Kansas Attorney General Opinion 2011-012

July 25, 2011
ATTORNEY GENERAL OPINION NO. 2011- 012
Cheryl Whelan
General Counsel
Kansas State Department of Education
120 S.E. 10th Street
Topeka, Kansas 66612
Re: 	Constitution of the State of Kansas—Education—Local Public Schools;
Buildings; Remodeling or Renovation Costs of Building to be Leased or
Sold
Schools—School 	District 	Finance 	and 	Quality 	Performance—
Definitions; Funds; Operating Expenses; General Fund; Local Option
Budget; Use of Funds; Remodeling or Renovation Costs of Building to
be Leased or Sold
Schools—Capital Outlay Levy, Fund and Bonds—Capital Outlay Levy,
Use of Proceeds; Remodeling or Renovation Costs of Building to be
Leased or Sold
Synopsis: 	A unified school district may use proceeds from its general fund,
supplemental general fund and capital outlay fund to pay the costs of
remodeling or renovating a building that it intends to lease or sell to a
third party regardless whether the third party will use the building for
school district purposes. 	Cited herein: 	K.S.A. 2010 Supp. 19-101a;
K.S.A. 19-101b; 72-1033; 72-6405; K.S.A. 2010 Supp. 72-6409; 72-
6430; 72-6433; 72-8205; K.S.A. 72-8212; 72-8213b; 72-8225; K.S.A.
2010 Supp. 72-8801; K.S.A. 72-8804; Kan. Const., Art. 6, § 5; Kan.
Const., Art. 12, § 5.
Dear Ms. Whelan:
As general counsel for the Kansas State Department of Education, you ask whether
the board of education of a unified school district may use public funds from its
general 	fund, 	supplemental 	general 	fund, 	or 	capital 	outlay 	fund 	to 	finance

Cheryl Whelan
Page 2
the remodeling or renovating of a building that the board intends to lease or sell to a
third party which will use the building without regard to school district purposes.
Section 5 of Article 6 of the Kansas Constitution provides that "[l]ocal public schools
under the general supervision of the state board of education shall be maintained,
developed and operated by locally elected boards." 	Historically, a local board had
only such power and authority as was granted by the Legislature, either expressly or
by necessary implication.1 In 2003, however, the Legislature conferred upon local
boards limited home rule authority. 	A local board of education now has the authority
to "transact all school district business and adopt policies that the board deems
appropriate to perform its constitutional duty to maintain, develop and operate local
public schools," provided the board's actions are in "compliance with state law."2
While the home rule authority conferred upon a board is not as extensive as the
authority conferred upon a city3 or county4 in that a board may not exempt itself from
state law, the home rule authority is similar in allowing a board to supplement state
law when performing its duty to maintain, develop and operate local public schools.
The board of education of a unified school district has control of the school district
property, including the school buildings, school grounds and all structures erected
thereon.5 "The board of education of any school district, as lessee or lessor, may
enter into written contracts for the use of real or personal property. . . ." 6 The lease
may include provisions obligating the school district to pay costs of maintenance or
other expenses.7 In addition, the board of education may close any school building at
any time the board determines the closure improves the school system8 and may
dispose of school buildings and other properties no longer needed by the school
district "in such manner and upon such terms and conditions as the board deems to
be in the best interest of the school district." 9
General Fund and Local Option Budget
Procedures for establishing the general fund and the local option budget are included
in the School District Finance and Quality Performance Act. 10
1 NEA‐Wichita v. Unified School District No. 259, Sedgwick County, 234 Kan. 512, 517 (1983); Miller v. Board
of Education, Unified School District, No. 470, 12 Kan.App.2d 368, 373 (1987). See also Consolidated School
District No. 2 v. Johnson, 163 Kan. 202, 208 (1947) (school funds can be expended by the district board only
for purposes authorized by the statute either expressly or by necessary implication).
2 K.S.A. 2010 Supp. 72‐8205(e).
3 Kan. Const., Art. 12, § 5(c).
4 K.S.A. 2010 Supp. 19‐101a; K.S.A. 19‐101b.
5 K.S.A. 72‐1033. See also K.S.A. 72‐8212(d).
6 K.S.A. 72‐8225.
7 Id.
8 K.S.A. 72‐8213b(b).
9 K.S.A. 72‐8212(d).
10 K.S.A. 72‐6405 et seq.

Cheryl Whelan
Page 3
(a) 	"General fund" means the fund of a district from which operating
expenses are paid and in which is deposited the proceeds from the tax
levied under K.S.A. 72-6431, and amendments thereto, all amounts of
general state aid under this act, payments under K.S.A. 72-7105a, and
amendments thereto, payments of federal funds made available under
the provisions of title I of public law 874, except amounts received for
assistance in cases of major disaster and amounts received under the
low-rent housing program, and such other moneys as are provided by
law.
(b) 	"Operating expenses" means the total expenditures and lawful
transfers from the general fund of a district during a school year for all
purposes, except expenditures for the purposes specified in K.S.A. 72-
6430,11 and amendments thereto.12
By following the procedure set forth in K.S.A. 2010 Supp. 72-6433, the board of a
school district may adopt a local option budget. Funds raised through the local option
budget are deposited in the school district's "supplemental general fund" and "may be
expended 	for 	any 	purpose 	for 	which 	expenditures 	from 	the 	general 	fund 	are
authorized," except for "payments under any lease-purchase agreement involving the
acquisition of land or buildings which is entered into pursuant to the provisions of
K.S.A. 72-8225, and amendments thereto." 13
The school district has broad authority in determining the terms and conditions under
which a building is disposed. 	Modifying a building to meet the needs of a potential
lessee or purchaser is a legitimate term and condition of disposing of the building. If a
board determines that the best interest of the school district is served by remodeling
or renovating a building to make it more marketable, expenditures for the costs of the
remodeling or renovation may be construed as operating expenses of the district.
Such expenditures are not included among those exclusions listed in K.S.A. 2010
Supp. 	72-6430. 	Therefore, 	moneys 	held 	in 	the 	district's 	general 	fund 	and
supplemental general fund may be used to pay the costs of remodeling or renovating
a building that the board intends to lease or sell to a third party to the same extent that
such funds could be used to remodel or renovate a building that the board intends for
the district to continue to own.
Capital Outlay Levy
As prescribed in K.S.A. 2010 Supp. 72-8801, the board of education of a unified
school district may institute an annual capital outlay tax levy. Funds raisedthrough
11 "Operating expenses" does not include certain payments made to other school districts, maintenance of
student activities that are reimbursed, lawful expenditures from any other fund of a school district, costs of
educational services provided to pupils residing in designated facilities and payments for programs financed
in whole or part by federal funds. K.S.A. 2010 Supp. 72‐6430.
12 K.S.A. 2010 Supp. 72‐6409.
13 K.S.A. 2010 Supp. 72‐6433(j).

Cheryl Whelan
Page 4
the levy may be used "for the purpose of the acquisition, construction, reconstruction,
repair, remodeling, additions to, furnishing and equipping of buildings necessary for
school district purposes. . . ." 14 Clearly, a board may use such funds to reconstruct,
repair, or remodel a building that it intends to use as a school building or for other
school district purposes. 	We believe that the phrase "necessary for school district
purposes" encompasses those instances when the repair or remodeling is undertaken
to make the building marketable to a third party. The funds derived from the lease or
sale would be subject to statutory control and would be used, ultimately, in educating
pupils of the school district. 	Interpreting the phrase otherwise could result in
absurdity. 	Two school districts undertaking the same type of repair or remodeling on
buildings that are not used by the districts after the repair or remodel but rather are
leased or sold to third parties would be treated differently when one school district
predetermined the building is to be leased or sold to a third party; only the board of the
school district that originally intended to continue using the building would be allowed
to use capital outlay funds to cover the repair or remodeling costs. 	An even more
incomprehensible result occurs if during the repair or remodeling a school board
determines that it is more expedient to lease or sell the building. 	Interpreting K.S.A.
72-8804 as allowing capital outlay funds to be used to pay the costs of repairing or
remodeling a building only when the building will continue to be used by the school
district would require a school board to find another source of funding for any repair or
remodeling costs not paid prior to the board's determination. 	A statute should be
given a reasonable construction so as to avoid unreasonable or absurd results.15
Repairing or remodeling a building may be necessary for school district purposes
even when the intent of the school district is to lease or sell the building to a third
party. Capital outlay funds may be used to cover the costs of the repair or remodel.
Sincerely,
Derek Schmidt
Kansas Attorney General
Richard D. Smith
Assistant Attorney General
DS:AA:RDS:ke
14 K.S.A. 72‐8804 (emphasis added). See also K.S.A. 2010 Supp. 72‐8801.
15 Hayes Sight & Sound, Inc. v. ONEOK, Inc., 281 Kan. 1287, 1330 (2006).