December 15, 1983
Mr. Roger R. Gerlach
McCook County State's Attorney
Post Office Box 544
Salem, South Dakota 57078
Official Opinion No. 83-47
Contingency fund for a library budget
Dear Mr. Gerlach:
On behalf of the McCook County Commissioners, you have requested my opinion on the following factual situation:
FACTS:
The Hanson-McCook Regional Library Board has made a request to Hanson County and McCook County for the following funds:
A--Hanson County $11,100.00
B--McCook County $18,900.00
Total: $30,000.00
To date the Regional Library has the following reserves or accumulations:
A--Checking account balance as of June 7, 1983--$9,275.27
B--Money on interest--$35,886.93
Further, the annual budget for the Regional Library for the year 1983 is $30,000.00.
Based upon those facts you have asked the following questions:
QUESTIONS:
1. To what extent can the Library Board accumulate funds for capital replacement?
2. Does the Regional Library [Board] have the same restrictions on contingency fund accumulations as does a County or City and if not what restrictions does it have?
IN RE QUESTION NO. 1:
In Official Opinion No. 81-39, 1981-82 Attorney General Reports, page 95, I opined on the relationship between governing bodies and library boards in the establishment of annual budgets. While that opinion holds that library boards have the final authority to adopt a budget, that authority is restricted to those funds certified by the governing body to the library board in terms of funding for the entire budget. That opinion did not address specifically that part of the budget devoted to 'capital replacement.' SDCL 14-2-46 provides:
Any local governmental unit may establish a public library building fund and make appropriation to such fund. Any public library building funds established under previous law shall be continued and new appropriations may be made to them. If at any time a board of public library trustees ascertains that a building fund or a part thereof is not necessary, it may request its governing body to transfer all or any part of the fund to any other fund for the purpose of providing public library services or for purchase of public library materials and, upon receipt of such request, the governing body shall complete the requested transfer.
Based upon the foregoing statute, it is my opinion that insofar as the funds accumulated for what you refer to as 'capital replacement' deal with funds designated for a library building fund, such funds are not part of the Library Board's budget request but may be viewed as a recommendation by the Library Board to the governing body for deposits to be made into the fund established pursuant to § 14-2-46. In other words, funds accumulated for building replacement are an exception to the prohibition against line item vetoes by the governing board in the Library Board's budget request. The answer to Question 1 is that the Library Board cannot accumulate funds for the library building fund, but such funds may be established and appropriations made thereto by the governing board.
IN RE QUESTION NO. 2:
SDCL 7-21-18 provides:
On the second Tuesday in September in each fiscal year and after the annual budget for the following fiscal year has been approved and adopted, the board must compute and determine:
(1) The total amount of all appropriations contained in the budget for the next fiscal year, and payable out of each particular fund;
(2) The total amount of revenue, except taxes on real and personal property, likely to be received by each particular fund during the next fiscal year from all sources which includes the unobligated fund balance of each particular fund and excludes amounts authorized by law to be held in reserve;
(3) The difference between the total amount determined in subdivision (2) above, and the total amount determined in subdivision (1) above, and to the amount of such difference for each particular fund shall be added an amount equal to five percent of the total amount of all appropriations payable out of such fund during the next fiscal year and the total of such two amounts shall be the amount necessary to be raised for such fund during the next fiscal year by taxes on real and personal property.
In my opinion, the formula established in the statute set out above can be applied by the governing body to the funding request made by the Regional Library Board. In addition, any of the 'money on interest' you identify in the factual statement set out above that has been identified by the Library Board as a building fund should be credited to the fund established by SDCL 14-2-46. Those funds must then remain inviolate except upon a request by the library board as provided in the statute. My answer to Question No. 2, based upon the statutes and the reasoning in Blumer v. Beresford, 237 N.W.2d 655 (S.D. 1975), is that the Regional Library Board is subject to the same restrictions on contingency funding as is the governing body.
Respectfully submitted,
Mark V. Meierhenry
Attorney General
