Selected Best Practices For Municipal Lawyers

Selected Best Practices

For Municipal Lawyers

(Or Things We Wish We Could Always Remember)

G. K

D

& E

P. S

CUNNINGHAM, VOGEL & ROST, P.C.

legal counselors to local government

333 S. Kirkwood Road, Suite 300 St. Louis, Missouri 63122

314.446.0800

kim@municipalfirm.com; erin@municipalfirm.com www.municipalfirm.com

Missouri

Municipal

Attorneys

Association

July 12, 2015

Presented by:

Kimberley Diamond and Erin Seele

Cunningham, Vogel & Rost, P.C.

legal counselors to local government

333 S. Kirkwood Road, Suite 300 St. Louis, Missouri 63122

314.446.0800

kim@municipalfirm.com; erin@municipalfirm.com www.municipalfirm.com

DON’T PAY FILING FEES

•

A Government attorney is exempt from

paying filing fees on new Missouri state

cases when e-filing

 "Government attorney," a lawyer … using the electronic

filing system … as a lawyer for the state of Missouri or one of its political subdivisions.” Mo. Court Operating Rule 27.02(b)

STATUTES THAT REQUIRE

PAYMENT OF TAXES

•

Subdivision Plat:

 § 445.030 – cannot be recorded “until all taxes against the same shall have been paid”

•

Participate in an Election:

 § 115.342/115.306? (SB104) – disqualified from participating in election for which the candidate has filed if delinquent in

payment of any state income taxes, personal property taxes, municipal taxes, real property taxes on the place of

residence…

•

Elected or Appointed to Office:

 §§ 77.380, 79.250 – “. . . No person shall be elected or appointed to any office who shall at the time be in arrears for any unpaid city taxes, or forfeiture or defalcation in office. . . .”

REFUND OF TAXES PAID TO CITY?

•

City has no authority to refund absent express statute

 See Mo.-Am. Water Co. v. Collector of St. Charles County, 103 S.W.3d

266, 270 (Mo. App. 2003) (“Taxes voluntarily although erroneously

paid…cannot be refunded absent statutory authority.”) (emphasis

added)

•

Must pay under protest or no refund of taxes

 Adams v. Friganza, 344 S.W.3d 240, 248 (Mo. App. 2011) (“Taxpayers who fail to protest property taxes under Section 139.031 providing for payment of taxes under protest cannot obtain refunds.”) (emphasis

added);

 See § 139.031 RSMo. for mandatory procedures

• Remind cities to remember to remove money out of escrow

•

Protest payment does not apply to refund of sales tax.

CITY INDEMNIFICATION

OF PRIVATE PARTIES?

•

Violate the constitution?



Cannot pay private debts – funds spent only for public

purpose – [Article 6, § 23; Article 6, § 25]

•

Use Attorney General Opinion 138-87 – to indemnify

would improperly waive sovereign immunity:



“To agree to the underlined terms [defend, indemnify,

and hold harmless], is to waive the state’s sovereign

immunity, ... Only the legislature can waive this

immunity.”

CONTRACT REMINDERS

•

§ 432.070 Mandatory Compliance

•

E-Verify -

§ 285.530



Required for City contracts over

$5000 for services

•

Proof of Lawful Presence - § 208.009



Required at the time of application for any

“local public benefit”

•

“any grant, contract, or loan provided by … local

government”

WHEN MUST CITY

COMPETITIVELY BID?

•

No general statute requirement, but there are

exceptions:

 Construction Management Services – § 8.679

 Health and Life Insurance for Employees – § 67.150

 Construction of Initial Waterworks – § 91.170

 City Depository Services (3rd class cities) – § 95.280  Insurance contracts – § 376.696

 Contracts with City Officials and Employees over $500/transaction or

$5000/year – §§ 105.454/.458

 Architectural, Engineering or Land Surveying Services (list of 3 on file) – § 8.291  Federal and State Grants – specific grant provisions and applicable law

 Public works contracts? – § 290.250 (no, but see statutory confusion)

BID ORDINANCE – BEST PRACTICES

•

Flexibility is the key.

•

Suggestions for purchasing ordinances:

 Authorize city to accept bids, reject bids or to negotiate and

modify bids, where appropriate;

 Broad discretion in awarding bid

 Authorize city to waive technical deficiencies in bid; and  Allow City to waive bidding altogether, where appropriate:

 Emergency

 Single-source provider  Participation in co-op  Other – good cause

NO STANDING FOR

UNSUCCESSFUL BIDDER

•

Byrne and Jones Enterprises, Inc. vs. Monroe City R-1

School District, ED101588 (Nov., 12, 2014)

Transferred to Mo. S.C. in February

 Because of School District’s right to reject any and all bids,

“rejection of a bid … creates no vested interest or property

right in the rejected bidder.”

 Bidding is designed “for the benefit and protection of

public, not bidders.”

 “Awarding the unsuccessful bidder bid-preparation costs,

when taken to its logical conclusion, serves only to hurt, not protect, the public. … We thus hold that the unsuccessful

MUNICIPAL ETHICS REMINDERS

• There are 3 main statutes describing prohibited transactions (§105.452; §105.454; §105.458 RSMo.) which generally provide that no appointed or elected official or employee shall:

 Sell, rent or lease any property, or provide services, to the City in excess of $500 per

transaction or $5,000 per year unless competitively bid and provided the bid is the lowest

received;

 Use or disclose confidential information with intent to result in financial gain for himself, his spouse, his dependent child, or any business within which he is associated;

 Use decision making authority for the purpose of obtaining financial gain which materially enriches himself, his spouse or dependent children;

 Perform any service, act or refrain from acting or attempt to influence a decision by reason

of any payment, offer to pay, promise to pay or receipt of anything of actual pecuniary

value;

 Favorably act on any matter that is so specifically designed so as to provide a special

monetary benefit.

 Perform any service for consideration one year after termination if such performance is to

influence a decision to influence a decision

• CONSTITUTION: Art VII, Section 6 - prohibits any public officer or employee from

hiring or naming any relative (of the 4th _{degree) to any public office, board or}

employment

RELY ON POLICE POWERS AS SOURCE

OF POWER WHEN POSSIBLE

• Engelage et al. v. City of Warrenton, 378 S.W.3d 410 (Mo. App.

E.D. 2012) – county, like schools and other political

subdivisions, are obligated to comply with city Building Codes and pay corresponding city permit fees

 “police powers of a city generally extend to all within its boundaries” and citing prior authority to find that “political

subdivisions should be subject to a municipality’s police power”

• City police powers preempted only if statute "expressly and specifically [gives] full duty to attend to these responsibilities”

ANNEXATION REMINDERS

•

HB 511 (2015) – Creates new exception to Boundary

Commission Review (St. Louis County only):

 “Any annexation of property … approved by majority of property owners residing thereon and by ordinance of any municipality that is a service provider of both water and sanitary sewer within the municipality shall be effective as provided in the annexation ordinance” without commission review. (§ 72.401)

•

Verified petition no longer required

 Fact petition was not verified or notarized will not affect validity of an annexation

•

Roads - Only fee simple owners’ signatures required on

petition

 St. Louis County v. Peerless Park, 726 S.W.2d 405, 410 (E.D. Mo. 1987)(“the area can include

real property not covered by a fee interest, such as public property. No signature on the

petition is required…”)

•

Trash services needed in annexed area?

 2 year notice required if annexing or expanding solid waste collection services into area being served (§ 260.247)

REQUIRED NOTICE?

•

§ 610.020 – 24 hours public notice for general business

§ 67.110/137.055 – (property taxes)-

hearing, with at least 7 days notice and published in

qualifying newspaper OR in 3 public places within the City;

•

§ 89.050 –15 days

hearing notice requirement for zoning

regulations, restrictions or boundary changes

• § 67.2725 – requires 4 days notice before any vote to:

 Implement a tax increase, OR

 With respect to retail development projects, to:

o utilize the power of eminent domain;

o create a transportation development district; o create a community improvement district; OR

o approve a redevelopment plan that pledges public funds

ORDINANCE REQUIREMENT

REMINDERS

•

Ayes and nays required – void if not recorded as roll call

•

Label ordinance “bill” – (advisable)

•

Check to see if clerk:



Forgot the effective date clause



Changed ordaining clause from exact words of

statute



Failed to have signed by “presiding officer” if a 3

class city (use two signature lines to avoid problem)



Failed to have attested by village clerk

ORDINANCE VS. RESOLUTION

•

Ordinance:

 Legislative act that continues until repealed

•

Resolution:

 Usually deals with matters of a special or temporary

character

 Mere expression of the opinion or mind.... not a law  Will not suffice when action is required to be taken by

ordinance

ORDINANCE REQUIRED WHEN?

•

Sample of laws requiring ordinance:

 Approval of plat (§ 445.030)

 Change Name of Street or Avenue (§ 77.220)

 Approval of intergovernmental agreement (§§ 70.220; 70.230)

 Approval of agreement between city and elected or

appointed official of another city (§§ 70.220; 70.230)

 Compensation, appointment, and duties of 3rd _{and 4}th _class

city employees generally (§§ 79.230, special legal counsel, 79.270, compensation all officers, 79.290, duties generally, 77.042 & 77.044,

administrator, 77.480, officials generally)

 Provide that Bonds should be issued (§ 77.180, third class cities; 95.370, fourth class cities)

 Require Building and Repairing of Sidewalks (§88.710, fourth class cities)

DETERMINE INVESTMENT

AUTHORITY FOR CITY FUNDS

•

All cities have power to deposit funds in selected

depositary banks – See §110.010, RSMo.

•

Demand or time deposits are ok

•

Caution for 3

and 4

class cities – Questionable

statutory authority for investing funds – See §§95.280,

95.355

•

Charter cities may invest if authorized by charter and

ordinance – See MO Constitution Article VI, Sect. 19

•

If city has investment authority, then city should adopt

ESTABLISH FINANCIAL POLICY AND

REQUIRE BANKING CONTRACTS

•

Financial policy is advisable

• RFP to select bank • Bank Qualifications

• Collateralization of deposits in excess of FDIC insurance • Different from Investment Policy

•

Required contracts:

• Depositary Agreement with Bank

• Collateral pledge/custodial agreement with third party

FINANCED PROPERTY INVOLVED …

THINK FIRST…

• BE CAREFUL WITH WHAT CITY DOES WITH PROPERTY THAT HAS

BOND-FINANCING

 For example, more than a de minimis portion of bond - financed

property generally may not be used for any private business use or arrangement with a private entity (including the federal

government). See 26 U.S.C. §141.

 Examples of activities that may affect bonds’ tax-exempt status or

other bond transaction requirements include entering into a management contract for the facilities, leasing out a portion of the facilities, or encumbering the bond-financed property and/or property used as collateral

SEGREGATE BOND FUNDS

Avoid commingling bond funds with other city funds

•

Bond funds must be kept separate and not

commingled with other city funds.

§108.180, RSMo.

•

Violation of this statute is a misdemeanor,

punishable by fine and/or imprisonment.

CAREFUL PREPARING PROPERTY

DESCRIPTIONS

SB809 Effective August 28, 2014 restricts ability of

lawyers to prepare property descriptions:

•

Amended Section 327.272.1(3):“Property

descriptions” establishing boundary lines must be

prepared by licensed surveyors.

•

Surveyor licensing board stated it will enforce as to

property descriptions in recorded instruments

conveying fee simple and permanent easements.

•

Impacts preparation of deeds for rights of way –

indicates city must have surveyor prepare

descriptions.

For More Information Visit Our Website:

www.municipalfirm.com

or contact us at

333 S. Kirkwood Road, Suite 300

St. Louis, Missouri 63122

314.446.0800

kim@municipalfirm.com

erin@municipalfirm.com

These materials and the related presentation are intended for discussion purposes and to provide those attending the meeting with useful ideas and guidance on the topics and issues covered. The materials and the comments of the presenters do not constitute, and should not be treated as, legal advice regarding the use of any particular technique, device, or suggestion, or its legal advantages or disadvantages. Although we have made every effort to ensure the accuracy of these materials and the presentation, neither the attorneys presenting at this meeting nor Cunningham, Vogel & Rost, P.C. assume any responsibility for any individual’s reliance on the written or oral information presented.