# TheAttorney General ofTexas

March 13. 1986 JIMMAlTOX Attorney

General

s~premo Court Building P.0. BOXt2yB Aus,,“. TX. 78711. 2548 51214752501 Telex 910187+1367 Tslecoqisr 5W475-0266

714Jackson. Suila 7w Dallas. TX. 752024506 214l742-8W

4824 Alberta Ave..Suite 160 ElPaso.TX. 799052793 91Y5353464

1001Texas. Suite700 Houston, TX. 77002~3111 71322M886

806 Broadway. Suite 312 Lubbock. TX. 79401-3479 80617476230

43X N.Tenth, Suite S McAllen. TX. 78501.1685 512682-4547

MO Main Plaza. Suite 4M) SanAntonio, TX 782052797 51212254191

An Equal OPPo~u~itY~ Aftirmative Action Employer EouorablcHenry Wade DistrictAttorney ServicesBuilding Dallas,Texas 75202 Opinion PO. JH-489

Re: Wbcther a cmty my, by auction, lease courthousespace **to** be usedby
a private cafeter(Z

DearMr. Wade:

You have InEozmed us that the Dallas County Comissioners Court wishes to lease e,paceovned by Dallas County lccated in the Cccnty GovernmentCenter. The court proposes **to** lease tte space to a private business to opemte a cafeteria. Pou have also lxfomed us that the area was originally designed and built for use as a cafeteria. and contains county wned cafeteria equipment which till be leased with tha space. The commissioners court also proposes that all utilities will be provided and maintained by the county at no cost to the lessee. Finally, you have informed us that **it** is the intent of the county **to** obtain for the county treasury the greatest amount of rent thatmay be obtaijmedthrough the competitiveprccess. In that regard you have requested our opinion on the authority of the commissicters courtto lease the space and vhat procedures shouldbe utllizet.

TheDallas Colmty Coasaissioners Courthas only the powers conferred either expressly or by **necessary** implicationby ebe constltutior. st.d statutes of this state. See Tex. Coast. art. 7’.518; Canales v. Laughlin, 214 S.W.2d 451. 453 (Tex. 1948). The SFxty-third Legislatureamanded art,Lclc1577.V.T.C.S., to readas fcllous:

The Commissioners Court may. by an crder to ba enteres on its minutes, appoint a Condssloncr to sell or lease any real estata of the county at public au=. and notice of saidpublic auction shall be advertised at least tventy (20) days before the day of sale.by the officer, by having the notice thereof published in tF.a English language once a vcek for three (3) consecutive veeks preceding such sale or lease in a nevspaper in the county inwhich the real estate is located and in the county which owns the real estate, if they arc **not** the same. (Emphasisadded).

SeeActs 1973, 63rd Leg., ch. 449. 51, at 1329. Bus, we believe chat the cafeteria r.pacevithin the County Gove-t Ceptcr is ccunty owned “real estzts” within themeaning of article 1577.

p. 2038Honoreble Renry Wade - Page 2 (a-449)

The authority of a county commissioners court **to** lease space within a courthouse **to** a private business mey be exercised under limited circumstances. The commissionerscourt must determinewhether the use of the rental spscewill not interferewith theproper use of the courthouse. and whether it is nacessary to the convenience of those transactingbusinew in the courthouse. SeeDodsonv. Marshall. 118 S.W.2d 621 (Tex.Civ. App. - Waco 1938. xc dism'd); see also Attorney General Opinion PSI-200 (1980); but see Tarrant County v. Rattikin Title Co., 199 S.H.2d 269 (Tex.Civ. App. - Fort Worth 1947,
no writ) (commissionerscourt is not authorized to lease office space to private enterprisewhd.chwas originally erected for use of public office).

Article 1577 requiras the commissioners court to follow a specified procedure befl)re leasing county-owned **real** estate. We believe that this statutory procedure is-mandatory and the commissioners court isnot allou'ed to deviate from Its standards. See State
v. Pox, 133 S.W.2d 987 ~:Tex. Civ. App. - Austin 1939, writrem Thus, article 2368a.5, V.T.C.S.. the County Purchasing Act. which provides a procedure to assure competitivebidding in regard to county purchases does not apply to leases. SeeV.T.C.S. art. 2368a.5. 13(a);
see also Attorney General Opinion %z385 (1985). Pou provide no information indicating that a contract for services is also involved with this lease. If so, a contract for servicesmustbe separatedand dealtwith under the competitivebidding statutes.
Rowever, as quotet,above. article 1577 only specifies the procedure the commissionor: court is to follow before a public auction is held to lease county-owed real estate. The provision does not specify themodeby which abid is tobe made and otherprocedures for conducting the public auction. Under such circumstances. the Texas Supreme Courthas stated:

Where a ri:ght Is conferred or obligation imposed on sa.id ~commissioners] court, it has implied authority to exercise a broad discretion to accomplish .:IIc purpose intended.

Anderson v. Wood, 152 S.W.2d 1084. 1085 (Tax. 1941). The legislatura in amending srtlcle 1577 :Lntended that s public auctionbe held before leasing county ownedreal estate. V.T.C.S. art. 1577. Therefore, the commissionerscourthas thadiscretionto accomplish thispurpose.

A pub&z auction is the sale or lease of property to thehighest bidder by means of competition for the purpose of a fair price, and shouldbe fairly conducted. See Kolbo v. Blair, 379 S.W.2d 125 (Tex. Civ. App. - CorpusCbristi 1964,writ ref'dn.r.e.); seealsoAttorney General Opinion V-1148 (1951); 7 Tex. Jur. 3d Auction h Auctioneers 51. at 524. You are s?trcifically concerned about the manner of bid required before s lease pursuant to article 1577 is valid. You suggest that a sealed l):;d may be necessary. We are of the opinion

p. 2039Eonoteblo RonryWad. - Pager3 (a-449)

**that** the comisaionecrscourtmay USC full diecretion **in** conducting the auction so long as the intentions of the bidder are plainly indicated and fair **competition** la insured for all parties participating. Cf. Bell County V. Pelta, 120 S.W. 1065 (Tu. Civ. App. 1909). rev’dx other grounds. 132 S.W. 1123)(Tu. 1910) (sale of **county** real estate by public auctionrequirespublic outcry). Althoughbids probablymay be made anonymously. w: do not believe that the auction may be conducted **with** justa aecil.ed bid. The amount of **the** bid must be open **so that**  competingbiddersmay raise theirbids In response.

You have also aske,iwhether a person appointed by the county conmlaaionera court to t,onducta public auction pursuant to article 1577 may be a person other than a “county conmiasioaer”. We think not. Article 1577 requi::c:s that a comniaaioaers courtmay “appoint a commissioner” **to** lease cxunty-owned real eatatt, See V.T.C.S. art. 1577. The words of this provision are clear and unambiguous on this point. See AttorneyGer,e,ral Opinion V-477 (1948) (person **must** be a member ofthe com~Isaionc!ra court). Accordingly,we conclude that the person appointed by tha!cmmisaioners court to execute the lease itself and to oversee a public auction **to** award the lease of countyovued real estate under article 1577 must be a member of the county comdaaionera court. Tke auctioneer need not, however, be a county commissioner.

**SUMMARY**

Article 15Y7, V.T.C.S., requires the Dallas County **Comis~doaera** Court to conduct a public auction to leuae apace in the County Government Center to private business **to** be used as a cafeteria. ‘Ihe commissionera court is also required to determine whether **the** lease of the apace vi11 not:Interfere with the proper use of the courthoua<:

, and whether the lease agreement will afford a convenience to those transacting business in the courthouse. The coemiaaioners courthas some discretion to specifywhat type of bids may be, submitted for consideration at a public auction to lease county-ovued real estate. Sealedbids, t,owever, would defsat the purpose of
a public auczion. Finally, article 1577 also requires that the person appointedby the cosmiasioners court to oversee a public auction be a member of the commissioners court.

HATTOX AttorneyGeneral of Texas

p. 2040Honorable **Aenry Wade**  **- Pagct** 4 (Jn-449)

JACK EIGBTOUER First Assister& Attorney Gmeral

MARY KELLER ExecutiveAssistant Attorney **General**

ROBERT GRAY SpecialAssistantAttorney (General

RICK GILPIX Chairmen,Cpinion Committee
Preparedby Tony Guillory AssistantAttorney General

p. 2041