Request By:
Honorable Daugh K. White
Mayor
City Hall
Manchester, Kentucky 40962
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Walter C. Herdman, Assistant Deputy Attorney General
This is in response to your letter of September 1, in which you raise the question as to whether or not the City of Manchester, a city of the fourth class, has the right to sell city-owned property to a city employee and if so, what procedures are to be followed.
KRS 82.081 authorizes cities of all classes to dispose of its property, and reads as follows:
"Each city shall constitute a corporation, with capacity to sue and be sued, to contract and be contracted with, to acquire and dispose of property, and to have a common seal and change it at pleasure or act without a seal."
KRS 61.270 reads as follows:
"If any officer of a city of the fourth class becomes directly or indirectly interested as agent, principal or surety in any contract with the city, he shall thereby vacate his office, and the contract, if entered into while he is in office, shall be void."
The above statute prohibits any municipal officer in cities of the fourth class from becoming interested, directly or indirectly, in any contract with the city. This statute would prohibit an officer of the city from purchasing city property. See OAG 76-264. However, KRS 61.270 would not prohibit an employee from contracting with a city for the purchase of city property authorized to be disposed of by KRS 82.081. Therefore, we see no legal objection to a city employee purchasing city property provided such sale is openly and fairly conducted, which is a fundamental rule with respect to the sale of public property generally. Referring to McQuillin, Municipal Corporations, Volume 10, § 28.45, this general principle is so stated. In addition, it is pointed out that unless a municipal corporation is required to sell its property on a competitive bid basis, which it is not, under Kentucky law, a competitive bidding procedure need not be used. Nevertheless, we have suggested that all public property be disposed of either by competitive bidding or at public auction to the highest bidder in order to comply with the fundamental rule referred to above. See OAG 70-126, copy attached.