Knowledgebase-Contract for the County to Maintain the City's Streets in Exchange for Payment


Information Product

Title:Contract for the County to Maintain the City's Streets in Exchange for Payment
Summary:MTAS was asked whether the county and the city have the legal right to enter into the contract for the former to maintain the latter's streets in exchange for payment for such maintenance.
Original Author:Hemsley, Sid
Co-Author:
Product Create Date:10/12/90
Last Reviewed on::06/19/2017
Subject:Streets--Maintenance; Intergovernmental agreements; Contracts
Type:Legal Opinion
Legal Opinion:

Reference Documents:

Text of Document: October 12, 1990

Your first question is whether the county and the city have the legal right to enter into the contract for the former to maintain the latter's streets in exchange for payment for such maintenance. I assume your second question is whether the set of ordinances and resolutions you sent first, and the "AGREEMENT" you sent second, are contracts.

The answer to the first question is yes. Of late there has been considerable publicity about the debate over the question of whether a county can spend money on municipal streets. Of course, the counties generally take the position that they do not have the authority to spend money for such a purpose. However, in the case of your County and Town, the ordinance and resolution governing the period July 1, 1989 through June 30, 1990 calls for the payment to the county of "all of the beer tax money which it receives as received," and that the City pay the County for "ordinary and normal maintenance, just as has been done by the County Highway Department in the past..." The payment to the County is apparently not to exceed the combined amount of sales tax and gas tax received by the town. That ordinance and resolution appear to have been approved by the county and the city governing bodies, respectively. The "AGREEMENT" which ostensibly covers the period July 1, 1990 through June 30, 1991, is supported by no other documentation, except that the dates have been changed, suggesting that it was a part of the first agreement. It provides that the County will do normal road maintenance for the Town in exchange for payment, the sources of which are not indicated. But what is not clear from that "AGREEMENT" is whether it was approved by the County. There is no evidence on its face that it received such approval.

A contract for the maintenance of municipal streets by a county in exchange for payment by the municipality appears to be within the contemplation of Tennessee Code Annotated, section 54-7-202, which contains a general prohibition against counties spending road money or using manpower, equipment and materials for private use, with the following exception in subsection (d)(1):

Provided, however, that the county governing body shall have the authority to authorize the county road department to perform work for other governmental entities; provided, that the cost of the projects so authorized is to be reimbursed to the county road department. [Emphasis is mine.]

The term "other governmental entities" is broad enough to encompass municipalities. A city is required to pay for the road work done by the county, but both the ordinance/resolution and the "AGREEMENT" meet that requirement.

Contracts between governmental entities for one entity to provide service to another entity are also authorized by Tennessee Code Annotated, section 12-9-109. A careful reading of that provision indicates it is dependent upon an independent right of a county to perform road work for a municipality, but that right is established by Tennessee Code Annotated, section 54-7-202.

Although the ordinance/resolution for the period July 1, 1989 through June 30, 1990 are unartfully drawn, they collectively appear to have all the elements of a contract and meet all the requirements of Tennessee Code Annotated, section 54-7-402 and 12-9-109, assuming they received the proper approval of the county and town governing bodies, as appear to be reflected on their faces.

I cannot say the same thing about the "AGREEMENT" ostensibly covering the period July 1, 1990 through June 30, 1991, for reasons that should be clear from information in the second paragraph. I am at a loss to determine whether the "AGREEMENT" was a part of the contract for the period July 1, 1989 through June 30, 1990. I suspect that it was because those dates have been crossed out and the latter ones substituted. But if it is the only document purporting to be a contract for the period July 1, 1990 through June 30, 1991, it is not supported by the county's agreement. While its face indicates its approval by the city governing body on July 9, 1990, there is not similar evidence relative to the county governing body.

In short, without further information, supported by documentation, relative to what both the city and the county did in this matter for the period July 1, 1990 though June 30, 1991, I cannot tell you whether you have a contract with the county for the latter to provide you with road maintenance for that period.

If I can help you further in this or any other matter, please let me know.

Sincerely,

Sidney D. Hemsley
Senior Law Consultant
/SDH

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