Honorable Hugo Schnekloth

Office of the Attorney GeneralJuly 20, 1979

1979 Iowa Op. Atty. Gen. 309 (Iowa A.G.), 1979 WL 21027
Office of the Attorney General
State of Iowa
*1 Opinion No. 79-7-25
*1 July 20, 1979

*1 SALE OF SCHOOLHOUSE: Use of funds derived from sale of realty by school district to city within its jurisdiction. §§ 23.2, 23.18, 278.1(2), 278.2, 297.7, 297.22, 297.22(4), 297.25, 297.41, Code of Iowa, 1979. Sections 278.1(2) and 297.41 authorize separate methods by which school districts may dispose of property and allocate funds derived from disposition of property. (Hagen to Schnekloth, State Representative, 7/20/79)

*1 Honorable Hugo Schnekloth
*1 State Representative
*1 R. R. #1
*1 Eldridge, Iowa 52748
Dear Representative Schnekloth:
*1 You have asked for an opinion of the Attorney General concerning the meaning of statutes relating to the sale of property by a school district to a city within its jurisdiction. The factual situation which gave rise to your inquiry is summarized as follows:
*1 Arrangements have been made by the Clinton Community School District to sell the Baldwin School which it owns to the City of Clinton pursuant to the provisions of § 297.22, Code of Iowa, 1979. The City of Clinton is purchasing the property under the Community Development Block Grant Program as a site for a future elderly housing facility. The property to be transferred is located within the jurisdiction of both the school district and the city.
*1 Because of the language of § 278.1(2) and § 279.41, Code of Iowa, 1979, you ask the following questions:
*1 1. What kinds of sales of schoolhouses and schoolhouse sites does § 279.41, Code of Iowa, 1979 except from voter authorization under § 278.1(2)? Does § 279.41 apply only to acquisitions by another public body through eminent domain proceedings or substitutes therefor?
*1 2. Does sale of the property to the City of Clinton under the facts outlined above constitute a sale or other disposition within the scope of § 279.41, Code of Iowa, 1979 or is a vote authorizing the sale required under § 278.1(2), Code of Iowa, 1979?
*1 The sale is being accomplished pursuant to § 297.22(4), Fourth Unnumbered Paragraph, Code of Iowa, 1979, which provides in pertinent part as follows:
*1 The board of directors of any school corporation may sell, lease, exchange, give or grant and accept any interest in real property to, with or from any county, municipal corporation, school district or township if the real property is within the jurisdiction of both the grantor and grantee. The provisions of sections 297.15 to 297.20, sections 297.23 and 297.24, and the property value limitations and appraisal requirements of this section shall not apply to any such transaction between the aforesaid local units of government. [Emphasis supplied].
*1 It is our view that the transaction described in your letter and summarized above certainly falls within that Code section.
*1 You suggested the possibility of a conflict between the terms of § 278.1(2) and § 279.41, Code of Iowa, 1979. We do not believe a conflict between the two Code sections exists. Rather, they authorize separate methods for disposition of realty and separate decisional processes with respect to the use of the funds received therefrom. Section 279.41, Code of Iowa, 1979, provides as follows:
*2 Schoolhouses and sites sold—funds. Any fund received from the condemnation, sale, or other disposition for public purposes of schoolhouses, school sites or both schoolhouses and school sites may be deposited in the schoolhouse fund and may without a vote of the electorate be used for the purchase of school sites or the erection or repair of schoolhouses or both as ordered by the board of directors of such school district, provided, however, that the board shall comply with section 297.7. [Emphasis supplied].
*2 In response to your first question, part one and two, we believe that § 279.41, Code of Iowa, 1979 applies to acquisitions by a school district through the use of eminent domain procedures but it also applies to sales such as those authorized by § 297.22(4), paragraph 4, as set forth above. According to § 279.41, the governmental unit acquiring property from the school district must use it for a ‘public purpose’, but we know of no provision in Iowa law authorizing governmental units to acquire property for other than public purpose or benefit. The essential requirement of § 279.41 is that funds received from a transaction such as that in Clinton ‘may without a vote of the electorate be used for the purchase of school without a vote of the electorate be used for the purchase of school sites or the erection or repair of a schoolhouse or both . . .’
*2 Chapter 278, Code of Iowa, 1979, entitled Powers of Electors, provides in § 278.1(2) that the voters of the district at the regular (school) election shall have power to:
*2 Direct the sale, lease, or other disposition of any schoolhouse or site or other property belonging to the corporation, and the application to be made of the proceeds thereof, provided, however, that nothing herein shall be construed to prevent the sale, lease, exchange, gift or grant and acceptance of any interest in real or other property by the board of directors without an election to the extent authorized in section 297.22. [Emphasis supplied].
*2 As we understand that section, it is a much broader and more flexible power which resides in the electors of the school district than that held by the board of directors. The policy behind the distinction is the fundamental democratic principle that the electors are entitled to hold more power. The following section, § 278.2, Code of Iowa, 1979, permits the board to submit questions to the voters in its own discretion and requires submission of questions upon petition by a requisite number of voters. The power held by the board of directors pursuant to § 279.22 and § 279.41 is much more restricted. There is no relevant legislative history or judicial authority but, as we read the language of §§ 278.1 and 278.2, Code of Iowa, 1979, the voters could authorize the expenditure of funds derived from disposition of school property for any school purpose authorized by law and not just for school site or schoolhouse purposes. Thus, in a period of declining enrollments and school closings, the voters could decide to sell school property and allocate the funds to the operation of the school system.
*3 We find statutory support for our view that separate methods exist for disposition of school property and for the use of funds derived therefrom in § 297.25, Code of Iowa, 1979, which provides as follows:
*3 Rule of construction. Sections 297.22 to 297.24, inclusive, shall be construed as independent of the power vested in the electors by section 278.1, and as additional thereto. [Emphasis supplied].
*3 Finally, we take note that it is only section one of § 297.7, Code of Iowa, 1979, that applies to the transaction described in your inquiry. That section requires bidding procedures and hearings on contracts to spend in excess of $5,000 pursuant to § 23.2 and § 23.18, Code of Iowa, 1979, and consultation with the Department of Public Instruction's building consultant.
*3 In summary, it is our opinion that the answers to your questions are as follows:
*3 1. Section 279.41, Code of Iowa, 1979, permits sale of school district realty to other governmental units within its jurisdiction pursuant to § 297.22 and the funds derived from such a sale are allocated to the district's schoolhouse fund.
*3 2. Unless the school district board contemplates use of the funds derived from the transaction for purposes other than those authorized to be financed by the schoolhouse fund, a vote is not required.
Very truly yours,
*3 Howard O. Hagen
*3 Assistant Attorney General
1979 Iowa Op. Atty. Gen. 309 (Iowa A.G.), 1979 WL 21027
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