Bd. of Ed. of Western Heights Independent School Dist. No. 41, Oklahoma County, In re, Application of

• Decision Date: 09 June 1977
• Docket Number: No. 50829,50829
• Citation: 565 P.2d 677
• Parties: In re APPLICATION OF BOARD OF EDUCATION OF WESTERN HEIGHTS INDEPENDENT SCHOOL DISTRICT NO. 41, OKLAHOMA COUNTY, Oklahoma, for Validation of $2,400,000 in School Building Bonds and Results of the Election Authorizing the Issuance Thereof.
• Court: Oklahoma Supreme Court

Page 677

565 P.2d 677

In re APPLICATION OF BOARD OF EDUCATION OF WESTERN HEIGHTS INDEPENDENT SCHOOL DISTRICT NO. 41, OKLAHOMA COUNTY Oklahoma, for Validation of $2,400,000 in School Building Bonds and Results of the Election Authorizing the Issuance Thereof.

No. 50829.

Supreme Court of Oklahoma.

June 9, 1977.

Floyd, Brandenburg & Rogers by Glenn E. Floyd and Lynn C. Rogers, Norman, for applicant, Board of Education of Western Heights Independent School District No. 41.

BARNES, Justice:

This is an original action in the form of an Application to Assume Original Jurisdiction and for the approval of $2,400,000 school bonds to be issued by Applicant, Board of Education of Western Heights Independent School District No. 41, Oklahoma County, Oklahoma, and for validation of the election authorizing issuance of said bonds.

Applicant Board is a public body and the governing board of the subject school district, whose members are duly qualified, elected, and acting, pursuant to 70 O.S.1971, §§ 1-115, 5-106, et seq. By resolution adopted December 6, 1976, Applicant authorized the calling and holding of an election in Independent School District No. 41 for the purpose of submitting to the qualified electors the question of the issuance of bonds to provide funds for the purpose of constructing two new buildings, a gymnasium and an auditorium.

Between December 6, 1976, and January 25, 1977, the issue was widely publicized in the community through newspaper articles, brochures distributed to voters and school patrons, articles in the newsletter of the Superintendent of Schools, and in various public meetings, explaining in detail the proposed new gymnasium and auditorium, their cost, the need for them, the method of financing, and soliciting voter approval.

The election was conducted January 25, 1977, after publication of the proclamation and notice of election and compliance with all other applicable provisions of Oklahoma law in effect prior to January 1, 1977. The question passed by a majority in excess of the required three-fifths, to-wit, by a vote of 502-51, amounting to approval by a 90.7 per cent majority of the votes cast in favor of issuance of the bonds and levying tax sufficient for their repayment.

Pursuant to the election, Applicant adopted a resolution authorizing the sale of the bonds and caused a notice of sale to be published as required by law. Applicant determined the lowest and best bid to be within required limits, and entered into a contract with the successful bidder, Guaranty Bank and Trust Company, Oklahoma City, Oklahoma, hereinafter referred to as "purchaser bank", upon the fulfillment of the terms as set out in the contract and bid for the purchase of said bonds. That contract was entered into contingent upon approval by the Attorney General and an opinion of legality by bond counsel for the purchaser bank.

Upon first examination of the transcript of bond proceedings, by attorneys for the purchaser bank, it was discovered and pointed out to Applicant that certain variations existed between the manner in which the election was conducted and provisions of the Oklahoma Bond Issue Proceeds Act, 62 O.S., § 571 et seq. (1976 Supp.). In the notice of election and in the proposition printed on the ballot, no specification was made that at least 70% of the proceeds would be used for certain named projects, nor were the specific projects set out with a dollar amount listed for each, as required by the Act.

The Oklahoma Bond Issue Proceeds Act became effective January 1, 1977, prior to the time of the election herein. The Act, by its terms, was intended to assure citizens that proceeds of bond issues approved by them will be expended only for the purposes or projects for which the issue was approved. Applicant's petition alleged its failure to follow the Act resulted from an omission to include in the notice and in the proposition printed on the ballot a specification that seventy per cent (70%) of the proceeds should be expended for a new gymnasium and an auditorium and a listing of the dollar amounts to be expended on each. The petition stated such variance was a result of inadvertence and oversight of the Applicant's attorney.

At a regular meeting held March 7, 1977, Applicant passed a resolution binding itself to expend at least 70% of the proceeds of the $2,400,000 bond issue for the construction of two school buildings at a cost of $1,200,000 each, and further binding itself to expend such bond proceeds in compliance with all the provisions of 62 O.S.1976 Supp., §§ 571-577.

Subsequent to execution of the bond purchase contract between Applicant and the purchaser bank, a transcript of the proceedings was submitted to the Attorney General's office. On April 1, 1977, the Attorney General, acting as Ex-Officio Bond Commissioner, certified the validity of the obligations as provided in 62 O.S.1971, §§ 11-14, which started the running of the 30-day period of contestability.

Attorneys for the purchaser bank have examined the transcript and have declined to accept the bonds as valid and legal because of variances from 62 O.S.1976 Supp., § 571 et seq., until this Court declares said securities to be lawful and valid obligations of Applicant School District No. 41.

Thus, Applicant asks this Court to assume original jurisdiction and determine the validity of the indebtedness and of the proceedings connected with the issuance of the bonds to assure prompt, lawful and proper acceptance of the bonds by the purchaser bank, and to eliminate the possibility of challenges to the validity on constitutional grounds, outside the scope of the incontestability statute.

Applicant first urges this Court to assume original jurisdiction of this matter under Article VII, Section 4, Oklahoma...