Can a Texas city change its budget without passing a new ordinance?

TX AG Opinion GA-0431: Must a city amend its budget by ordinance?

Plain-English summary

When a Texas city passes its annual budget as an ordinance, the question arises whether the city council can later tweak that budget with a quick resolution or motion, or whether it has to go through the full ordinance process again. A state representative, prompted by budget actions in the City of Seabrook, asked the Attorney General. The answer in 2006 was that a budget adopted by ordinance can be changed only by another ordinance.

The reasoning rests on a long-standing rule that a governing body may amend or repeal an ordinance only by an act of "equal dignity." Texas courts have applied that rule for over a century: a city cannot use a resolution, order, or motion to undo or change something it enacted by ordinance, whether that was a zoning ordinance, an office created by ordinance, or a grading ordinance. The same principle applies to a budget ordinance. So if Seabrook tried to amend its budget through acts of lesser formality than an ordinance, those attempts were without legal effect.

The opinion was careful about what it would not decide. The representative listed specific 2003 appropriations and asked whether they violated the budget statutes (Local Government Code sections 102.009 through 102.011) and the Seabrook charter. The Attorney General declined those questions. Whether an "emergency" existed under section 102.009, whether a change was for "municipal purposes" under section 102.010, and whether the city's charter was violated are all fact questions or charter-construction questions that the opinion process cannot resolve. The office answered only the legal question it could: amendments to a budget ordinance must themselves be ordinances.

Currency note

This opinion was issued in 2006. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Chapter 102 of the Local Government Code, which governs municipal budgets, has been amended since 2006, and individual city charters change over time. Anyone dealing with a municipal budget amendment today should check the current chapter 102 provisions and the city's current charter, not rely on this 2006 opinion's account of the statutes or the Seabrook charter.

Who this opinion affected (as of 2006)

City councils and governing bodies: The opinion told cities that a budget adopted by ordinance could be amended only by another ordinance, so a resolution, motion, or order purporting to change the budget had no effect.

Municipal budget officers and finance staff: The opinion described the chapter 102 framework, including that funds may be spent only in strict compliance with the adopted budget except in an emergency, and that the body may still make changes for municipal purposes.

Residents questioning a city's budget actions: The opinion explained that whether a particular appropriation actually violated the statutes or the charter was a fact-and-charter question the Attorney General would not answer, leaving that determination to a court.

Common questions

Can a city council amend its budget by resolution or motion?
No. According to the opinion, a budget adopted by ordinance can be amended only by another ordinance, an act of equal dignity, so a resolution, motion, or order does not work.

What happens to a budget change a city tried to make without an ordinance?
The opinion stated that to the extent the city attempted to amend its budget by acts of lesser dignity, those actions are without effect.

Could the Attorney General say whether Seabrook violated the law?
No. The opinion declined that question, explaining that whether specific laws or charter provisions were violated requires determining facts and construing the charter, both outside the opinion process.

Can a city ever change its budget after adoption?
Yes, through the proper process. The opinion noted that a governing body may spend only in strict compliance with the budget except in an emergency, and that even without an emergency it may make changes for municipal purposes, but any such amendment to a budget ordinance must be made by ordinance.

Background and statutory framework

Chapter 102 of the Local Government Code governs the municipal annual budget. A municipal budget officer (the mayor or city manager) prepares a budget each year, and once the governing body finally approves it, the city may spend funds "only in strict compliance with the budget, except in an emergency" (Tex. Loc. Gov't Code Ann. §§ 102.001, 102.002, 102.009(b) (Vernon 1999)). Section 102.009(c) defines an emergency as "a case of grave public necessity to meet an unusual and unforeseen condition that could not have been included in the original budget through the use of reasonably diligent thought and attention." Even without an emergency, the body may make "changes in the budget for municipal purposes" (id. § 102.010). If a municipality has charter provisions requiring an annual budget covering all expenditures and conducts a public hearing, those charter provisions control (id. § 102.011).

The Seabrook charter requires the governing body to adopt the annual budget "by ordinance." A municipal governing body may amend or repeal an ordinance only by an act of equal dignity (City of Hutchins v. Prasifka, 450 S.W.2d 829, 832 (Tex. 1970); City of San Antonio v. Micklejohn, 33 S.W. 735, 736 (Tex. 1895)). An ordinance may be amended or repealed only by another ordinance, not by a resolution, order, or motion lacking the same formality (Red Bird Vill. v. State ex rel. City of Duncanville, 385 S.W.2d 548, 550 (Tex. Civ. App.-Dallas 1965, writ ref'd); City of Panhandle v. Bickle, 31 S.W.2d 843, 846 (Tex. Civ. App.-Amarillo 1930, writ dism'd w.o.j.); City of Hutchins, 450 S.W.2d at 833; J.D. Abrams, Inc. v. Sebastian, 570 S.W.2d 81, 86 (Tex. Civ. App.-El Paso 1978, writ ref'd n.r.e.)). The opinion concluded the city may amend its budget ordinance only by adopting an ordinance, and that attempts to amend by lesser acts are without effect.

The opinion declined the requester's fact-specific questions. Whether an emergency existed under section 102.009 or a change was for municipal purposes under section 102.010 are fact questions an opinion cannot resolve, and the office does not construe city charters unless a charter provision raises a question of federal or state law (Tex. Att'y Gen. Op. Nos. GA-0156 (2004), GA-0356 (2005); Tex. Att'y Gen. LO-92-71). The opinion noted in a footnote that it found no judicial decision defining "municipal purposes" for section 102.010, citing Gardner v. City of Hamilton, 536 S.W.2d 422, 424 (Tex. Civ. App.-Waco 1976, writ ref'd n.r.e.) by analogy from an eminent-domain statute, and that it could not conclude section 102.010 would allow a city to amend its budget to spend beyond the appropriations in the previously passed annual budget.

Citations

Statutes:

• Tex. Loc. Gov't Code Ann. §§ 102.001, 102.002, 102.009, 102.010, 102.011 (Vernon 1999)

Cases:

• City of Hutchins v. Prasifka, 450 S.W.2d 829, 832 (Tex. 1970)
• City of San Antonio v. Micklejohn, 33 S.W. 735, 736 (Tex. 1895)
• Red Bird Vill. v. State ex rel. City of Duncanville, 385 S.W.2d 548, 550 (Tex. Civ. App.-Dallas 1965, writ ref'd)
• City of Panhandle v. Bickle, 31 S.W.2d 843, 846 (Tex. Civ. App.-Amarillo 1930, writ dism'd w.o.j.)
• J.D. Abrams, Inc. v. Sebastian, 570 S.W.2d 81, 86 (Tex. Civ. App.-El Paso 1978, writ ref'd n.r.e.)
• Gardner v. City of Hamilton, 536 S.W.2d 422, 424 (Tex. Civ. App.-Waco 1976, writ ref'd n.r.e.)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0431
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2006/ga0431.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain - the linked PDF is authoritative.

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT

May 18, 2006

The Honorable Robert E. Talton
Chair, Committee on Urban Affairs
Texas House of Representatives
Post Office Box 2910
Austin, Texas 78768-2910

Opinion No. GA-0431

Re: Whether a municipality that adopts its budget by ordinance must adopt budget amendments by ordinance (RQ-0414-GA)

Dear Representative Talton:

You ask whether in certain instances the City of Seabrook (the "City") amended its budget in a manner that is not consistent with applicable law.[1] You ask in particular whether a municipality that adopts its budget by ordinance must adopt any budget amendments by ordinance. See Request Letter, supra note 1, at 1. You also suggest that certain budget amendments may have been inconsistent with sections 102.009 through 102.011 of the Local Government Code and the City's charter. See id.; see also TEX. LOC. GOV'T CODE ANN. §§ 102.009-.011 (Vernon 1999). You list three specific instances when the City "apparently . . . did not [] act" to authorize the expenditure of funds in various amounts in accordance with law:

1) On May 20, 2003 in an amount of $80,000.

2) On June 17, 2003, the majority of Council attempt[ed] to correct [its] action of May 20, 2003 by declaring it an emergency without an ordinance.

3) . . . [O]n October 21, 2003 where an amount of $250,000. was appropriated and an additional $1,000,000. was added on November 4, 2003.

Request Letter, supra note 1, at 1. You understand that "no ordinances were proposed for any of these appropriations as well as being over the approved budget." Id. at 2. In addition, you state that the Seabrook charter provides "under Sections 5.21 a & b that any expenditure of $1,000,000. or more or 30% of the reserve fund must have the vote of the people except in a couple of emergency situations." Id.

Our analysis of the issues you raise is necessarily limited. Whether specific laws or charter provisions were violated in particular circumstances is a question requiring the determination of facts and is beyond the purview of the opinion process. See Tex. Att'y Gen. Op. No. GA-0156 (2004) at 6, 10 (stating that fact questions cannot be answered in the opinion process). Such a question also requires us to construe the charter with respect to the facts. "This office does not construe city charters unless the charter provision [at issue] raises a question of federal or state law." Tex. Att'y Gen. Op. No. GA-0356 (2005) at 2. Consequently, we consider only whether the City must amend its budget by ordinance, and we briefly outline what state law requires in the budget amendment context.

Chapter 102 of the Local Government Code governs the process by which a municipality adopts an annual budget. See TEX. LOC. GOV'T CODE ANN. § 102.002 (Vernon 1999) (requiring a municipal budget officer to prepare a budget each year "to cover the proposed expenditures for the succeeding year"); see also id. § 102.001 (designating the mayor or city manager as a municipality's budget officer). When a municipal governing body has finally approved the budget, it may spend municipal funds "only in strict compliance with the budget, except in an emergency." Id. § 102.009(b). Even in the absence of an emergency, however, a municipality may make "changes in the budget for municipal purposes." Id. § 102.010. Finally, in certain circumstances a municipality's charter prevails over chapter 102: "If a municipality has already adopted charter provisions that require the preparation of an annual budget covering all municipal expenditures and if the municipality conducts a public hearing on the budget . . . , the charter provisions control." Id. § 102.011.

The City's charter requires the governing body to adopt the annual budget "by ordinance." SEABROOK, TX, CHARTER art. V(A), § 5.03(e) (Aug. 11, 1979), available at http://www.municode.com/Resources/gateway.asp?pid=10298&sid=43 (last visited May 15, 2006). A municipal governing body may amend or repeal an ordinance only by an act of "equal dignity." City of Hutchins v. Prasifka, 450 S.W.2d 829, 832 (Tex. 1970); accord City of San Antonio v. Micklejohn, 33 S.W. 735, 736 (Tex. 1895); cf. Tex. Att'y Gen. Op. No. MW-0460 (1982) at 4 (stating that the legislature cannot repeal an existing statute except by following the same procedure by which the statute was adopted). An ordinance may be amended or repealed "only by another ordinance, not by resolution[,] or order[,] or motion" of the city council that is not passed and published with the same formality of an ordinance. Red Bird Vill. v. State ex rel. City of Duncanville, 385 S.W.2d 548, 550 (Tex. Civ. App.-Dallas 1965, writ ref'd); accord City of Panhandle v. Bickle, 31 S.W.2d 843, 846 (Tex. Civ. App.-Amarillo 1930, writ dism'd w.o.j.); see City of Hutchins, 450 S.W.2d at 833 (holding that a municipality could not amend a comprehensive zoning ordinance by resolution); City of San Antonio, 33 S.W. at 736 (holding that a city council cannot, by resolution, abolish an office created by ordinance); J.D. Abrams, Inc. v. Sebastian, 570 S.W.2d 81, 86 (Tex. Civ. App.-El Paso 1978, writ ref'd n.r.e.) (concluding that a city could not amend or abolish a grading ordinance by a "mere motion").

Accordingly, the City may amend its budget ordinance only by adopting an ordinance. To the extent the City attempted to amend its budget by acts of lesser dignity, its actions are without effect.

You further suggest that the City violated sections 102.009 through 102.011 of the Local Government Code. See Request Letter, supra note 1, at 1. After a municipal governing body has finally approved the annual budget, section 102.009(b) permits the governing body to spend funds only in "strict compliance with the budget, except in an emergency." TEX. LOC. GOV'T CODE ANN. § 102.009(b) (Vernon 1999). Section 102.009(c) effectively defines the term "emergency" as "a case of grave public necessity to meet an unusual and unforeseen condition that could not have been included in the original budget through the use of reasonably diligent thought and attention." Id. § 102.009(c). In addition, section 102.010 permits a municipal governing body to make "changes in the budget for municipal purposes."[2] Id. § 102.010.

"Whether an emergency within the meaning of section 102.009 exists or whether a budget amendment is for municipal purposes" within the meaning of section 102.010 are questions of fact that an attorney general opinion cannot resolve. Tex. Att'y Gen. LO-92-71, at 3-4; see also Tex. Att'y Gen. Op. No. GA-0156 (2004) at 6, 10 (stating that fact questions cannot be answered in the opinion process). We cannot, therefore, determine whether the three instances you listed complied with sections 102.009 and 102.010 of the Local Government Code.

Finally, as you suggest, under section 102.011 of the Local Government Code a city charter may supply procedural requirements in addition to those found in chapter 102. See TEX. LOC. GOV'T CODE ANN. § 102.011 (Vernon 1999). We cannot determine whether particular actions constituted a violation of a city charter. See Tex. Att'y Gen. Op. No. GA-0356 (2005) at 2 (stating that this office typically does not construe city charter provisions); Tex. Att'y Gen. Op. No. GA-0156 (2004) at 6, 10 (stating that fact questions cannot be answered in the opinion process).

SUMMARY

A municipality may amend an ordinance only by adopting an act of equal dignity. Thus a municipality that adopts its budget by ordinance may not amend the budget by adopting a resolution, motion, or order.

A municipal governing body may expend funds only in strict compliance with an adopted budget "except in an emergency." TEX. LOC. GOV'T CODE ANN. § 102.009(b) (Vernon 1999). Even in the absence of an emergency, however, a municipal governing body may change the budget "for municipal purposes." Id. § 102.010.

Very truly yours,

BARRY R. MCBEE
First Assistant Attorney General

ELLEN L. WITT
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Kymberly K. Oltrogge
Assistant Attorney General, Opinion Committee

Footnotes

1. See Letter from Honorable Robert E. Talton, Chair, Committee on Urban Affairs, Texas House of Representatives, to Honorable Greg Abbott, Attorney General of Texas (Nov. 9, 2005) (on file with the Opinion Committee, also available at http://www.oag.state.tx.us) [hereinafter Request Letter].

2. We cannot find any judicial decisions that discuss what constitutes "municipal purposes" for purposes of section 102.010. But see Gardner v. City of Hamilton, 536 S.W.2d 422, 424 (Tex. Civ. App.-Waco 1976, writ ref'd n.r.e.) (stating, for purposes of a statute authorizing municipalities to exercise the power of eminent domain to acquire land for municipal purposes, a municipal purpose is one that "promotes the comfort, convenience, safety, and happiness of the citizens of the municipality rather than the welfare of the general public"). Moreover, we cannot conclude from the face of the statute that section 102.010 would allow a municipality to amend its budget to spend funds that exceed the appropriations that were approved in the previously passed annual budget.