Request By:
Mr. Michael L. Collins
Administrator
Taylor County Hospital
Campbellsville, Kentucky 42718
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Thomas R. Emerson, Assistant Attorney General
This is in reply to your letter requesting an opinion from this office as to whether a hospital established by a Hospital District Authority pursuant to KRS 216.310 to 216.360 is required to publicly bid. You cannot determine from those statutes if such bidding is required but you state that according to KRS 424.260 a hospital so established may be required to bid items in excess of $2500. Your facility is owned by a holding corporation and leased to the district which consists of district board members appointed by the fiscal court.
As you have noted, KRS 216.310 to 216.360 deal with hospital districts. The methods of establishing such a district are set forth in KRS 216.317 and 216.318. KRS 216.320 provides in part that a hospital district is a taxing district within the meaning of section 157 of the Kentucky Constitution. Hospital district board members are appointed by the fiscal court (KRS 216.323) and the board shall be a body corporate (KRS 216.333). The government of the hospital district shall be vested in the board which shall have general control of the property and affairs of the district and shall have all the powers necessary to carry out the purposes of the act, including the power to lease existing hospitals and equipment and pay such rental therefor as the board may deem proper, KRS 216.335(5). KRS 216.350 states that the administrator shall be the chief administrative officer of a hospital district. He shall be responsible to the board; he shall carry out the board's orders and he shall conduct the affairs of the district according to law.
KRS 424.260, as amended by the 1978 regular session of the Kentucky General Assembly, effective June 17, 1978, provides:
"Except where a statute specifically fixes a larger sum as the minimum for a requirement of advertisement for bids, no city, county or district, or board or commission of a city or county, may make a contract, lease, or other agreement for materials, supplies except perishable meat, fish, and vegetables, equipment or for contractual services other than professional, involving an expenditure of more than five thousand dollars ($5,000) without first making newspaper advertisement for bids. Provided, however, That this requirement shall not apply in an emergency if the chief executive officer of such city, county or district has duly certified that an emergency exists, and has filed a copy of such certificate with the chief financial officer of such city, county, or district."
This requirement for competitive bidding, unless it meets the "emergency" exception, is mandatory and nonobservance renders the contract void. See Board of Education of Floyd County v. Hall, Ky., 353 S.W.2d 194 (1962) and McQuillin Mun. Corp., Vol. 10, § 29.30.
Thus, in our opinion, where a hospital district has been organized pursuant to KRS 216.310 to 216.360, the hospital district board, in which the governing power of the district has been vested, is required by statute to advertise for bids in the newspaper where the amount of the expenditure involved exceeds $5,000 and where an emergency does not exist and professional services or perishables are not involved.