Wisconsin Legislature: oag5-09

DNE

(See PDF for image) STATE OF WISCONSIN

DEPARTMENT OF JUSTICE

J.B. VAN HOLLEN

ATTORNEY GENERAL

Raymond P. Taffora

Deputy Attorney General

114 East, State Capitol

P.O. Box 7857

Madison, WI 53707-7857

608/266-1221

TTY 1-800-947-3529

November 12, 2009 OAG—5—09

The Honorable Russ Decker

Chair
Committee on Senate Organization
211 South, State Capitol
Madison, WI 53702

Dear Senator Decker:

¶ 1.

On behalf of the Committee on Senate Organization, you request my formal opinion with respect to two questions concerning intergovernmental agreements between local units of government involving public works projects whose estimated cost exceeds $25,000. You are not concerned with intergovernmental agreements between local units of government for purchases of equipment, materials, or supplies in connection with public works projects, nor are you concerned with highways, streets, and bridges constructed or improved with federal or state funds and local matching funds as provided in Wis. Stat. § 86.25(4). You are especially concerned with county highway contracts under Wis. Stat. §§ 83.03(1) and 83.035.

BACKGROUND

¶ 2.

The materials[1] accompanying your request evince concern that counties have engaged in a wide range of competitive bidding against private contractors upon public works projects, but contain no facts or information concerning intergovernmental agreements involving public works projects other than those involving county highway contracts. Counties must have statutory authorization in order to engage in competitive bidding against private contractors. See St. ex rel. Teunas v. Kenosha County, 142 Wis. 2d 498, 504, 418 N.W.2d 833 (1988). Counties do currently possess statutory authority to “construct or improve or repair or aid in constructing or improving or repairing any highway or bridge in the county.” Wis. Stat. § 83.03(1).

¶ 3.

I have carefully reviewed a March 10, 2006 letter from my predecessor to you and to Senator Jeff Plale that was not a formal opinion of the Attorney General under Wis. Stat. § 165.015(1). For the reasons that follow, I respectfully disagree with portions of the legal analysis contained in that letter.

QUESTIONS PRESENTED AND BRIEF ANSWERS

¶ 4.

I have reworded your questions, as follows:

1. With respect to public works projects whose estimated cost exceeds $25,000, are intergovernmental agreements between local units of government (other than those for purchases of equipment, materials, or supplies, and those excepted by Wis. Stat. § 86.25(4)) under Wis. Stat. § 66.0301 or Wis. Stat. § 83.035 subject to city, village, and county municipal competitive bidding requirements and therefore to the competitive bidding procedures in Wis. Stat. § 66.0901?

¶ 5.

In my opinion, statutorily-authorized intergovernmental agreements for purchases of all services are exempt from municipal competitive bidding requirements and procedures under Wis. Stat. § 66.0131(2). County highway contracts entered into by the county highway committee or the county highway commissioner under Wis. Stat. §§ 83.035 and 83.04(1) are exempt from county competitive bidding requirements pursuant to Wis. Stat. § 59.52(29)(a). Cities, villages, and counties also are exempt from municipal competitive bidding requirements on any project that involves an intergovernmental agreement where the municipalities that will perform the work have made a determination to do the work themselves with their own employees.

2. With respect to any public works or public construction project whose estimated cost exceeds $25,000, must state prevailing wage rates be paid to the employees of a local unit of government that enters into an intergovernmental agreement pursuant to Wis. Stat. § 66.0301 or Wis. Stat. § 83.035 to perform services for another local unit of government upon such a project?

¶ 6.

In my opinion, effective January 1, 2010, the answer is yes. Prior to that date, in my opinion the answer is no. Both before and after January 1, 2010, prevailing wage rates are not required upon public works or public construction projects performed or undertaken pursuant to intergovernmental agreements involving the joint exercise of any power or duty by two or more local units of government.

ANALYSIS

APPLICABILITY OF STATUTORY COMPETITIVE BIDDING REQUIREMENTS TO INTERGOVERNMENTAL AGREEMENTS BETWEEN LOCAL UNITS OF GOVERNMENT.

¶ 7.

“[P]ublic construction” contracts whose estimated cost exceeds $25,000 that are let by cities or villages ordinarily must be competitively bid. Wis. Stat. §§ 61.55 and 62.15(1). With the exception of certain county highway contracts, Wis. Stat. § 59.52(29)(a) similarly provides that county “public work” whose estimated cost exceeds $25,000 “including any contract for the construction, repair, remodeling or improvement of any public work, [or] building” ordinarily must be competitively bid. The items that are subject to these competitive bidding statutes are commonly referred to as “public works projects.” The competitive bidding procedures specified in Wis. Stat. § 66.0901 must be utilized in connection with those public works projects that are required to be competitively bid. See, e.g., Wis. Stat. §§ 59.52(29)(a) and 61.55.

¶ 8.

Wisconsin Stat. § 66.0301(2) provides that “any municipality may contract with other municipalities . . . for the receipt or furnishing of services or the joint exercise of any power or duty required or authorized by law.” This provision authorizes one local unit of government to contract with another local unit of government for (1) the receipt of services; (2) the furnishing of services; or (3) the joint exercise of any power or duty. See, e.g., 72 Op. Att’y Gen. 85 (1983). The scope of a local unit of government’s authority to do each of these three things is limited to “the extent of its lawful powers and duties.” Wis. Stat. § 66.0301(2).

¶ 9.

The Legislature has exempted municipal “purchases” from all other units of government from municipal competitive bidding requirements: “Notwithstanding any statute requiring bids for public purchases, any local governmental unit may make purchases from another unit of government, including the state or federal government, without the intervention of bids.” Wis. Stat. § 66.0131(2). The term “purchase” means “1 . . . d: to obtain (as merchandise) by paying money or its equivalent : buy for a price (purchased a new suit). Webster’s Third New International Dictionary 1844 (1986). The term “purchase” is not limited to goods or merchandise. See http://www.merriam-webster.com/dictionary/purchase.

¶ 10.

Legislation must be construed according to its plain meaning by examining the words actually enacted into law. State ex rel. Kalal v. Circuit Court, 2004 WI 58, ¶ 45, 271 Wis. 2d 633, 681 N.W.2d 110. The plain meaning of the term “purchases” in Wis. Stat. § 66.0131(2) encompasses all goods and services.[2] The enacted language does not limit “purchases” to specific kinds of items, such as equipment, materials, and supplies.