
II . . . Although provision is hereby
made to cancel claims and accounts yet to
be incurred and to pay contracts yet to be
entered into, no warrant or warrants shall
ever actually be issued by delivery until
and unless in exchange for an equal amount
of indebtedness represented by the claims
and accounts herein authorized, and which
have been actually incurred by said County
in acquiring rights-of-way, laying out,
improving or constructing certain roads
and bridges within the County, and which
claims and accounts shall have been duly
presented to, audited, allowed and approved
by the Commissioners' Court, or until and
unless in payment of itemized estimates or
accounts duly submitted to and approved by
the Commissioners' Court showing the amounts
due contractors for the supervision, labor,
materials, tools, equipment, machinery and
supplies necessary for the construction and
improvement of the County Roads and Bridges
ccntemplated, under contracts duly and legally
entered into."
Honorable Weldon Holcomb, page 3 (WW-1210)
We deem such procedure legal under Article 2368a,
V.C.S. In the absence of compelling language to be found
therein, a statute should not be given a technical or un-
reasonable construction. 39 Tex.Jur. Sec.gl,p* 174.
2. Does Article 2368a authorize the issuance of
time warrants to evidence indebtedness arising from the
services of investment bankers rendered in connection with
the financing of the project?
We understand that Smith County does not intend to
meet this obligation by issuing time warrants. Consequently,
the question is hypothetical and there is no necessity for
our opinion.
3. Smith County has arranged with a local bank for
the latter to take up and pay face value for audited and ap-
proved claims arising from the project. The bank will carry
these claims until the county exercises its right to exchange
time warrants therefor. The claims will earn for the bank
4Jr% interest from the date payment is made to the recipient
until such exchange is made. The time warrants will bear 4%
interest from their date until paid.
The first question is - Can the County legally con-
tract to pay interest on the claims? It is our opinion that
it may. Lasater v. Lopez, 110 Tex.179, 217 S-W.373 (1919);
Tyler v. Shelby County, 47 Fed.2d. 103: Rains v. Mercarztile
Nat. Bank, 144 Tex.466, 191 S.W.Zd 850 (1946).
The second question is - Does this agreement to pay
interest create a new debt for which no tax has been levied?
In our opinion - no. The terms of the exchange will be on a
dollar for dollar basis and the interest as adjusted will be
the same. Therefore, no new obligation is imposed upon the
county other than that dealt with in Attorney General's Opinion
No. WW-1174, supra.
~4. This question is quite close to a re-submission
of cuestion #l which we have answered. The author of the
question r2lses two points tha t are obviously considered as
I
l
Honorable Weldon Holcomb, page 4 (WW-1210)
reasons why Article 2368a, V.C.S., contemplates separate
time warrant issues for "specific contracts as the speci-
fic contracts are let."
The first point is that Section 3, Article 2368a,
V.C.S., "can not be complied with."
We have an Affidavit of Publication before us
dated September 11, 1961, and executed by the Classified
Advertising Manager of a City of Tyler newspaper. The
attached "Notice to Bidders" shows a compliance with Sec-
tion 3, Article 2368a, V.C.S.
The other point suggests that bidders could not
compete by agreeing to a lesser interest rate than that
specified.
The contractors under the facts do not carry the
county's debt. They receive face value for audited and
approved claims and accounts and nothing more.
Assume , however, it was otherwise. We fail to
perceive why a bidder could not figure his bid lower or
higher to offset what he deemed an advantageous or un-
favorable (as the case might be) rate of interest on the
debt he would carry.
5. We quote: " . . . does the law authorize the
issuance of Time Warrants for the purpose of purchasing
lands necessary for right-of-way as provided, etc.?"
Articles 6674n, 6674n-2, 6673e-1, 6703, 2351, V.C.S.,
give authority to Commissioners' Courts to purchase rights-
of-way; consequently, under the doctrine announced in Lasater
v. Lopez, supra, the Court has the implied power to issue time
warrants to accomplish the purpose. See also Madison County v.
Wallace, 118 Tex. 279, 15 S,W,2d 535 (1929).
6 ,. We quote: " . e . Can any of the Warrant Funds
be used for the purpose of paying right-of-way agents, at-
torneys' fees, court costs, brokerage fees, expert witness
,
Honorable Weldon Holcomb. Page 5 (WW-1210)
fees, etc., or any other cost that might be deemed incidental
expenditures?"
The time warrants can be used only for the purpose
for which they were authorized; to-wit: paying the expendi-
tures to be made in the purchase of lands necessary for
rights-of-way in respect to Federal, State, Farm-to-market
and County Roads throughout Smith County and other necessary
expenditures incidental to the purchase of such rights-of-way;
for supervision, labor, materials, tools, equipment, machinery
and supplies necessary for the construction and improvement of
the County Roads and Bridges contemplated, under the direct
supervision of the Commissioners' Court or contracts duly and
legally entered into.
We note the purpose clause includes -
8, . . . other necessary expenditures
incidental to the purchase of such
rights-of-way . . .'I
It is our opinion that the matter of decision, along
with the official responsibility therefor, relative to the
ascertainment and adjudication of what are other necessary
incidental expenditures, is a function singularly at rest in
the jurisdiction of the Commissioners' Court. See subdivision
10, Article 2351, V.C.S. Corvell County v. Fesette, 68 S.W.
2d 1066 (Civ.App., 1934, error dism.).
7. We quote: U . . . Does the County have the au-
thority to invade (sic) the Constitutional Road and Bridge Fund
Tax of said County and pledge the same for Time Warrants . . .?'I
The Constitutional Road and Bridge Tax is the proper
one to look to for the financing of the proposed improvements.
Section 9, Article VIII, Constitution of Texas. -Car-
roll v. Williams, 109 Tex.155, 202 S.W. 504 (1918).
8. This is a question directed at what person will
advertise for bids on material to be used in the road and bridge
program. Article 2368a, V.C.S., is silent on this detail.
..
Honorable Weldon Holcomb, page 6 (WW-1210)
In this case the publication of the required notice
was over the County Judge's name and title.
It is our opinion that this was a compliance with
Article 2368a. V.C.S.
Article 1659, V.C.S., is a general statute, whereas
Article 2368a is special in the sense that it deals with the
procedure to be followed in issuing time warrants.
The general terms of'Article 1659, supra, must yield
to the specific provisions of Article 2368a. supra, on this
matter of publication. 39 Tex.Jur. 213, Sec. 114.
The act by the County Judge was a ministerial function
of his official capacity and the publication reflected a true
statement of what the Court had ordered, and we deem it proper
for it to issue over his signature. Akers v. Reminqton, 115
S.W.2d 714 (Civ.App. 1938).
9. We quote: "None of the expenditures which I am
now called on to approve are set forth in the budget for the
year 1961, and the budget has not been amended so as to bring
the same into that budget. No budget has been made and no
hearing held as required by Article 689a-11 by Smith County
for expenditures for the year 1962, and no tax rate has been
fixed by any order entered of record by the Commissioners"
Court for 1962. Therefore, I am of the opinion that the ex-
penditures already made and those proposed to be made are
illegal and that I cannot approve the same. Please advise me
regarding this situation."
The questions regarding the 1961 Budget have been
answered in Attorney General's Opinion No. WW-1174, supra.
As for the 1962 Budget, we have been advised that it
has been approved by the Commissioners' Court of Smith County
in November, 1961, and that it includes the expenditures under
the project, provides for a tax levy, and estimates the reve-
nues to be derived therefrom, all as the law provides.
Honorable Weldon Holcomb, page 7 (WW-1210)
The question then has been reduced to one of time-
liness. The law provides that the county judge shall budget
the fiscal affairs of the county in July and present it to
the Commissioners' Court in August. Articles 689a-9, 689a-11,
V.C.S.
There is no language in the Uniform Budget Law ap-
plicable to counties to indicate that the matter of time is
one of essence. It provides no penalty nor imposes any for-
feiture for a belated adoption of a budget.
. . . it does not necessarily follow that
a thing which a statute directs to be done
at a particular time may not be done after-
wards. Nor is it implied that an act, for
which a statute affirmatively provides, will
be ineffectual if it is done at a different
time than that prescribed." 39 Tex.Jur. 38,
Sec. 16.
SUMMARY
Under the facts as submitted, Smith County
has complied with Article 2368a, V.C.S.,
in authorizing time warrants to evidence
indebtedness arising from the designated
road and bridge improvement program.
Very truly yours,
WILL WILSGN
Attorney General of Texas
GW- s
Honorable Weldon Holcomb, page 8 (m-1210)
APPROVED:
OPINION COMMITTEE:
W. V, Geppert, Chairn'm
J. C. Davis
W. Ray Scruggs
Bill Allen
REVIEWED FOR THE ATTORNEY GENERAL
By: Houghton Brownlee, Jr.