“Come and get your copiers” says the City Manager. “But we have a five year contract!” says the vendor. “Doesn’t matter” says City Manager ……………………
Texas Constitution: Prohibition of Committing Public Funds Past Current Fiscal Year
Section 271.903 of the Texas Local Government Code, Commitment of Current Revenue, retains to a political subdivision in this state the continuing right to terminate at the expiration of each budget period of the local government during the term of a contract, and such contracts must be a commitment of the local government’s current revenues only.
Attorney General Opinion DM-418 stipulates a political subdivision in this state may execute a contract for a longer period than twelve (12) months “if the contract contains either or both of the provisions described at Commitment of Current Revenue” in Section 271.903 of the Texas Local Government Code.
A contract that commits future funds without a provision to non-renew each successive fiscal year creates an un-constitutional debt.
