AGO 1989-028.

• Case Date: March 07, 1989
• Court: Kansas

Kansas Attorney General Opinions 1989. AGO 1989-028. March 7, 1989ATTORNEY GENERAL OPINION NO. 89-28Greg A. Bengston Salina City Attorney 129 South 8th P.O. Box 380 Salina, Kansas 67402-0380 Re: Bonds and Warrants--Cash-Basis- Law--Creating Indebtedness in Excess of Funds Unlawful; Exceptions Synopsis: The cash-basis law, K.S.A. 10 -1101 et seq., forbids a municipality to incur a contractual indebtedness in excess of funds actually on hand in the municipality's treasury and budgeted for such indebtedness in any particular budget year. An irrevocable, non-recourse loan commitment or letter of credit issued to a city does not satisfy the requirement that sufficient funds be available in the city treasury to satisfy a contractual indebtedness. Cited herein: K.S.A. 10-1101; 10-1113; 10-1116. * * * Dear Mr. Bengtson: You request our interpretation of K.S.A. 13-1017. Specifically, you ask whether an irrevocable letter of credit or loan commitment issued to a city may satisfy the requirement that money be available in the city treasury to pay for a public improvement before it is commenced. K.S.A. 13-1017 prescribes the procedure under which cities of the first class may undertake public improvement projects. The statute provides, in part, as follows:

"Before any type of public improvements is [sic] commenced, the money to pay for the same must be available in the city treasury as provided by law or provision may be made for the

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