Alabama Attorney General Opinion 1979-0127

LEE L. HALE DEPUTY ATTORNEY GENERAL WILLIAM M. BEKURS. JR. EXECUTIVE ASSISTANT JANIE NOBLES ADMINISTRATIVE ASSISTANT WALTER S. TURNER CHIEF ASSISTANT ATTORNEY GENERAL CHARLES A. GRADDICK ATTORNEY GENERAL STATE OF ALABAMA -*) rig- 00/Q7 ADMINISTRATIVE BUILDING SE NORTH UNION STREET MONTGOMERY. ALABAMA 36130 • AREA 41051. 528.5110 MAR 27 1 OFFICE OF THE ATTORNEY GENERAL Mr. Charles Whiddon, Chairman Houston County Commission Post Office Drawer 6406 Dothan, Alabama 36302 Counties - Houston - Public funds. Houston County Commission obli- gated to pay notes executed for certain public improvement; Dear Mr. Whiddon: Your request of February 23, 1979, together with attachments pertaining to payment of certain notes executed by Houston County Commission, has been received and researched. You have asked the following specific questions relating to the execution of road equipment notes, parking lot notes, and construction of farm center project note: "1. May the Commission lawfully authorize the expenditure of, and expend, funds of the County for payment of the principal of and the interest on the Road Equipment Note? 2. May the Commission lawfully authorize the expenditure of, and expend, funds of the County for payment of the principal of and the intereston each of the Parking Lot Notes? Mr. Charles Whiddon, Chairman Houston County Commission Page Two "3. May the Commission lawfully authorize the. expenditure of,and expend, funds of the County for payment of the principal of and the interest on the First 1973 Warrant? 4. May the Commission lawfully authorize the expenditure of, and expend, funds of the County for payment of the principal of and the interest on the Second 1973 Warrant?" It is the opinion of this office that the answer to each of your four questions is in the affirmative. The payment of all the notes described in your inquiry does not exceed the debt limitation as provided in Amendment No. 342 to the Constitution of Alabama of 1901 which limit shall not exceed five percent (5%) of the assessed value of the property in Houston County. The type of indebtedness here under consideration does not fall within the scope of Section 222 of the Constitution of Alabama of 1901 which requires an election by the qualified voters of a county before the issu- ance of any bonds by the county. It is recognized that parking facilities are a necessary ad- junct to any public building and are considered as a part of the structure to the extent that in the construction of build- ings the same is provided in the basement, top level, or other areas in the structure as well as parking decks and parking areas annexed to and made a part of the facility or structure. This office, as well as the courts, has recognized the neces- sity of providing parking space in the ordinary course of business. Code of Alabama 1975, SS11-14-4, 11-14-7, and 11-14-10 autho- rize and direct county governing bodies to erect county build- Mr. Charles Whiddon, Chairman Houston County Commission Page Three ings and keep them in order and exercise all necessary contracts for that purpose: counties are also authOrized to pay for the cost of improvements in installments at interest costs not greater than six percent (6%) per annum, and may, if necessary, levy a special tax for the purpose of such contract. The Supreme Court of Alabama has ruled that fire-fighting equipment and also transportation equipment for forestry protection may be purchased on an installment basis secured by promissory notes inasmuch as such type of indebtedness and security does not come within the purview of said Section 222. (Ensley Motor Car Co. v. O t Rear, 196 Ala. 481, 71 So. 704; Town of Linden v. American-LaFrance, 232 Ala. 167, 167 So. 548). It is the further opinion of this office that that part of the money derived from execution of the notes which was used for the construction of a farm center building is to be treated in the same capacity as the funds used for the road equipment and the parking facilities. The securities issued by the Houston County Commission that are described as warrants are merely notes and not warrants within the meaning of the statute limiting the execution of same as is provided in Code of Alabama 1975, S11-8-10. War- rants are orders on the county treasurer or depository to pay while notes are unconditional promises to pay. (Littlejohn v. Littlejohn, 195 Ala. 614, 71 So. 448). The nature of an obligation such as that here considered is determined by its content, not by what it is called. This office is aware of the fact that these notes here consi- dered have been executed and that some of them have been paid as they became due, that the money was advanced in good faith, and that there is no evidence of any collusion or fraud con- nected with the execution thereof; also that it is recognized CHARLES A. GRADDICK Attorney General by- hOL., Ran Liirie Assistant Attorney General Mr. Charles Whiddon, Chairman Houston County Commission Page Four that the lending parties may file a claim against the county in the event of non-payment, therefore, in recognition of all the principles of law herein considered and the practi- cal application of the borrowing, the use of the funds and the obligation for repayment, the Houston County Commission may, and should, authorize the expenditure of, and expend, funds of the county for payment of the principal of and the interest on each of the indebtednesses herein considered. Sincerely, RGL:cd