November 7, 2001
Dear City Administrator:
You have the following question, transmitted to me through your consultant: In light of the contract between the city and your Recreational Facilities, what powers does the city have to pass regulations governing the use of the city park, without the approval of the park committee?
In my opinion, the park is a city park, and the contract itself generally contains the management parameters of the park committee. In addition, the city retains all of its police powers over the park. The police power is the power to pass regulations that promote the health, welfare and safety of the citizens of the city. The police power cannot be surrendered or contracted away. For that reason, the city can issue any regulations that promote the health, welfare and safety of the citizens of the city with respect to the park. I realize that is not a specific answer. However, the police powers are very broad and are not capable of a precise definition.
Let me make an important point here: I do not know what, if any, conflicts have arisen between the city and the park committee over the park committee’s role in the management of the park, and I do not question the motives of either the city or the park committee. Nobody who has had children in any little league sports can deny the unbelievable commitment on the part of the people who establish and promote little league sports programs. Their dedication of both time and money to childrens’ athletic programs has few parallels. My review of the contract in question, is general.
The Town and the Recreational Facilities, Inc., a Tennessee non-profit corporation (IRS 501(c)(3) application pending) entered into a contract on February 3, 1999, for the management of a Park. The park is the product of financial contributions in roughly equal parts by the town and Recreational Facilities. Under Paragraph 2 of the contract, the park is to be “managed” by a park committee consisting of the chairman of the town’s park and recreation and tourism commission, a Recreational Facilities representative, a representative of the County Little League, a representative of Football, and the mayor or a member of the town board of mayor and aldermen appointed by the mayor. Beginning the 6th year of contract, the mayor can appoint two additional members to the park committee. The park committee is supposed to meet once a month; however, it apparently has not met for many months.
The contract does not expressly define what “management” means. But the intent of the parties is the cardinal rule of the interpretation of contracts. In that regard, the contract does speak of certain areas in which the park committee has a management role.
November 7, 2001
Paragraph 3 of the contract outlines the objectives of the park committee [emphasis is mine] (in order of priority): (A) To finish certain ball fields; (B) To construct a walking trail; (3) Begin an “ongoing” program of constructing playground facilities; (4) Construct a baseball and adult softball fields; (5) Add additional recreational facilities and programs as deemed appropriate and financially feasible by the park committee. If those are the objectives of the park committee, presumably, the contract contemplates the park committee oversee and direct the accomplishment of those objectives.
Paragraphs 4 and 5 of the contract speak of certain responsibilities of the parties. With respect to the town, they are maintenance of park facilities, liability and property insurance, the payment of utility hook-ups and monthly fees, complete the purchase of a certain 13 acres of land from the Recreational Facilities, and secure certain grant funds. The Recreational Facilities has the responsibility of applying funds it receives from the sale to the town of the certain 13 acres of land to park expenses or programs conducted at the park.
It appears that there would be little, if any, park committee “management” involved in the city’s responsibilities, except perhaps some general oversight and input into how those responsibilities are fulfilled. Perhaps the park committee could set reasonable maintenance standards. The city’s responsibility for securing liability and property insurance seems pretty cut and dried. Presumably, the park committee would have some general oversight into the adequacy of the insurance, especially property insurance. The city pays utility hook-up and monthly fees under the contract, but those fees are undoubtedly prescribed by city ordinances or resolutions, over which the park committee would have no control. A similar analysis would seem to apply to the city’s purchase of the 13 acres of land from the Recreational Facilities, and to the city’s attempt to secure grant funds for park development.
Paragraph 6 of the contract says that, “The park shall be continually developed and managed through the Park Committee.” [Emphasis is mine.] But next sentence seems to impliedly define what “managed” means in that context: “The funding for the continued development is to be managed as follows:...” There follows an outline of a process whereby in accordance with the normal budgeting cycles of the town and of the grant process, the park committee submits a budget to the city. The budget identifies an operating budget to be funded “under the Town’s obligation according to items 4 A, B, or C above.” Items 4 A, B, and C include respectively, the town’ responsibilities outlined above: maintenance of park facilities, the provision of liability and property insurance, and utility hook-up and monthly fees. The budget also identifies financial or volunteer contributions to the park operating budget that comes from Recreational Facilities or other community organizations, businesses, or individuals, and a proposed capital budget. At the end of C, which provides for a proposed capital budget, there appears the sentence: “The town’s normal budgeting processes will accept or modify the proposed funding.” Arguably, that sentence applies only to the proposed capital budget, but it goes without saying that the city can modify the proposed operating budget of the park. The town certainly has the responsibility to perform its obligations under the contract, but it is not one of the town’s obligations to simply rubber stamp the budget submitted by the park committee.
Paragraph 10 includes several conditions that apparently attach to state park grants, and reflect areas over which the park committee expressly has some management functions:
A. Scheduling the use of the park: “Use of the park shall be governed by a reasonable scheduling procedure established by the Park Committee.” The park committee is also responsible for putting a notice in the newspaper “setting forth the procedure to schedule the use of the park...”
B. Solicitation of bids and contracts: “At such times and on such terms as the Park Committee deems reasonable, the Park Committee shall solicit bids and award contracts for the operation of concessions and parking at the Park.”
It seems to me from a reading of the contract that the parties contemplated the park committee’s management of the park to be more along financial, developmental, and scheduling lines, rather than along operational lines, except in those areas I have noted.
But the intention of the parties is irrelevant to park regulations based on the city’s police powers; the city simply cannot–and for that reason did not--contract its police powers away to the park board. In City of Paris v. Paris Henry County Public Utility District, 340 S.W.2d 885 (Tenn. 1960), the Tennessee Supreme Court made an important distinction between a city’s proprietary powers to contract and its governmental powers. In that case the city by ordinance No. 295 granted a franchise to a utility district to lay, construct and maintain its gas lines in the city’s streets. By Ordinance No. 316 it required any person making a street excavation to obtain a permit from the city, and to pay a permit fee. The utility district refused to obtain a permit or pay a permit fee before it made street cuts, arguing that Ordinance No. 316 was unconstitutional and an impairment of contract under Article I, Section 20, of the Tennessee Constitution on the ground that Ordinance No. 295 provided that the utility district’s agreement to the franchise would be the consideration and “in lieu of all other fees, charges and licenses the city might impose for the rights and privileges herein granted.”
The Court sided with the city. It was true, said the Court, that when the utility district and the city entered into the franchise, it became binding upon the city, and that the franchise gave the utility district the right to use the city’s streets and install its pipes, and that the contract rights created by the franchise could not be impaired or revoked by the city. However, continued the Court, Ordinance 316 was a valid police regulation, because the utility district’s contractual right was :
...subject to regulation by the City, acting in its governmental capacity under the police power, delegated to it by the State, to regulate and control its streets for the public health and safety. Such power is broad and cannot be limited by contract. [At 889 [Citations omitted.]
Ordinances 295 and 316 were talking about two different fees, declared the Court:
The fees for permits under ordinance 316, however, are not “fees, charges or licenses” imposed by the City, for any “rights or privileges” granted by ordinance 295. The latter class of “fees,” etc., were a matter of contract, or rather they were forbidden by the contract between Defendant and the City acting in its proprietary capacity. [Citation omitted.] But the former class of fees, fees for permits under ordinance 316, are exacted by the City, acting in its governmental capacity, as in incident to its enforcement of police power regulation, and were not, and could not, be controlled or limited by contract. [At 889]
Also see Bristol Housing Authority v. Bristol Gas Corp., 407 S.W.2d 681, 683 (1966).
Although the contract does not say so, there appears no question that the park at issue is a city park. Under Section 12(15) of its charter, the city has the authority to establish, open, repair, construct, maintain various public facilities, including “parks, ” and “regulate their use within or without the corporate limits.” Section 12(16) and (18) similarly authorizes the same city activity with respect to “public places,” and “public buildings, and other structures, works and improvement...” Section 12(26) authorizes the city to “Provide and maintain...recreative...functions, facilities, instrumentalities, conveniences and services.” Under Section 12(22), the city has the power to:
Define, prohibit, abate, suppress, prevent and regulate all practices, conduct, business, occupations, callings, trades, use of property and all other things whatsoever detrimental, or liable to be detrimental, to the health, morals, comfort, safety, convenience or welfare of the inhabitants of the municipality, and to exercise general police powers.
The city’s authority to establish a park, its ownership of the park, and the police powers over the park delegated to it by the state in the city’s charter, make it very clear that the city has the authority to pass police power regulations over the park without the park committee’s permission. As I pointed out above, it is difficult to define the parameters of police power regulations. Generally, most regulations that cities pass are based on their police power. They include any reasonable regulation related to the health, welfare, safety and convenience of the citizens of the city. With respect to the park, such regulations could prescribe and proscribe conduct by users of the park, hours of park operation, and conditions for the use of park facilities. Those categories of regulations are not exhaustive of possible police power regulations, but are only examples.
Sidney D. Hemsley
Senior Law Consultant