1. City officers and employees are specifically prohibited from spending for any purpose more than the city's Annual Budget appropriates for that purpose. KRS 91A.030
2. KRS 92.340 states any money expended in violation of budget limits and KRS 91A.030 may be recovered back by the city. The transaction is void. It might likely support an action on the officer's surety bond, or for personal liability. Generally, city officials act in a fiduciary capacity. It is not their money to do with as they wish.
4. KRS 522.030 - Official misconduct in the second degree.- Any unauthorized exercise of an official's function or a violation of any statute relating to his office is a Class B Misdemeanor.
Ignoring budget limits is very risky business for city officers, regardless of what the idiot City Attorney says.