Selected Best Practices For Municipal Lawyers

Transcription

1 Selected Best Practices For Municipal Lawyers (Or Things We Wish We Could Always Remember) G. KIMBERLEY DIAMOND & ERIN P. SEELE CUNNINGHAM, VOGEL & ROST, P.C. legal counselors to local government 333 S. Kirkwood Road, Suite 300 St. Louis, Missouri

2 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

3 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)

4 STATUTES THAT REQUIRE PAYMENT OF TAXES Subdivision Plat: cannot be recorded until all taxes against the same shall have been paid Participate in an Election: / ? (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: , 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....

5 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 providing for payment of taxes under protest cannot obtain refunds. ) (emphasis added); See RSMo. for mandatory procedures Remind cities to remember to remove money out of escrow Protest payment does not apply to refund of sales tax. See RSMo. (Generally, can file refund claim to Director of Revenue within 3 years from date of overpayment)

6 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 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.

7 CONTRACT REMINDERS Mandatory Compliance E-Verify Required for City contracts over $5000 for services Proof of Lawful Presence Required at the time of application for any local public benefit any grant, contract, or loan provided by local government Best Practice: require copy of driver s license

8 WHEN MUST CITY COMPETITIVELY BID? No general statute requirement, but there are exceptions: Construction Management Services Health and Life Insurance for Employees Construction of Initial Waterworks City Depository Services (3rd class cities) Insurance contracts Contracts with City Officials and Employees over $500/transaction or $5000/year /.458 Architectural, Engineering or Land Surveying Services (list of 3 on file) Federal and State Grants specific grant provisions and applicable law Public works contracts? (no, but see statutory confusion) Local ordinance dictates other situations

9 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

10 NO STANDING FOR UNSUCCESSFUL BIDDER Byrne and Jones Enterprises, Inc. vs. Monroe City R-1 School District, ED (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 bidder may not recover its bid-preparation costs.

11 MUNICIPAL ETHICS REMINDERS There are 3 main statutes describing prohibited transactions ( ; ; 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 4 th degree) to any public office, board or employment COMMON LAW: Incompatible Offices 2-prong test - case by case determination

12 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 to another

13 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. ( ) Verified petition no longer required ( , )(2013) Notarized petition will now suffice; and 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 ( )

14 REQUIRED NOTICE? hours public notice for general business / (property taxes)- Must have public hearing, with at least 7 days notice and published in qualifying newspaper OR in 3 public places within the City; days hearing notice requirement for zoning regulations, restrictions or boundary changes 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 o create a community improvement district; OR approve a redevelopment plan that pledges public funds as financing

15 ORDINANCE REQUIREMENT REMINDERS Ayes and nays required void if not recorded as roll call Label ordinance bill (advisable) Check to see if clerk: Forgottheeffectivedateclause Changed ordaining clause from exact words of statute Failed to have signed by presiding officer if a 3 rd class city (use two signature lines to avoid problem) Failed to have attested by village clerk ATTACHMENTS!

16 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 Best Practice: When in doubt, use an ordinance

17 ORDINANCE REQUIRED WHEN? Sample of laws requiring ordinance: Approval of plat ( ) Change Name of Street or Avenue ( ) Approval of intergovernmental agreement ( ; ) Approval of agreement between city and elected or appointed official of another city ( ; ) Compensation, appointment, and duties of 3 rd and 4 th class city employees generally ( , special legal counsel, , compensation all officers, , duties generally, & , administrator, , officials generally) Provide that Bonds should be issued ( , third class cities; , fourth class cities) Require Building and Repairing of Sidewalks ( , fourth class cities) Declare Street Grading Necessary ( )

18 DETERMINE INVESTMENT AUTHORITY FOR CITY FUNDS All cities have power to deposit funds in selected depositary banks See , RSMo. Demand or time deposits are ok Caution for 3 rd and 4 th class cities Questionable statutory authority for investing funds See , 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 an investment policy. See , RSMo. for guidance

19 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 holding deposit collateral

20 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 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

21 SEGREGATE BOND FUNDS Avoid commingling bond funds with other city funds Bond funds must be kept separate and not commingled with other city funds , RSMo. Violation of this statute is a misdemeanor, punishable by fine and/or imprisonment , RSMo.

22 CAREFUL PREPARING PROPERTY DESCRIPTIONS SB809 Effective August 28, 2014 restricts ability of lawyers to prepare property descriptions: Amended Section (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.

23 QUESTIONS/SUGGESTIONS

24 For More Information Visit Our Website: or contact us at 333 S. Kirkwood Road, Suite 300 St. Louis, Missouri 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.