PUBLIC LANDS

Land acquired by a city pursuant to the Oklahoma Constitution, Article X, Section 27, for the purpose of constructing, expanding, or repairing the city's water system, may be sold by the city. The proceeds of the sale of property originally acquired pursuant to the Oklahoma Constitution, Article X, Section 27, must be used for the same purpose set forth in the ballot title of the bond issue, and cannot be used to purchase property for parks and recreational facilities. By an affirmative vote of the people, funds received from the sale of land originally acquired pursuant to the Oklahoma Constitution, Article X, Section 27, may be diverted to another public use. The Attorney General has considered your request for an opinion on the following facts: A city owns approximately 80 acres which was originally purchased to be implemented in the city water system due to the natural water springs existing on the land. The purchase of this property was financed by a bond issue, and such bond issue has since been retired. The property is no longer suitable nor necessary for its intended use. You then ask the following questions: "1. Since the property was intended and used for a 'public' use, may it be sold by the City? "2. May the proceeds from the sale of this property be used to purchase additional real property to be used primarily for parks and recreation? "3. If the answer to the second question is 'no', could the same be accomplished in an affirmative vote by the people?" We assume that the bond issue referred to was that authorized by Article X, Section 27 of the Oklahoma Constitution which provides in part: "Any incorporated city or town of this State may, by a majority of the qualified property tax paying voters of such city or town, voting at an election to be held for that purpose, be allowed to become indebted in a larger amount than that specified in section twenty-six, for the purpose of purchasing or constructing public utilities, or for repairing the same, to be owned exclusively by such city . . . ." In answer to your first question, there is no doubt that the property may be sold by the city. That a city can rightfully sell property purchased with money borrowed under Article X, Section 27, was recognized in Protest of Reid, 160 Okl. 3, 16 P.2d 995 (1932). The Reid case also provides an answer to your second question. There, the Court interpreted Section 27 in conjunction with Article X, Section 16 of the Oklahoma Constitution which provides: "All laws authorizing the borrowing of money by and on behalf of the State, county, or other political subdivision of the State, shall specify the purpose for which the money is to be used, and the money so borrowed shall be used for no other purpose." The Court, considering the two sections together, stated: "We, therefore, hold that the provisions of Article X, Sections 16 and 27, of the Constitution are applicable not only to the immediate use of the money borrowed, but to any subsequent use thereof . . . . When a municipal utility, which was purchased, constructed, or repaired with borrowed money, is converted into money by reason of a sale of the property, the proceeds of the sale are controlled by the provisions of Article X, Sections 16 and 27, of the Constitution, and may be used only for the purpose for which the money was borrowed. Where the proceeds of the sale are not used for the purpose for which the money was borrowed, they must be used to reimburse the taxpayers." The holding in Reid was re-affirmed in State ex rel. Grimes v. Board of Education of Oklahoma, 186 Okl. 665, 99 P.2d 876 (1940), but was modified to the extent that the funds received from such a sale had to be properly appropriated by the county excise board before they could be used. Thus, while Grimes clarified the Reid decision as to the procedural steps necessary to re-invest the proceeds from the sale of public lands acquired through a bond issue, the Court upheld its previous interpretation of the Oklahoma Constitution as set forth in Reid. It is clear then that the proceeds from the sale of land purchased by the city through the issuance of general obligation bonds under Article X, Section 27, must be used pursuant to the original purpose of the bond issue. The city is not authorized to use the proceeds to purchase real property to be used for parks and recreation. In answer to your third question, it appears that an affirmative vote of the people would make the funds available for the purchase of real property to be used for parks and recreation. Implicit in the Reid decision is the concept that if the voters were given the opportunity to decide how funds received from a sale of public utility lands were to be used, such funds could be properly diverted for the purpose other than that set forth in the original bond issue. The Court in Reid stated: "If the construction requested by the city officials were given, it would enable the municipal officers of the provisions of Article X, Section 27, of the Constitution, for the purpose of purchasing or constructing a public utility or for repairing the same, with the consent of the voters, to sell the public utility, and, without the consent of the voters, to use the proceeds of the sale for purposes other than those that are provided by that section and to defeat the limitations on the rate of ad valorem taxation contained in Article X, Section 9, of the Constitution." The alternative to using proceeds from the sale for the original intended purpose is to reimburse the taxpayers. This could be accomplished by placing the proceeds in the city's sinking fund to lessen the tax levy required by bonded indebtedness. It is reasonable to conclude that if the voters can exercise their self-taxing powers the requirement in Article X, Section 27 of the Constitution for voter approval to authorize the issuance of bonded indebtedness is met because the voters are, in effect, agreeing to tax themselves to retire the debt. To utilize the borrowed money for purposes other than that agreed upon by voter approval of the ballot title negates the authorization given at such election. It is apparent that the harm sought to be avoided is one of using funds acquired for a specific purpose agreed to by the people for a purpose for which they have not lent their approval. Were that to be allowed, the self-taxing power of the people would be abused. If, however, the voters voice an approval, there can be no such abuse of the self-taxing power. It is, therefore, the opinion of the Attorney General that your questions be answered as follows: (1) Land acquired by a city pursuant to the Oklahoma Constitution, Article X, Section 27, for the purpose of constructing, expanding, or repairing the city's water system, may be sold by the city. (2) The proceeds of the sale of property originally acquired pursuant to the Oklahoma Constitution, Article X, Section 27, must be used for the same purpose set forth in the ballot title of the bond issue, and cannot be used to purchase property for parks and recreational facilities. (3) By an affirmative vote of the people, funds received from the sale of land originally acquired pursuant to the Oklahoma Constitution, Article X, Section 27, may be diverted to another public use. (WM. DON KISER)