Opinion Number ( 1996 )

Dear Mr. Burkett:

You have requested an opinion of the Attorney General relative to the award by the Sabine Parish Police Jury ("Parish") of a fiscal agent contract to the Sabine State Bank ("Sabine"). The Parish published a "NOTICE TO BIDDERS" and received written responses from Sabine and People's State Bank ("People's"). People's contested the award on the basis that Sabine's bid was not in compliance with applicable state law, and that the contract should have been awarded to People's.

Initially, it should be noted that the State's Local Depository Law generally exempts the Parish from its provisions in light of the fact that the Parish's population is less than 100,000. Section 1217.1 provides:

"Any depositing authority located in a parish or municipality with a population of less than one hundred thousand shall generally be exempt from the provisions of R.S. 39:1211 through 1242 of the Louisiana Revised Statutes of 1950; however, such a depositing authority shall satisfy the security requirements of those Sections and of any other applicable state or federal laws or regulations. All funds under the control of such depositing authorities shall be placed in interest bearing accounts at an interest rate of not less than twenty-five percent below the discount treasury bill rate with regard to treasury bills of comparable maturity on deposit within the parish or municipality, in state banks, national banks, or investments in obligations guaranteed by the federal government."

As noted above, this general exemption does not extend to those provisions of law relating to security requirements. Further, deposits must be placed in interest bearing accounts at the minimum rate enumerated in the statute.

While neither bid was responsive to each and every specification contained in the bid advertisement, the bid submitted by People's was more detailed than Sabine's. For example, we note that Sabine's response failed to indicate the interest rate which deposits would earn or the service charges for checking accounts, if any. Based on the information furnished by you to this office, it is our understanding that, in the past, Sabine has not charged fees for handling checks, and interest paid on deposits has been in accordance with money market account rates which meet or exceed the statutory minimum.

The award of a fiscal agent contract lies within the sound discretion of the Parish. We find no indication in the process that would suggest that Sabine does not intend to comply with all laws applicable to the award and/or its execution. We further find that, while the Sabine bid was not as detailed as People's, it is not violative of the laws of this State.

In the future, should the Parish wish to continue the practice of awarding its fiscal agency contract pursuant to public bid, care should be taken to insure that the award be made to the lowest (i.e., most advantageous) responsive bidder. Failure to do so could result in the denial of due process to the appropriate bidder thereby subjecting the award to judicial attack.

Trusting this adequately responds to inquiry, I am

Very truly yours,

RICHARD P. IEYOUB ATTORNEY GENERAL

By: ______________________________________

ROBERT E. HARROUN, III Assistant Attorney General

RPI/Rob III,/cla

Date Received:

Date Released:

Robert E. Harroun, III Assistant Attorney General