January 22, 1980

Ms. Jacqueline Marousek 
Deputy City Attorney 
Belle Fourche, South Dakota 57717

Official Opinion No. 80-6

Limitations on the Expenditure of Money and the Registering of Warrants on Municipal Funds

Dear Ms. Marousek:

You have requested an official opinion from this office based on the following factual situation:

FACTS: 

A taxpayer representing a group of Belle Fourche residents met with the finance committee of the Belle Fourche City Council and stated that he believes the City to be presently in violation of SDCL 9-21-21 because warrants are being registered against the general fund pursuant to SDCL 9-23-4. 

The City of Belle Fourche has issued warrants for all ad valorem taxes appropriated, collected and credited to the general fund.  The city has also issued warrants for general fund moneys derived from funds other than the ad valorem tax levies such as liquor store receipts, licenses, mobile home taxes, lot and grave openings and so forth and has also registered warrants to pay the remaining bills against the general fund. 

The General Fund appropriation for the year 1979 and expenditures through June 1, 1979 were as follows:

$761,172  Total 1979 appropriation includes ad valorem tax levey and funds derived from other sources such as highway and bridge revenue, 10% of the motor vehicle collection, water and sewer, liquor store, licensing, fines and so forth.                                     

$311,832  Amount of total appropriation to be raised by ad valorem tax in 1979.   

$183,601  Ad valorem tax levy collected and deposited through June 1, 1979.     

$350,928  Total amount paid out against general fund ($183,601 was from ad valorem tax levy collected and deposited through June 1, 1979 and balance was from other sources such as highway and bridge revenue, 10% of motor vehicle, water and sewer, liquor store, license and so forth and the remaining balance was paid by registering warrants per SDCL 9-23-4).                        

Based upon the above factual situation, you have asked the following questions:

QUESTIONS: 

1.  Is SDCL 9-21-21 properly to be interpreted so as to preclude registering warrants under SDCL 9-23-4 in the above factual situation? 

2.  Is the unencumbered balance as per SDCL 9-21-24.1 remaining of an unexpended appropriation at the end of a current fiscal year the proper figure to be used to determine whether excessive warrants have been drawn against a fund under SDCL 9-21-21?

IN RE QUESTION NO. 1:

SDCL 9-21-21, when applied to the above facts, provides that no warrant is to be brawn on the general fund in excess of 95 percent of the tax levy made for the general fund appropriation supported by an ad valorem tax and all the cash in the treasury marked for the general fund from other revenue sources. In other words, warrants can be drawn on the general fund up to the total of 95 percent of $311,832 and of the money in the treasury credited to the general fund.  Since your letter fails to indicate the amount of money in the treasury credited to the general fund as of June 1, 1979, I am unable to answer your first question precisely.  If the total referred to in the preceding paragraph was less than the $350,928 for which warrants were drawn on the general fund through June 1, 1979, then the provisions of SDCL 9-21-21 were violated.  If this total was greater than the $350,928, then the warrants were legitimately drawn under SDCL 9-21-21.  If legitimately drawn, the warrants not paid upon presentation were correctly registered under SDCL 9-23-4.  See also Official Opinion No. 69-11.  This discussion has dealt only with the provisions of SDCL 9-21-21; the provisions of SDCL 9-21-22 must also be consulted in determining the propriety of drawing warrants.

IN RE QUESTION NO. 2:

As discussed above, SDCL 9-21-21 provides a formula to determine before a warrant is drawn if the warrant comes within the spending limit of the section.  This purpose of providing a predetermination of the legality of drawing a particular warrant is shown by the wording of SDCL 9-21-21, 'No warrant shall be drawn . . .'  Whereas SDCL 9-21-21 deals with a limitation on spending within a fiscal year, SDCL 9-21-24.1 deals with unexpended appropriations from one fiscal year to the next; therefore, the answer to your second question is no.

Respectfully submitted,

Mark V. Meierhenry
Attorney General