Opinion Number ( 2004 )

Dear Mayor Fontenot:

The City of New Iberia would like to use a piece of property that it owns for recreational purposes pursuant to an agreement with the Parish of Iberia and a private, non-profit corporation. You question if the City may legally do so. In short, we believe the City may use its property for recreational purposes pursuant to a cooperative endeavor agreement with the Parish and the private, non-profit corporation.

The land at issue was purchased with bond proceeds. The bonds were issued for construction of the City's wastewater treatment plant. The City purchased the land in 2002 but left a portion, the piece of property at issue, as a buffer area between the plant and residential and commercial development. Thus, the land at issue is undeveloped. The City is considering allowing this land to be used for recreational purposes, i.e. baseball, softball and soccer fields. The non-profit corporation will provide the funding necessary to make the improvements on the land and will also manage the facility. The Parish will construct the improvements. The agreement will provide that the land used cannot include any area needed for the plant and will be used for recreational purposes. The term of the agreement is fifteen years and the City may amend the agreement on 36 months notice in the event the land is needed for the plant's operations. The agreement will also specify that this land cannot interfere with the construction and/or operation of the plant and all improvements to the property must be approved by the City and will belong to the City at the end of the agreement.

The Louisiana Constitution allows the state and its political subdivisions to enter into cooperative endeavor agreements with each other or with any private corporation and/or individual.¹ There are three requirements that must be met in order to have a constitutionally sound agreement. The first requirement is that the state or political subdivision of the state be authorized to spend the funds at issue. The second requirement is the agreement must benefit the public. Third, the cost must be proportionate to the public's benefit.

A governing body may establish a system of supervised recreation.² Certainly, the citizens of the City of New Iberia will benefit from this recreational facility. And assuming the City's cost is commensurate with its benefit, the agreement is constitutionally sound.

We further recommend that the City have its bond counsel review the agreement. It does not appear from the information provided in your request that any bond proceeds will be used in the endeavor but please note that Louisiana law expressly provides that bond proceeds must be used in accordance with the purposes set forth in the bond act.³ In light of this, we again recommend that you review the agreement with bond counsel.

Yours very truly,

CHARLES C. FOTI, JR. Attorney General

BY: _____________________________ TINA VICARI GRANT Assistant Attorney General

CCF, jr./TVG/dam

¹ Article 7, Section 14 C of the Louisiana Constitution

² La.R.S. 33:4553

³ La.R.S. 39:1365