Request By:
Mr. Sam W. Arnold, III
Harrison County Attorney
16 East Pike Street
Cynthiana, Kentucky 41031
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
Harrison County, Kentucky received a large sum of money pursuant to the residuary clause of the Last Will and Testament of Flora Shropshire. The Circuit Court in Harrison County ordered the county to establish a separate checking and savings account with which to deposit funds received from said estate. The county was further directed by the court to establish and operate a humane society or building for the care of animals, birds, etc., as directed in her will.
The Fiscal Court of Harrison County now wishes to build an animal shelter for that purpose. See KRS 67.08/ and 67.083(3)(f). The money from the Flora Shropshire Estate will pay the entire cost of construction of the building. The building will be built with labor procured by the prime contractor. Cf. Cassady v. Board of Aldermen of Bowling Green, Ky., 277 S.W.2d 1 (1955), holding the prevailing wage statutes do not apply where the city went into the open market and directly employed skilled workers for the city project.
Question:
"Must the Harrison County Fiscal Court comply with KRS 337.510 and 337.512 and other applicable 'prevailing wage' laws where the county animal shelter would be entirely built and paid for from funds received from the Estate of Flora S. Shropshire."
Any revenue or money belonging to the county is necessarily considered to be county money, regardless of the source, taxes, license fees, donations, gifts, etc. Such money has to be paid into the county treasury by depositing such funds in a depository bank of the fiscal court's choice. See KRS 68.020, 67.080(1)(c) and (d) and (2) (a) and (b). A general rule provides that "municipal corporations, unless specially restrained, may take and hold property in their own right by direct gift, conveyance, or devise, in trust for purposes germane to the objects of the corporation, or which will promote, aid, or assist in carrying out or perfecting those objects." 56 Am.Jur.2d, Municipal Corporations, § 532, p.p. 589-590. See also 20 C.J.S., Counties, § 166, p. 995; 10 McQuillin, Municipal Corporations, § 28.16.
The answer to your question is that the fiscal court must comply with KRS 337.510 and 337.512 in this situation. Since there are no federal funds involved, the companion federal law would not apply. See 40 U.S.C. § 276a., et seq.; Twin Falls Const. Co. v. Operating Engineers Loc. #370, 95 Idaho 370, 509 P.2d 788 (1973) 791; and Tennessee Roadbuilders Ass'n v. Marshall, (U.S.D.C. M.D. Tenn., 1977) 446 F.Supp. 399, 401.
KRS 337.510(1) requires that before advertising for bids or entering into any contract for the construction of a public works, the applicable public authority shall notify the Department of Labor in writing of the specific public project to be constructed, and shall ascertain from the department the prevailing rates of wages for each classification of laborers, etc., for the class of work called for in the construction of such public works in the locality where the work is to be performed. This schedule of the prevailing rate of wages shall include a statement that it has been determined in accordance with the provisions of KRS 337.505 to 337.550 and shall be attached to and made part of the specifications for the work and shall be printed on the bidding blanks and made a part of every contract for the construction of public works. See subsection (2) of that statute for other pertinent details.
KRS 337.512 requires the public official authorized to construct the public works, prior to advertising for bids and starting construction, to ascertaion from the Kentucky Commissioner of Labor the prevailing rates of wages as provided in KRS 337.505 to 337.550. This means also that no member of fiscal court can vote for the award of any contract for the construction of the building, or vote for the disbursement of any funds involving the said construction, unless the fiscal court has first ascertained from the Commissioner of Labor the prevailing rates of wages, and the determination of the prevailing wages has been made a part of the proposed specifications and contract for such public works.
The statutes are clear on the point that the fiscal court is required to procure the schedule of prevailing wages from the Kentucky Commissioner of Labor prior to advertising for bids.
Under KRS 337.520(4), the wage rates to be used by the public authority in a contract for the construction of public works shall be the prevailing wage as of the date the public works project is advertised and offered for bid. The schedule or scale of prevailing wages shall be incorporated in and made a part of each contract.
In summary, since the building will have to be built with labor procured by a private and prime contractor, it is our opinion that: (1) the fiscal court must comply with the provisions of KRS 337.510 and 337.512; (2) since the advertisement for bids did not include the prevailing wage schedule of the Kentucky Commissioner of Labor, the fiscal court should reject all bids (no award has yet been made) and start over. By starting over, the fiscal court should see to it that prevailing wage schedule of the Commissioner is attached to and made part of the specifications for the work and is printed on the bidding blanks and subsequently made part of the final and awarding contract for such construction. Only by this approach, we think, can the bidding principle be properly followed and the purpose of the prevailing wage law be correctly carried out. See Cassady v. Board of Aldermen of the City of Bowling Green, Ky., 277 S.W.2d 1 (1955), in which the court wrote that the purpose of this legislation is to prevent contractors in the construction of public works enhancing their profits by exploiting the labor employed. The federal district court, as a related matter, in Tennessee Roadbuilders Ass'n v. Marshall, 446 F.Supp. 399, explained that the companion Davis-Bacon Act has for its purpose the protecting of employees of government contractors from substandard wages and insuring that local laborers and craftsmen not be precluded from work on government projects by the importation of cheap labor from distant sources.
It is clear that the fiscal court can reject all bids at this point for the simple reason that KRS 337.510 and 337.512 were not complied with. See 72 C.J.S., Supp., Public Contracts, § 15, p. 193. See also Weiner v. Cuyahoga Community College District, 19 Ohio St. 2d College District, 19 Ohio St. 35,249 N.E.2d 907 (1969), holding that the community college could reject the low bid where the bidder's response to the invitation for bids did not meet certain federal statutory requirements.