Untitled Texas Attorney General Opinion ( 1978 )

The Attorney General .of Texas
October 10, 1976
JOHN L. HILL
Attorney General
Honorable Joe Resweber Opinion No. l-I- 1254
County Attorney
1001Preston - Suite 634 Re: Consolidation of various
Houston, Texas 77002 funds and bank accounts of
Harris County and Harris County
Flood Control District.
Dear Mr. Resweber:
You have requested an opinion on the following questions which you
have submitted:
1. Can the proceeds from various County bond
issues be consolidated into one fund?
2. Can all the interest and redemption funds
created for the payment of interest on, and principal
~of, the various county bond issues be consolidated into
one fund?
3. Can all the money held by the County
pursuant to federal grants be consolidated into one
fund?
4. Can County funds (except interest and
redemption funds) derived from the County’s ad
valorem taxes be consolidated?
5. Is the County required to maintain a separate
bank account in the County depository for each of the
various county funds?
6. Can the proceeds from the various Harris
County Flood Control District bond issues be con-
solidated into one fund?
‘7. Is the Harris County Flood Control District
required to maintain a separate bank account in the
Harris County Flood Control District depository for
p. 4975
Honorable Joe Resweber - Page 2 (R-1254)
each of the various Harris County Flood Control District
funds?
Proceeds from the sale of bonds can be used only for the purpose for which
the bond issue states. Barrington v. Cokinos, 338 S.W.2d 133 (Tex. 1960); Attorney
General Opinion H-968 (1977). Therefore, if consolidation of bond proceeds into one
fund would result in improper use of the bond revenue, such consolidation would be
unlawful. Only if the bonds were issued for the same purpose could the proceeds
from their sale be consolidated into one fund.
An interest and sinking fund may be dispersed only for the purpose of paying
the interest or redeeming the bonds for which the fund was established. V.T.C.S.
art. 839; Attorney General Opinion M-841 (1971). Therefore, a consolidation of
these accounts would be impermissible if it would result in an improper use of the
fund.
The consolidation of federal grant money depends on the attendant rules and
regulations under which the grant was made. There is no state law which prohibits
consolidation of these moneys as a general matter. Thus, an answer to question
number 3 depends on the language and the purpose of each grant.
Except for taxes raised to retire public debt, which are assessed and collected
separately, ,‘(a]ny county may put all tax money collected by the county into one
general fund, without regard to the purpose or the source of each tax.” Tex. Const.
art. Vlll, S 9. Therefore, proceeds derived from the county’s ad valorem tax may be
consolidated. Attorney General Opinion H-194 (1974).
We find nothing in state law which would forbid the county from placing the
various county funds into one bank account so long as those funds which have a
limited purpose are segregated by the proper accounting procedures. SS Attorney
General Opinion M-975 (1971). The county is not required to maintam a separate
bank account for each fund. The county auditor has the authority to adopt
regulations regarding the accounting procedures used for county revenues. V.T.C.S.
arts. 1656, 1656a, 1657.
The Harris County Flood Control District may not consolidate funds derived
from bond issues if those issues were for different purposes. See Barrin on, supra.
However, the district may maintain its funds in one bank -+ account I proper
accounting procedures are used to insure that the various funds are used only for
their designated purposes. Attorney General Opinion M-975 (1971).
SUMMARY
Proceeds of various bond issues and interest and sinking
funds cannot be consolidated into one fund if the
consolidation would result in an improper use of the money.
p. 4976
ii f
Honorable Joe Resweber - Page 3 (H-1254)
Proceeds from a county’s ad valorem taxes may be
consolidated. Different county funds may be placed in a
single bank account if proper accounting procedures are
adopted to insure that the funds are utilized for the correct
purposes.
Attorney General of Texas
APPROVED:
Opinion Committee
jsn
p. 4977