Request By:
Hon. James G. Tripp
Attorney at Law
P.O. Box 827
10 Court Street
Mt. Sterling, Kentucky 40353
Opinion
Opinion By: Steven L. Beshear, Attorney General; Walter C. Herdman, Asst. Deputy Attorney General
This is in response to your letter of August 15 in which you request a clarification of a statement contained in OAG 83-317 concerning the power of the Urban Renewal Agency to convey property, assign funds and delegate its authority to a private corporation for the purpose of redeveloping a building to be used as a community center which was a use included in the Urban Renewal Agency's development plan.
You further relate by way of background that within the Agency's area of operation a modern brick and steel structure is located, that was formally used as a high school gymnasium and later conveyed to a private individual. This structure, however, was deemed inconsistent with the area development plan and it was determined that it could be renovated for use as a community center. The Agency, pursuant to its eminent domain authority, acquired title to the building and in order to carry out its renovation plan for use as a community center, concluded that it could best be accomplished through a separate corporate entity. However, the Agency's authority to convey the building and assign funds as well as the Agency's personnel to accomplish this fact has been questioned as indicated in OAG 83-317. The Agency had further concluded that the fair cash value of this property for use as a community center is zero and therefore the Agency can convey the property for zero consideration to the corporation. Your basic question is as follows:
"Can the Urban Renewal Agency convey real and personal property and provide funds and technical services, including but not limited to use of the agency's property rehabilitation personnel and legal counsel, to such corporation?"
The Urban Renewal Agency has, of course, the power and authority to acquire whatever property is needed in order to carry out its redevelopment plan, and may dispose of such property in accordance to such plan at its fair value for uses in accordance with such plan pursuant to KRS 99.360(1)(d). KRS 99.450 further provides that prior to the sale of real property the Agency shall obtain appraisals made by independent appraisers of the value of the property based upon the new use established for the property though the Agency is not necessarily bound by the appraisal or appraisals that are made. This brings us to the question of the property's value for sale purposes before renovation. It is your position as mentioned above that the property has zero value. This would have to be determined, however, by the procedure outlined in KRS 99.450 through the property's appraisal by independent appraisers.
Concerning the basic question of the Agency's right to delegate its authority, we find nothing under the power and duty sections of the Agency as mentioned in OAG 83-317 and detailed in Chapter 99 KRS that authorizes such an agency established as an independent agency by the city under KRS 99.350, to delegate its authority to any private corporation. Under KRS 99.360(f) the agency alone is authorized to develop as building sites any real property within its operation. This can be done, of course, by contracting for the redevelopment of a site which, however, it continues to own and control. Such property can be temporarily leased during the redevelopment period under KRS 99.470 for private use. Also under KRS 99.450 private enterprises must be given the maximum opportunity through its own initiative in the redevelopment of the development area. However, this does not imply that the Agency can delegate its powers, duties and obligations under the act to redevelop property that it has acquired that envisions not only the conveyance of an unimproved site to a private corporation but also its funds, personnel, legal counsel, etc.
Referring to 1 Am. Jur., Admin. Law, Sec. 72, we find the following rule concerning the general limitations on the powers of an administrative agency, to wit:
"The powers of administrative agencies are measured and limited by the statutes or acts creating them or granting their powers, to those conferred expressly or by necessary or fair implication."
Next referring to 2 Am. Jur., Admin. Law, Sec. 222, the general rule regarding the power of an administrative agent or agency to delegate authority is expressed as follows:
"It is a general principle of law, expressed in the maxim 'delegatus non potest delegate, ' that a delegated power may not be further delegated by the person to whom such power is delegated, and that in all cases of delegated authority, where personal trust or confidence is reposed in the agent and especially where the exercise and application of the power is made subject to his judgment or discretion, the authority is purely personal and cannot be delegated to another unless there is a special power of substitution either express or necessarily implied."
Under the circumstances, we continue to have serious reservation as expressed in OAG 83-317 concerning the validity of the proposed delegation of the Agency's authority given to it under Chapter 99 KRS to the private non-profit corporation for the purpose referred to. However, in absence of any case in point, the matter would obviously be for the court to determine.