Pennsylvania Advisory Opinions February 25, 1924: AGO 66

Advisory Opinion Text

Indebtedness - Consent of Electors - Election - Increasing Amount Authorized - Limitations Fixed by Law - Insufficient Funds.

A school district board authorized at an election to increase the indebtedness of the district by $125,000 for the acquiring of additional ground and a new building and its equipment cannot expend more than this amount for such purposes without first obtaining the approval of the electors. To do otherwise would be a "'palpable breach of faith with the electors" and illegal.

Sir: The School District of the township of Robinson, Allegheny County, Pennsylvania, found it necessary to increase its bonded indebtedness in the sum of $125,000 for the purpose of "purchasing or acquiring sites of ground for public school buildings, and of erecting, equipping and furnishing a new school building on land to be acquired adjoining the present high school building site on Steubenville Pike, and a new school building located on the present site of the school building at Groveton, and on additional land to be acquired, and the enlarging, remodeling, equipping and furnishing of the present high school building on Steubenville Pike in said district."

On July 28, 1922 a resolution was duly passed by the corporate authorities of the said school district in which they signified and expressed their desire to increase-the indebtedness of said school district.

On August 25, 1922 a resolution was duly passed by the corporate authorities of said school district authorizing an election to be held on November 7, 1922 for the purpose of obtaining the assent of the electors of said school district to the increase of indebtedness. Legal notice of said election was given and the notice contained the amount of the proposed loan and. the purposes for which it was to be used. An election was held and upon the ballots furnished to the voters the purposes of the loan were also set forth. A majority of the voters of the school district voting at said election, voted in favor of the increase of indebtedness, and a resolution was passed by the proper authorities "that the bonded indebtedness of said school district of the township of Eobinson, County of Allegheny, Commonwealth of Pennsylvania, be and the same is hereby increased in the amount of $125,000 for the purpose or purposes above set forth."

It is now found that the sum fixed for the increase of indebtedness is not sufficient for the purposes set forth and the school authorities desire to borrow an additional sum of money for the same purpose or purposes under the 2% Constitutional limitation, without submitting the matter to the electors of the said school district to vote upon it.

The school authorities fixed the purpose or purposes for the increase of indebtedness when they expressed their desire for it. This was their right and their duty. Parr and Yocum v. Philadelphia, et al., 191 Pa. 438. Major vs. Aldan Borough, 209 Pa. 247 . They also fixed the amount to be spent for such purpose or purposes, and by that action they, are bound.

When the people voted to authorize the increase of the debt of the school district, the purposes for which the money was to be used were set forth. Anyone reading this would understand that the purposes were to be carried out for the amount of the increase of indebtedness, and not that -that amount would be for only part of the things set forth in the notice of election and on the ballot.

The question here involved is definitely settled in Naff v. Philadelphia, 256 Pa., 312 . In that case the City of Philadelphia submitted to its electors' the question of an increase of its indebtedness. Among the items embraced was one, "for the erection of a convention hall." It was found that the sum set aside for the erection of a hall was not sufficient. Another election was held for the purpose of having the electors pass upon the question of an additional increase in the City's indebtedness; and among the items' for which the debt was to be additionally increased was one, "toward the erection of a convention hall supplementing money borrowed under ordinance approved June 19, 1911." The election was in favor of the increase. Still the sums authorized by the elections' were not sufficient and the City authorities proposed to use money raised in another way to carry out one of the purposes for which the City's debt had been increased.

A Bill was filed to enjoin municipal authorities from entering into a contract or contracts on behalf of the City for the erection of a convention hall, the total cost of which would exceed the amount authorized by the electors to be borrowed. The bill avers "that the electors by their votes intended to and did limit the entire cost of the construction and erection of the convention hall to the sum of $1,520,000 which they authorized the City authorities to borrow and expend therefor; that the erection of a building at a greater cost than the said sum of $1,520,000 will be unlawful and in excess of the authority conferred by the electors of the City upon the municipal authorities, and that any contract or contracts of the City for the building of a hall, the total cost of which will be more than the fixed limit 'will be illegal, ultra vires, null and void.'"

It was held that the expenditure of any sum in excess of what was already borrowed or authorized to be borrowed in the erection of a convention hall would be illegal, and the Supreme Court said:

"Though, strictly speaking, the purpose of the increase of the municipality's indebtedness is for the municipal authorities, to whom the electors have delegated the power and authority to act for them, a vote in favor of the increase is an approval by the elector of the purpose for which the indebtedness is to be increased. His disapproval of that purpose would be followed by his vote against the increase. So after all, unless the electors approve the purpose of the increase of municipal indebtedness, it will not be authorized. When it is authorized by them, in approving the purpose for which the authorities have notified them it is needed, common honesty and fair dealing alike require that good faith be kept with them."

"The electors were thus distinctly told, when they voted for the second increase, that the $1,500,000 for which they first voted as the amount to be expended for the erection of a convention hall, needed supplementing to the amount of $20,000, and that the cost of the erection of the building would not exceed $1,520,000. After thus being authorized by the electors to expend $1,520,000 for the erection of the hall, the city authorities propose to enter into contract for its erection at a cost of $700,000 more. This is a palpable breach of faith with the electors. They have, a right to insist that what the city authorities so clearly gave them to understand was to be the cost of the hall when they cast their ballots in favor of the increase of the city indebtedness for that purpose, shall not now be ignored by those authorities, for who can say that they would have voted for the increases if they had known the convention hall was to cost hundreds of thousands of dollars more than the sum indicated in the ordinances and in the notices of the elections held in pursuance of them."

In the case under consideration the electors of the school district were distinctly told in the election notices and on the ballots when they voted what the purposes of the loan were and that the cost would not exceed $125,000. To further increase the indebtedness of the school district, without the assent of the electors, for the same purposes would be "a palpable breach of faith with the electors."

You are, therefore, advised that an increase in the indebtedness of said school district in any sum in excess of the $125,000 already borrowed to be used for the same purposes for which the $125,000 was borrowed, and without the assent of the electors, will be illegal.

Yours very truly, DEPARTMENT OF JUSTICE,

J. W. BROWN, Deputy Attorney General