Mississippi Advisory Opinions January 20, 1989: 19890120 (January 20, 1989)

Advisory Opinion Text

Mr. Richard E. Stratton, III

Stratton & Fairly

122 West Chickasaw

Brookhaven, Mississippi 39601

Re: Miss. Code Ann. § 21–27–45

Dear Mr. Stratton:

Attorney General Mike Moore has received your letter of request and has referred it to me for research and reply. In your letter you make the following inquiry:

The City of Brookhaven is contemplating the issuance of $4, 700, 000.00 water and sewer revenue bonds, and has considered retaining the services of a fiscal advisor or fiscal agent.

Section 21–27–45, ibid, authorizes such retaining only on issues of $5, 000, 000.00 or more and sets forth the applicable fee limits. On the other hand, Section 21–17–5, ibid, has no restriction with respect to fiscal advisors or fiscal agents. This latter statute, or ‘local rule’ statute, has been construed by some as overruling Section 21–27–45 and also providing no limitation on the bond amount to secure fiscal advisors and fee limitation.

Which statute is applicable and controls our situation and what fee can be contracted for with such a fisal advisor?

Miss. Code Ann. § 21–27–23 authorizes municipalities to issue revenue bonds and states that municipalities must follow the procedure set forth in § 21–27–45:

Any municipality is hereby authorized and empowered:

(a) To borrow money and to issue revenue bonds therefor solely for the purposes specified in this section and by the procedure provided in Sections 21–27–41 to 21–27–69.

Miss. Code Ann. § 21–27–45, which sets forth the details regarding municipal bonds and provides that municipalities may retain fiscal advisors in some cases, states in part:

On issues of five million dollars ($5, 000, 000.00) or more, the governing authorities of a municipality may retain the services of a fiscal advisor to assist in the sale of bonds hereunder and pay to such fiscal advisor a fee not to exceed the following amount: twenty-five thousand dollars ($25, 000.00) plus one-quarter of one percent (1/4 of 1%) of the amount of the issue in excess of five million dollars ($5, 000, 000.00). No such fiscal advisor shall be eligible to bid for or participate in the underwriting of the bonds for which he acted as advisor.

Miss. Code Ann. § 21–17–5 gives governing authorities of municipalities control over municipal affairs only in areas which are not already controlled by statute and further states that municipalities may not issue bonds of any kind unless specifically authorized by another statute, providing in part:

The governing authorities of every municipality of this state shall have the care, management and control of the municipal affairs and its property and finances, and shall have the power to adopt any orders, resolutions or ordinances with respect to such municipal affairs, property and finances for which no provision has been made by general law and which are not inconsistent with the Mississippi Constitution of 1890, the Mississippi Code of 1972, or any other statute or law of the State of Mississippi, and shall likewise have the power to alter, modify and repeal such orders, resolutions or ordinances. This section shall not authorize the governing authorities of a municipality to (a) levy taxes of any kind or increase the levy of any authorized tax, (b) issue bonds of any kind, (c) change the requirements, practices or procedures for municipal elections or establish any new elective office, (d) change the procedure for annexation of additional territory into the municipal boundaries, (e) change the structure or form of the municipal government, (f) permit the sale, manufacture, distribution, possession or transportation of alcoholic beverages, or (g) grant any donation; unless such actions are specifically authorized by another statute or law of the State of Mississippi.

Therefore, the City of Brookhaven must comply with the requirements of § 21–27–45 in issuing municipal revenue bonds, including the requirement that the city may retain a fiscal advisor only for bond issues of five million dollars ($5, 000, 000.00) or more and the requirement that the maximum fee for a fiscal advisor is twenty-five thousand dollars ($25, 000.00) plus one-quarter of one percent (1/4 of 1%) of the amount of the issue in excess of five million dollars ($5, 000, 000.00).

If we may be of any further assistance, please let us know.

Sincerely,

Mike Moore Attorney General.