Request By:
Hon. J. Bruce Miller
Jefferson County Attorney
Twenty Seventh Floor
Citizens Plaza
Louisville, Kentucky 40202
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Charles W. Runyan, Asst. Deputy Attorney General
You raise two questions and request an opinion of this office with regard to the issues:
Question No. 1:
"Is it permissible under Kentucky Statutes for an appointed member of a Park Board to sell equipment to the Park Board from his private business without competitive bids? "
We assume you refer to a park and recreation system established pursuant to KRS 97.010 by the county. See specifically KRS 97.030. The board membership is a public office, the term being for four years. Under KRS 97.020 the board is empowered to maintain and equip the county park.
The fundamental rule was laid down in Commonwealth v. Withers, 266 Ky. 29, 98 S.W.2d 24 (1936), that he who is entrusted with the business of others cannot be permitted to make such business an object of profit to himself. The court said that "This is based upon principles of reason, of morality, and of public policy." In general, the disqualifying interest must be pecuniary or proprietary by which he stands to gain or lose something.
Thus, in this situation, the Park Board member is prohibited from selling equipment to the Park Board, even though the Board purchases the equipment through competitive bidding. It is assumed that he intends to make some profit on the sale.
Question No. 2:
"Is it permissible under the Kentucky Statutes for a county to lease a portion of its tobacco base which is owned by the county to individuals for $1.00 a year plus other consideration without competitive bids and without spelling out what is the other consideration?"
KRS 65.010, prior to its repeal (1980 Acts, Ch. 239, § 4, eff. July 15, 1980), provided that any county may sell and convey any real estate owned by it upon a determination by the Fiscal Court that the real estate is no longer needed to carry on county governmental functions or that other property is more suitable for county purposes than the property in question.
However, it is our opinion that the Fiscal Court of a county under the general and specific powers listed in KRS 67.080 and 67.083 may lease any of its land holdings to an individual or corporation upon terms deemed to be in the best interest of the county and for a rental determined to reflect a fair return to the county, based upon its appraisal by at least two competent appraisers. Specifically, KRS 67.080(1)(b) provides that the Fiscal Court may sell and convey any real estate belonging to the county. The Fiscal Court may appoint one (1) or more commissioners to sell county real estate under this subsection, subject to the approval of the Fiscal Court, and convey it to the purchaser under the direction of Fiscal Court. The Court, in Burns v. Moore, 307 Ky. 167, 209 S.W.2d 735 (1948) 737, concluded that the power to sell under KRS 67.080 includes the power to lease.
The sale or lease of county property to another does not come within the regulatory ambit of the bidding law, i.e., KRS 424.260 or KRS Chapter 45A, since the bidding principle applies to governmental acquisitions, but not where the government is the seller or lessor.
The lease, however, should spell out the precise consideration, since the Fiscal Court is required to disclose to the public the full details of its publicly conducted business. The essentials of the county's contract must not be left to speculation and mystery. There must be no coverup. A "public office" has been characterized as a "public trust. " City of Middlesboro v. Kentucky Utilities Co., 284 Ky. 833, 146 S.W.2d 48 (1940). The public trust requires an openness to the public in the handling of the county's business.