Request By:
Hon. Hal Warren
Fulton County Attorney
P.O. Box 176
Fulton, Kentucky 42041
Opinion
Opinion By: Frederic J. Cowan, Attorney General; Gerard R. Gerhard, Assistant Attorney General
By letter of June 6, 1990 to Attorney General Cowan, you asked, in substance, (1) whether there is any prohibition on Fulton County entering into an arrangement under which a private firm (Diversified Municipal Services, Inc., "DMS") would construct, and lease to the county, to be operated by the county, "an eleven million dollar Detention Center ( Prison )" [emphasis] added] and, (2) whether this office could foresee any "additional liability on the part of the Magistrates and County Judge individually" [should the county enter into this project].
FINDINGS IN BRIEF
Long term housing of prisoners of the State of Kentucky is a function constitutionally mandated to the state. The role sought to be assumed by the county in housing not only state prisoners, but prisoners of jurisdictions outside Kentucky, is not provided for by statute and is not a function necessary for operation of the county. Accordingly, Fulton County may not lawfully lease and operate a 336 bed detention center or prison for such purpose.
FACTUAL BACKGROUND
You furnished for our review, an unexecuted copy of an instrument styled as an "Intent to Pursue a Lease. " That instrument indicates, in part, Fulton County's intent to lease a 336 unit detention center project, to be built by DMS. Plans and specifications, in accordance with the "Intent," are to be prepared by Everett I. Brown, Inc., an architect/engineer. Among other provisions, the instrument calls for development of a lease agreement, and a trust indenture, and provides that DMS shall provide lease/ purchase financing for a period of 21 years 6 months, and that rental payments will be $ 99,610.00 per month.
To gain further understanding of the project or arrangement you have asked about, the undersigned obtained and reviewed what are understood to be drafts of a Lease Agreement, a Trust Indenture, and a Preliminary Private Placement Memorandum, prepared by or at the direction of DMS. Counsel for DMS furnished a "Preliminary Private Placement Memorandum" related to McLean County, which appears substantially similar to that obtained by the undersigned regarding Fulton County. [By way of explanation, a "Preliminary Private Placement Memorandum" is a document used to explain the nature of a venture in which investment shares (termed "Participation Certificates") are being marketed. The project here involves an effort by DMS to see implemented a publicly-backed project, such that interest paid in connection with the project will be federal income tax exempt to investors who purchase "Participation Certificates."]
Project Description
The "project" is described in somewhat more detail in the Preliminary Private Placement Memorandum. The content of the Memorandum, is not part of the contract (Lease Agreement and Trust Indenture Agreement), and has no binding effect upon the Lessor or Lessee . At page 10 of the Preliminary Private Placement Memorandum regarding Fulton County, there appears the following project description:
The Project consists of a Detention Center for 336 prisoners to be constructed on a 15 acre site in the City of Hickman located in Fulton County, Kentucky, which will be classified as a medium security facility. The two story, tilt wall, concrete facility will contain approximately 69,000 square feet. The building will house 16 single occupancy cells, 16 double occupancy cells, and 24 dormitory sections housing 12 individuals as well as administrative offices, classrooms, gymnasium, kitchen, laundry, and miscellaneous related space, all for the use of the County of Fulton. The Project site is to be acquired with a portion of the Lease proceeds. The Project is expected to house low risk prisoners from the Commonwealth of Kentucky, Washington, D.C., the Federal Government, and any other political subdivision which contracts with Fulton County for such housing.
The Project will be fenced with a 12 foot chain link fence which will be topped with concertina type razor barbed wire. The building and site improvements will meet or exceed all Federal, State, and local building and fire codes for this type of occupancy as determined by the Kentucky Fire Marshal's department, and the American Institute of Architects guidelines for jail or prison construction.
[Emphasis added.]
The Preliminary Private Placement Memorandum indicates, in part, at page 29:
The County will operate the beds, under the auspices of the Fiscal Court and a Prison Commission (to be named ), hire local persons as staff, and eventually acquire ownership of the facilities. They will also engage professional management consultants to assist in the "start-up" phase of the project.
[Emphasis added.]
RESTATEMENT OF QUESTION PRESENTED
The key question involved here is whether Fulton County, already having a county jail which meets the basic law enforcement needs of the county, may, as an economic development, employment, or revenue generating measure, or combination thereof, enter into a lease-purchase contract with a private vendor, for a site and a 336 bed prison facility. The proposed prison would be operated separately from the county jail. As a means of covering costs of the project, the County would seek prisoners to house on a per diem fee basis from the State of Kentucky, Washington, D.C., and other jurisdictions outside Kentucky.
LEGAL ANALYSIS
COUNTIES MAY DO THAT WHICH IS EXPRESSLY AUTHORIZED
It has long been the law of this state that all power exercised by a fiscal court must be expressly delegated to it by statute. See for example, Fiscal
Court, Etc. v. City of Louisville, Ky., 559 S.W.2d 478 (1977), at 481.
There is no statute expressly delegating to the counties, authority to engage in a project or arrangement of the specific nature envisioned here. The statutes do not, for example, authorize counties to enter into a speculative detention center venture as an economic development, employment, or revenue generating measure. Further, no statute expressly authorizes a county to establish and operate a detention center or prison, as an activity separate from the county jail, or a regional jail, and statutes related thereto. Nor is there express delegation of authority to counties to enter into prisoner custody arrangements by contract with other states or jurisdictions in other states.
As we understand the proposal here involved, the "detention center" or "prison" will not be the county jail, or adjunct thereof, operated by the county and the county jailer under statutes specific to the county jail, for required housing of prisoners to support law enforcement in the county. Nor will it be a "regional jail, " operated by a regional jail authority, pursuant to KRS 441.800 et seq. It is envisioned as a separate entity operated through a "Prison Commission" (Cf. quote from Preliminary Private Placement Memorandum, supra, at page 3).
There simply is no express delegation of authority to the counties that would authorize a project or arrangement of the character here in question. Accordingly, in our view, Fulton County cannot enter into or implement the proposed project.
THE "HOME RULE" ACT AND CASEY COUNTY FISCAL COURT v. BURKE
Our attention has been called to the decision of the
Kentucky Supreme Court in Casey County Fiscal Court v. Burke, Ky., 743 S.W.2d 26 (1988), and to the "Home Rule Act" (KRS 67.083). It has been suggested that the Home Rule Act, coupled with the pronouncements of the Supreme Court in Casey County , give counties unlimited authority to act in connection with "functional areas" listed in subsection (3) of the Act.
We do not agree that such is the law of the Commonwealth.
The Home Rule Act
The "Home Rule Act, " codified at KRS 67.083, provides in part:
(1) It is the purpose of this section to provide counties as units of general purpose local government with the necessary latitude and flexibility to provide and finance various governmental services within those functional areas specified in subsection (3) of this section, while the general assembly retains full authority to prescribe and limit by statute local governmental activities when it deems such action necessary.
(2) The fiscal court of any county is hereby authorized to levy all taxes not in conflict with the Constitution and statutes of this state now or hereafter enacted.
(3) The fiscal court shall have the power to carry out governmental functions nesessary for the operation of the county . Except as otherwise provided by statute or the Kentucky Constitution , the fiscal court of any county may enact ordinances, issue regulations, levy taxes, issue bonds, appropriate funds and employ personnel in performance of the following public functions:
* * *
[Emphasis added.]
Two "functional areas" set out in KRS 67.083 (3) might be cited as claimed authority to implement the project or arrangement here in question. They are:
* * *
(e) Provision of corrections facilities and services , and programs for the confinement, care and rehabilitation of juvenile law offenders.
* * *
(x) Promotion of economic development of the county , directly or in cooperation with public or private agencies, including the provision of access roads, land and buildings, and promotion of tourism and conventions;
* * *
[Emphasis added.]
The scope of authorization afforded to counties to provide for "correctional facilities and services" (KRS 67.083 (3) (e)), and to promote economic development of the county (KRS 67.083 (3) (x)), must be judged in accordance with two considerations. The first consideration is whether the proposed action under such "functional area" is "necessary for the operation of the county," as required in KRS 67.083 (3). Entering into a project of the character involved here, in our view, clearly is not a "function necessary for the operation of the county."
It is not "necessary for the operation of Fulton County" that Fulton County develop resources necessary to reduce prison crowding that is recognized as a state or national problem . It is not "necessary for the operation of Fulton County" that Fulton County seek to address the "out-of-date character of much of the nation's cell stock." [Preliminary Private Placement Memorandum for Fulton County at page 24.] It is not necessary for the operation of Fulton County that it, as an economic development, employment, or revenue generating measure, seek prisoners of the State of Kentucky, or from other states or municipalities outside Kentucky, to house. [Cf. project description quotation from Preliminary Private Placement Memorandum, supra, page 3.]
In our view a county may not enter into the type of project or arrangement proposed since the project is not "necessary for the operation of the county."
The second consideration is whether the proposed action in connection with a given functional area is consistent with existing statutes (so as not to run counter to the direction in KRS 67.083(3) that a county may act "except as otherwise provided by statute or the Kentucky Constitution"). In our view, the proposed project is not consistent with either existing statutes, or the Constitution of Kentucky.
Regarding the "correctional facilities and services provision" (KRS 67.083(3)(e)), in general, our Constitution (§ 253, 254) and our statutes (KRS 67.080(2)(d); KRS 441.025; KRS Chapters 196 and 197) provide for two levels of incarceration of prisoners - in a locally operated facility for short term incarceration under certain conditions, and in a state facility for long term confinement in the penitentiary.
Two forms of county-level jails or correctional facilities are expressly provided for by our statutes - a county jail (67.080(2)(d), 441.025) operated by the county jailer (KRS 71.020), and a regional jail, operated under the aegis of a regional jail authority (KRS 441.800, et seq.).
There is no statutory provision authorizing a fiscal court to establish a "third type" of county administered facility, such as that proposed here, nor is there a body of law providing a fiscal court or its "prison commission" with the necessary authority of law to operate such a facility.
There is, for example, no statute comparable to KRS 196.610, establishing the Interstate Corrections Compact, and providing authority and procedures for the state to hold prisoners of other states, that a county could rely upon to underpin agreements or contracts to take or maintain custody of prisoners of other states, or, for that matter, local jurisdictions outside of Kentucky. Additionally, there is no comprehensive statutory scheme, comparable to that for "privatization" (KRS 197.500 to 197.525), that provides procedures or requirements for the type of project here in question. The project in question is an anomaly. It is outside the law.
Based upon both the Constitution of Kentucky and the statutes (e.g. KRS 532.100), our Supreme Court has recognized that even custody of state prisoners following their sentencing to the penitentiary is a state responsibility. See for example,
Campbell County v. Ky. Corrections Cabinet, Ky., 762 S.W.2d 6 (1988) at 9, where our Supreme Court stated in part:
We cannot transfer duties imposed upon state government to county government by legislation, by regulation, or by judicial action, even if such change would be beneficial.
Responsibility for confinement of prisoners sentenced to the penitentiary having been Constitutionally mandated to the state, the function may not be assumed by the counties. This is not to say that prisoners sentenced to the penitentiary may not be confined temporarily in county facilities under short term arrangements, but the proposal here, as we understand it, envisions relatively long term housing of those sentenced to the penitentiary, or, stated another way, assumption of the prison function by the county. Assumption of such responsibility by a county is not consistent with the mandate of our Constitution vis-a-vis prisoners who have been sentenced to the penitentiary, that such responsibility rests with the state.
Regarding the economic development provision (KRS 67.083(3)(x)), the fiscal court is authorized to promote economic development, but not to be the economic development. Further, the general language of the provision simply does not constitute an express authorization to engage in the type of project here involved. This is especially so in view of Constitutional and statutory provisions specific to correctional matters, that run counter to the project in question.
In our view the project in question may not be implemented because it is not necessary for operation of the county, and because handling of the types of prisoners envisioned under the project in question is "otherwise provided for" by statute and the Kentucky Constitution. Cf., KRS 67.083(3).
The Casey County Case
Our Supreme Court, in Casey County Fiscal Court v. Burke, Ky., 743 S.W.2d 26 (1988), interpreted KRS 67.083(2) (supra). The Court indicated, in substance, that where § 181 of Kentucky's Constitution expressly authorized the legislature to delegate to counties the authority to impose and collect license, franchise, and occupational taxes, and the legislature had subsequently passed legislation, without limitation, providing to any county the necessary latitude and flexibility to finance various governmental functions specified in KRS 67.083(3), no limitation on taxing authority granted would be implied. A limitation would be recognized only if there were an express restriction.
The Casey County case interpreted legislative language specific to a county's authority to tax (KRS 67.083(2)), where a constitutional provision (Constitution of Kentucky § 181) expressly authorized the general assembly to delegate such authority to the counties. The opinion does not overturn or modify the long recognized principle, restated in Fiscal
Court, Etc. v. City of Louisville, Ky., 559 S.W.2d 478 (1977), that all power exercised by a fiscal court must be expressly delegated to it by statute. The Court, in Casey County , found that the delegation of certain taxing authority authorized by the Constitution was an express delegation. The Court's remarks concerning an absence of express limitation were related to the specific enactment at issue in that case.
The Court in Casey County did not interpret the import of the listing of "functional areas" set out in KRS 67.083(3). It did not say that as long as a fiscal court acts in connection with one of the "functional areas" set out in 67.083(3), that a fiscal court's authority is unlimited.
Fulton County may not implement the project or arrangement here involved because: (1) statutory authorization for such a project is not present; (2) statutory authority the county would need is not provided; (3) the project would impose burdens upon the county that are not necessary for operation of the County; and (4) our Constitution and statutes "otherwise provide" for the housing of prisoners.
In our view, not only is Fulton County's entry into the project here involved not authorized by the Home Rule Act, it would be in contravention of that Act.
DMS'S COUNSEL'S MEMORANDUM
DMS's counsel forwarded to this office, by letter of August 21, 1990, a memorandum addressing whether a county may "own and operate a correctional facility . . . ." We believe our remarks above generally address points made in DMS' counsel's memorandum, except as to whether such project may be entered into under the Governmental Leasing Act (KRS 65.940 et seq.). That Act purports to establish certain general procedures related to financing of governmental projects. It does not provide substantive authorization for particular governmental projects, and does not constitute express authorization for a project of the nature here involved. While provisions of the Act might apply to the financing of a facility and equipment a county could properly procure, it has no application in relation to a project or contract not authorized by law. We believe Fulton County would be banned under § 162 of our Constitution from paying any claim under an agreement or contract for a project like that here involved, as there is no express authority of law for a county's entry into such endeavor.
CAN WE FORESEE ADDITIONAL LIABILITY ON THE PART OF THE MAGISTRATES AND COUNTY JUDGE EXECUTIVE [IF THIS PROPOSAL IS IMPLEMENTED ]?
We cannot predict actual liability. Suffice it to say, however, prisoners both individually, and as a group, have a substantial record for litigation. That the magistrates and county judge executive [and Fulton County] would face substantial costs and time associated with litigation with prisoners is virtually a given, should the project here involved be undertaken.
CONCLUSION
The project you have asked about involves not the mere leasing and operation of a detention center to meet the needs of the criminal justice system in Fulton County, but a program under which Fulton County would lease and operate a 336 bed "Detention Center (Prison) ." The County would assume responsibilities and functions associated with relatively long-term housing of state prisoners, and those from other states and local jurisdictions outside Kentucky. Because there is no express statutory authorization for a county to engage in a project of this nature, because the responsibilities and functions involved are not "necessary for the operation of the county," and because our statutes and Constitution "otherwise provide" for the handling of prisoners, in our view, Fulton County may not lawfully implement the project you have asked about.