Clay v. Independent School District No. 1 of Tulsa County

1997 OK 13, 935 P.2d 294, 68 O.B.A.J. 559, 1997 Okla. LEXIS 15, 1997 WL 68230
CourtSupreme Court of Oklahoma
DecidedFebruary 18, 1997
Docket81882
StatusPublished
Cited by28 cases

This text of 1997 OK 13 (Clay v. Independent School District No. 1 of Tulsa County) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Clay v. Independent School District No. 1 of Tulsa County, 1997 OK 13, 935 P.2d 294, 68 O.B.A.J. 559, 1997 Okla. LEXIS 15, 1997 WL 68230 (Okla. 1997).

Opinions

SUMMERS, Justice.

A recently enacted statute requires the County Assessor to visually inspect and revalue real property for ad valorem taxation purposes. It provides for apportionment of the Assessor’s revaluation costs among the local recipients of the tax revenues. The defendants are three Tulsa County school districts who have not paid their share of the Assessor’s revaluation expense. The plaintiff is the Tulsa County Assessor, who wants them to do so. Must the school districts pay the Assessor, and if so what are the procedures the Assessor must use to get paid? We conclude that (1) the Assessor may use mandamus during the fiscal year to obtain payment from that year’s school budget, and (2) if the Assessor’s claims come after the end of the fiscal year the Assessor may get a judgment payable from the school’s sinking fund when the revaluation expense was included in the school district’s budget, and when the judgment complies with the Oklahoma Constitution and statutes for judgments against school districts. For reasons to be explained our holding is prospective in part.

The case was tried in the District Court of Tulsa County. The result was that the trial [298]*298court by way of mandamus ordered the school districts to pay their share. They appealed and the Court of Appeals affirmed. We have granted certiorari to resolve this matter of broad public concern.

I.

The statutes requiring the Assessor to conduct a program for the visual inspection of taxable real property in the county for the purpose of ad valorem taxes are 68 O.S.1991 §§ 2820, 2821. The annual budget of the Assessor’s office is submitted to the County Excise Board (or County Budget Board), and that board must make adequate provision for the costs of the inspection program. 68 O.S.Supp.1992 § 2822. The Assessor’s cost of this inspection program is apportioned among the various recipients of revenues from the mill rates levied, including the county, all cities and towns, all school districts, and all sinking funds of such recipients. 68 O.S.Supp.1992 § 2823(B). The Assessor renders a statement to each of the jurisdictions, including school districts, that are required to pay their proportionate cost. That statement must include “The current fiscal year in which the charge has been incorporated in the jurisdiction’s budget.” 68 O.S.Supp.1992 § 2823(D)(1).

The school districts seek to have the payments of the revaluation expense come from the sinking fund. The definition of a sinking fund is provided by 62 O.S.1991 § 331:

Fourth. All funds required to be provided by ad valorem tax levy to pay outstanding indebtedness created under authority of Section 26 and/or Section 27, Article 10, Constitution, are hereby declared to constitute the “Sinking Fund” of such county or other municipal subdivision, to be used for the payment of coupons, bonds, and judgments as provided by law.

Additionally, the sinking fund of a district “shall consist of all money derived from ad valorem taxes or otherwise as provided by law for the payment of bonds and judgments and interest thereon.” 70 O.S.1991 § 1-119.

For a school district to budget the revaluation cost to a sinking fund that cost must qualify as an outstanding indebtedness created under authority of Sections 26 and/or 27 of Article 10 of the Constitution, or to pay judgments, bonds, or interest thereon. Clearly, § 26 does not include the Assessor’s revaluation costs, since indebtedness created by § 26 requires a vote of the people for that purpose, and payment of the revaluation costs is not made by such an election.1 The same may be said for § 27 indebtedness created by a vote of the people at an election held for that purpose.2

Sinking funds are used to pay coupons, bonds, and judgments. 62 O.S.1991 § 331; 70 O.S.1991 § 1-119. The revaluation payment is not a coupon or bond.3 Neither is the revaluation payment a judgment, since a judgment is the final determination of the rights of the parties in an action. 12 O.S. 1991 § 681. In sum, a school district’s payment to the assessor for that district’s share of the revaluation expense is not of one of the statutorily allowed charges against a sinking fund, and cannot be included in the district’s budget as a charge against a sinking fund.

The school districts argue that the revaluation payments need not be budgeted and paid from the general funds of the districts as annual expenses. They contend that the un-budgeted payments may be paid from sink[299]*299ing funds if the districts allow judgments to be taken against the districts in the amounts of the payments. We disagree.

The statutory scheme indicates that school districts pay the revaluation expenses for a current fiscal year during that fiscal year. The revaluation expense for a particular year is incorporated into the budget of the school district for that year. 68 O.S.Supp.1992 § 2823(D)(1). When a jurisdiction’s budget and mill rate is not approved by a county Excise Board the billing statement does not conform to § 2823(D)(1), but must instead expressly state that the payments are “due and payable by December 31 of the current fiscal year.” Additionally, the statute states that the Assessor’s current year charges for the revaluation payments should equal the total visual inspection program’s budget for the current fiscal year. Id. at § 2823(D)(3).

We have explained that our State Constitution requires school districts “to carry on their operations upon a cash, or pay as you go plan.” School Dist. No. 2 v. Gossett, 140 Okla. 243, 283 P. 249, 252 (1929); Gentis v. Hunt, 121 Okla. 71, 247 P. 358 (1925). The school districts argue for a scheme where the school districts’ payments for a current fiscal year are shifted to payments on judgments in subsequent years.4 This would have the effect of shifting the Assessor’s funds to operate a current and annual revaluation program to a funding mechanism of more than one year in duration. Such a result contravenes both statute and the OHahoma Constitution as to the operation of both the school districts and the Assessor’s office.

II.

Our Constitution states that political subdivisions of the State must operate on a cash basis to prevent indebtedness extending beyond one year, unless the public has authorized the debt by an election held for that purpose. City of Del City v. Fraternal Order of Police, Lodge No. 114, 869 P.2d 309, 311 (Okla.1994). This provision applies to both school districts and a county assessor.5

In determining whether a particular obligation is a “debt” within the scope of § 26 this Court has looked to the nature of the obligation and the remedy to enforce the obligation.6 A statutory obligation allocating financial obligations between government entities is one that has historically been treated as one in assumpsit, or contract. Judicial enforcement of a statutory obligation capable of being reduced to certainty was by an action in assumpsit, i.e., contract, and the obligation was referred to as quasi-eontractu[300]*300al.7

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Bluebook (online)
1997 OK 13, 935 P.2d 294, 68 O.B.A.J. 559, 1997 Okla. LEXIS 15, 1997 WL 68230, Counsel Stack Legal Research, https://law.counselstack.com/opinion/clay-v-independent-school-district-no-1-of-tulsa-county-okla-1997.