AGO 85-27.

• Court: North Dakota

North Dakota Attorney General Opinions 1985. AGO 85-27. OPINION 85-27Date Issued: August 1, 1985 (AGO 85-27) Requested by: Honorable Philip Dolyniuk Mayor, City of Belfield

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QUESTION PRESENTED - Whether money in a special assessment fund for a street improvement district may be either transferred to the city's general fund or refunded to property owners in the special assessment district if a surplus exists after a city has retired refunding improvement bonds for a street improvement district. - ATTORNEY GENERAL'S OPINION - It is my opinion that money in a special assessment fund for a street improvement district may be either transferred to the city's general fund or refunded to property owners in the special assessment district if a surplus exists after a city has retired refunding improvement bonds for a street improvement district. - ANALYSIS - N.D.C.C. chapter 40-27 governs refunding improvement bonds. N.D.C.C. section 40-27-05 provides:

40-27-05. SPECIAL FUND FOR PAYMENT OF BONDS ISSUED FOR PURCHASE OF SPECIAL ASSESSMENT WARRANTS - TAX LEVY. The governing body of a municipality which issues bonds for the purchase of special assessment warrants shall create a special fund for the payment of the principal and interest of such bonds as they become due and shall credit to such a fund all special assessments collected for the payment of the special assessment warrants purchased. The governing body shall make a general tax levy annually on all the property in the municipality which, together with the special assessments collected, shall be sufficient to pay the principal and interest of the bonds when they become due. The levy imposed shall not be subject to any of the tax levy limitations imposed by section 57-15-08 or acts amendatory thereof. If any money remains in the special fund after the payment of the principal of all the bonds and the interest thereon, such balance may be transferred to the general fund. (Emphasis supplied).

Thus, in cases involving refunding improvement bonds, a city may transfer excess special assessment fund moneys to the general fund of the municipality. However, because the authority to transfer the moneys is discretionary and not mandatory, the question remains whether such moneys may be refunded to property owners within the special assessment district. A leading commentator on municipal...