Request By:
Mr. William S. O'Daniel
Commissioner
Department for Local Government
909 Leawood Drive
Frankfort, Kentucky 40601
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
You raise several questions concerning joint projects of units of local government.
Question No. 1:
"Are all parties to an interlocal agreement required to have statutory authority to perform the service or function provided in the agreement? KRS 65.240 uses the word 'joint' or 'co-operative.' Does this language permit agreements between a city which possesses authority to perform a function and a special district which does not possess the authority?"
The Interlocal Cooperation Act [KRS65.210 to 65.300] envisions that governmental units may exercise certain powers jointly, provided each unit participating in the joint activity has the statutory authority to exercise such powers separately or unilaterally. Thus an interlocal agreement involving even one party which does not have the requisite statutory authority would render such contract null and void. Our view is buttressed by the fact of the rule of strict construction of municipal powers. A municipality [also a county] possesses only those powers expressly granted by the legislature or those necessarily implied and properly incident to the granted powers. City of Harrodsburg v. Southern Railway Company, Ky., 313 S.W.2d 864 (1958) 866.
Question No. 2:
"Does the Interlocal Cooperation Act permit one party to perform a service or operate a facility for other parties to the agreement? For example, a contract which provides for a county to provide garbage collection service for a fee to cities within the county and adjoining counties; or one which provides for a city to operate a sewage treatment plant for other cities?"
The purpose of the interlocal legislation is stated in KRS 65.220:
"It is the purpose of KRS 65.210 to 65.300 to permit local governmental units to make the most efficient use of their powers enabling them to cooperate with other localities on a basis of mutual advantage and thereby to provide services and facilities in a manner and pursuant to forms of governmental organization that will accord best with geographic, economic, population and other factors influencing the needs and development of local communities."
Since the act emphasizes cooperation between governmental units, and since the whole emphasis of the act is upon "joint or cooperative action", it is our opinion that by reasonable implication the legislation permits two major types of agreements: (1) The joint conduct by two or more governmental units of a particular function or joint operation of a particular governmental facility, and (2) The provision of governmental services on a contractual basis by one unit of government to one or more additional units. The first category just mentioned is the joint agreement. The second category is the cooperative agreement. Moreover, any literal language [such as joint action] suggesting something more restrictive than what we have concluded must necessarily surrender to the general scheme and purpose of the statutes, which stress cooperative agreements. Department of Revenue v. Miller, 303 Ky. 822, 199 S.W.2d 622 (1947) 623. (Emphasis added).
Question No. 3:
"Does the Interlocal Cooperation Act permit an agreement in which one party (city or county) provides administration or management of the services or facilities for other cities, counties, special districts or independent agencies (such as public housing authorities) without creation of a separate legal or administrative entity or joint board or administrator? Can the city or county administer the agreement through its own personnel such as a department head?"
Generally where either a joint or cooperative agreement is involved, it is our opinion that the agreement may provide for either a separate legal or administrative entity to conduct the undertaking or it may utilize the existing administrative machinery of one or more of the governmental units which are parties to the contract. See KRS 65.240(2) and 65.250(2). A municipality possesses only those powers expressly granted by the legislature, plus such powers as may be necessarily implied and properly incident to the granted powers. O'Bryan v. City of Louisville, Ky., 382 S.W.2d 386 (1964) 388. However, we believe KRS 65.240 and 65.250 are sufficiently broad to accomodate this management flexibility.
Question No. 4:
"If a city employee administers an agreement for provision of services or operation of a facility for other local governments or independent agencies, what, if any, problems of incompatible offices or conflict of interest exist?"
We are unable to respond to this general question. It is too abstract. See KRS 61.080. We can only deal with specifically proposed functions in order to apply the statutory and common law on this subject.
Question No. 5:
"If a separate legal or administrative agency is established to administer an interlocal agreement for the provision of a service, the operation of a facility or a joint undertaking, what are the requirements, if any, as to:
a. officers -- number and title, method of selection, term and compensation
b. necessary participants
c. representation of each participant
d. number and frequency of meetings of governing body
e. procedures and qualifications for voting
f. conditions under which additional political subdivisions may be included"
We are unable to suggest standards in this regard. This is something that must be worked out by the participating public agencies. KRS 65.250 mentions this in only a skeletal fashion. Matters concerning the constituency of the administrative agency, its general field of operations, and other allied administrative matters must be worked out in each case by the participating public agencies to their joint satisfaction.
Question No. 6:
"Is it permissible to charge a service fee performance of a service rendered by one political subdivision to another pursuant to an interlocal agreement? If so, what must the agreement contain as to determination of the amount, who shall pay, how enforced and the allocation of revenue from the joint or cooperative undertaking?"
KRS 65.250(1)(d) requires the precise manner of financing the joint or cooperative undertaking. The attorney general, in reviewing interlocal agreements pursuant to KRS 65.250, requires that from the face of the agreement the reviewer can readily determine the financial arrangements covering the joint or cooperative undertaking, including the matter of who pays for what in terms of exact dollars. An agreed reasonable service fee for performance of a service rendered by one unit to another would be permissible under the implied powers of the participating public agencies.
Because of the flexibility of the interlocal legislation in Chapter 65, we do not think it necessary to integrate KRS 79.110 to 79.180 with this opinion.