Judges: Jim Smith, Attorney General Prepared by: Anne Curtis Terry, Assistant Attorney General
Filed Date: 9/20/1983
Status: Precedential
Modified Date: 7/5/2016
Mr. Donald R. Hall City Attorney City of Fort Lauderdale Post Office Drawer 14250 Fort Lauderdale, Florida 33302
Dear Mr. Hall:
This is in response to your request for an opinion on substantially the following questions:
QUESTION ONE1. IS A MUNICIPALITY EMPOWERED TO PLACE OR HOLD ITS FUNDS IN DEPOSIT ACCOUNTS IN THE FORM OF CERTIFICATES OF DEPOSIT IN OUT-OF-STATE BANKS AND SAVINGS AND LOAN ASSOCIATIONS?
2. IS A MUNICIPALITY EMPOWERED TO INVEST ITS SURPLUS FUNDS IN COMMERCIAL PAPER AND BANKERS ACCEPTANCES?
The provisions of s 166.261(1)(c), F.S., were added to s 166.261 by s 4 of Ch. 79-262, Laws of Florida. See also, s 2 of Ch. 79-119, Laws of Florida, for similar provisions. Subsection (1)(c) of s 166.261 authorizes municipalities to invest their surplus public funds in:
Interest-bearing time deposits or savings accounts in banks organized under the laws of this state, in national banks organized under the laws of the United States and doing business and situated in this state, in savings and loan associations which are under state supervision, or in federal savings and loan associations located in this state and organized under federal law and federal supervision, provided that any such deposits are secured by collateral as may be prescribed by law[.] (e.s.)
Section 166.261(1)(c) does not authorize the `investment' of the surplus funds of a municipality in out-of-state banks or savings and loan associations. Section 166.261(6), F.S., provides that the provisions of s 166.261 are supplemental to any and all other laws relating to the legal investments of municipalities.
The 1981 Legislature enacted Ch. 81-285, Laws of Florida, creating the Florida Security for Public Deposits Act, codified as Ch.
`Qualified public depository' means any bank or savings association organized and existing under the laws of this state and any bank or savings association organized under the laws of the United States and having its principal place of business in this state, that meets all of the requirements of this chapter and that has been designated by the Treasurer as a qualified public depository.
Section
A certificate of deposit is simply written acknowledgement of a bank or a savings and loan association that it has received from a named person a specified sum of money as a deposit. The Random House Dictionary of the English Language 242 (Unabridged ed. 1967); Black's Law Dictionary 286 (Rev. ed. 1968); 14 C.J.S. Certificate pp. 111, 112; 9 C.J.S. Banks and Banking s 311; 12 C.J.S. Building and Loan Assoc. ss 74, 75.
The Florida Security for Public Deposits Act, Ch.
Section
An out-of-state bank or savings association, unless exempted from the requirements of Ch. 280, as amended by Ch. 83-122 or other general law, is not a qualified depository for any municipal funds or moneys and such funds or moneys are prohibited from being placed on deposit or held in any such nonqualified depository. This statutory direction or prohibition is, or is tantamount to, an express prohibition within the purview and for the purposes of s
QUESTION TWO
Subsection (1) of s 166.261, F.S., in relevant part provides: `Except when another procedure is prescribed by law or by ordinance as to particular funds, the governing body of each municipality shall, by resolutions to be adopted from time to time, invest and reinvest any surplus public funds . . . in [the Local Government Surplus Funds Trust Fund or in certain designated obligations or securities].' The first phrase of s 166.261(1), F.S., has raised doubt as to the legislative intent and the meaning of s 166.261, F.S., as enacted. Your inquiry suggests that in light of the language of the first phrase, `[e]xcept when another procedure is prescribed by law or by ordinance as toparticular funds,' (e.s.) and because s 166.261 does not expressly prohibit investments in commercial paper and bankers acceptances within the meaning of s
Section 166.261, F.S., was created by Ch. 77-394, Laws of Florida, which was `[an act] relating to public funds.' The title of the act in pertinent part states that s 166.261 was created for the purpose of `requiring . . . the governing bodies of municipalities . . . to invest surplus public funds in obligations of or obligations guaranteed by, the United States Government, or in the Local Government Surplus Funds Trust Fund' (e.s.) created by Ch. 77-394. Consistent with that expressed legislative intent and purpose, s 166.261, F.S., as created by s 4 of Ch. 77-394 provided:
Except when another procedure is prescribed by law or by ordinance as to particular funds, the governing body of each municipality shall, by resolution to be adopted from time to time, invest and reinvest any surplus public funds in its control or possession in the Local Government Surplus Funds Trust Fund as created by this act, or in negotiable direct obligations of, or obligations the principal and interest of which are unconditionally guaranteed by, the United States Government at the then prevailing market price for such security.
The provisions of present s 166.261(1)(a)(b), F.S., are substantially identical. Subsequently, Ch. 79-119 and Ch. 79-262, Laws of Florida, amended s 166.261 to add the investments now described in s 166.261(1)(c) and (d), F.S., to subsection (1) of s 166.261 as authorized alternative investments to investments in the Local Government Surplus Funds Trust Fund created by Ch. 77-394, now codified as s
Moreover, the legislative intent must be primarily determined from the language of the statute itself and not from conjecturealiunde, Maryland Casualty Co. v. Sutherland,
While s 166.261(1), F.S., does not in specific terms `expressly prohibit' these particular investments or `expressly preempt to the state' the legal investments of municipalities or their investments in commercial paper and bankers acceptances, the provisions of s 166.261(1) would seem to constitute a direct legislative direction and requirement, and is a limitation on the authority of municipalities to legally invest their surplus public funds in any deposit accounts, obligations and securities other than those listed in s 166.261(1), F.S. Therefore, any investments in any such unauthorized securities and any ordinance or resolution or other form of legislative action providing therefor would directly conflict with s 166.261(1) and must fail or yield to the statute under the doctrine of City of Miami Beach v. Rocio Corp., supra at 1069, which holds, inter alia, that `[o]ne impediment to constitutionally derived legislative powers of municipalities occurs when the municipality enacts ordinances which conflict with state law' and that `[m]unicipal ordinances are inferior to state law and must fail when conflict arises.' This rule would appear to apply and extend to the exercise of legislative power by resolution or any other form of legislative action by municipalities which conflicts with state law, such as s 166.261(1), F.S. Cf., State v. City of Sunrise, supra, at 1209, stating that `Legislative statutes are relevant [to municipalities constitutional home rule powers] only to determine limitations of authority.'
Based on the foregoing considerations and authorities and unless and until legislatively or judicially determined otherwise, I therefore must conclude that unless otherwise provided by law relating to and providing for the legal investments of municipalities, the governing body of a municipality is not empowered to invest or reinvest its surplus public funds in commercial paper and bankers acceptances, or in any other deposit accounts, obligations or securities other than those enumerated in s 166.261(1), F.S.
In summary, unless and until legislatively or judicially determined otherwise, I am of the opinion that:
(1) a municipality is not empowered to place or hold any municipal moneys in deposit accounts in the form of certificates of deposit in out-of-state banks and savings associations, or to make deposits in any depository, firm, association or corporation other than a qualified public depository as defined and provided for in Ch.
280 , F.S., as amended;(2) unless provided by law relating to and providing for the legal investments of municipalities, the governing body of a municipality is not empowered to invest or reinvest its surplus public funds in commercial paper and bankers acceptances, or in any other deposit accounts, obligations or securities other than those enumerated in s 166.261(1), F.S.
Sincerely,
Jim Smith, Attorney General
Prepared by: Anne Curtis Terry, Assistant Attorney General
State v. JRM , 388 So. 2d 1227 ( 1980 )
State v. City of Sunrise , 354 So. 2d 1206 ( 1978 )
Neal v. Bryant , 149 So. 2d 529 ( 1962 )
Thayer v. State , 335 So. 2d 815 ( 1976 )
Tatzel v. State , 356 So. 2d 787 ( 1978 )
Town of Indian River Shores v. Richey , 348 So. 2d 1 ( 1977 )
Cook v. Blazer Financial Services , 332 So. 2d 677 ( 1976 )
State v. Webb , 398 So. 2d 820 ( 1981 )
Foley v. State Ex Rel. Gordon , 50 So. 2d 179 ( 1951 )
State Ex Rel. Davis v. Knight , 98 Fla. 891 ( 1929 )
Pillans Smith Co., Inc. v. Lowe , 117 Fla. 249 ( 1934 )
Maryland Casualty Co. v. Sutherland , 125 Fla. 282 ( 1936 )
State Ex Rel. Hanbury v. Tunnicliffe , 98 Fla. 731 ( 1929 )
Gasson v. Gay , 49 So. 2d 525 ( 1950 )
Brooks v. Anastasia Mosquito Control District , 148 So. 2d 64 ( 1963 )
Mallard v. Tele-Trip Co. , 398 So. 2d 969 ( 1981 )
City of Miami Beach v. Rocio Corp. , 404 So. 2d 1066 ( 1981 )