10.04 Friends of the Pequot Lakes Library Request

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Page 3 of 3 future is not in question. The issue is the legal restrictions upon the City in receiving dollars from any source. Again, without express or implied statutory authority,cities do not have authority to appropriate or give away funds. In fact, the State attorney general, over many years, has considered the question of donating public funds to various groups and has found numerous such public expenditures to be improper unless statutory support can be identified for such expenditures.See A.G. Op.59-a-22(Dec.4, 1934). A last consideration in determining the validity of expenditures is that the attorney general has made a distinction between authority to spend money for a specific purpose and authority to give money to an organization generally committed to that purpose. For example, the attorney general said the authority to appropriate money for purposes of historical preservation permits a city to contract with a county historical society for specific services, but not to donate funds to the society to spend in its own discretion. Again, I have not been able to find any statutory support for the contemplated expenditure. There is, however, as stated above by the attorney general, one other option to consider. Cities can use their contracting powers to indirectly support nonprofits by entering into a service contract where the nonprofit would provide a specific authorized service for the city for which the nonprofit would receive payment for the services provided to the City. For example, contracting with a nonprofit organization to spend a Saturday cleaning up public grounds in exchange for payment of money. Thus, the contractual arrangement would be a service contract and the amount paid for the service would be commensurate with the services provided to the city by the nonprofit corporation. Under the facts presented here, structuring a proper and legal service contract with FOL to provide the City certain defined services may be difficult,since again, the expenditure of funds for the contract would have to be for a legal public purpose based on express or implied statutory authority in an amount equivalent to the service provided. Since there is one outstanding factual issue with this analysis identified above,please send us all documentation from the time the original payment was made by FOL to the City, which appears to be in approximately September 2015, including any City resolution accepting the gift/payment,so we can determine the terms applicable to the gift/payment as that may impact the analysis and conclusions mentioned above.