Judges: DUSTIN McDANIEL, Attorney General
Filed Date: 1/18/2008
Status: Precedential
Modified Date: 7/5/2016
The Honorable Bryan B. King State Representative 871 County Road 814 Green Forest, Arkansas 72638-2657
Dear Representative King:
I am writing in response to your request for my opinion on the following questions:
Is the procurement of health insurance for county employees a "personal service" under A.C.A.
When the county renews or extends a county health plan policy with the subject carrier, can the county judge accept a new insurance agent for the health insurance policy, or does the modification require the current insurance policy to be terminated?
Can a county judge elect to renew or extend the county health care plan from the current term in accordance with the contract renewal provisions, or does Arkansas law restrict renewal or extension of insurance contracts from year-to-year in accordance with the contract terms?
Can a county procure the assistance of a professional to assist in the selection of a health insurance plan? Can the procurement of a health insurance policy for county employees constitute a "professional service" under A.C.A.
You report that the counties in your district "would like to renew their health insurance contracts and other insurances from year to year without having to re-bid each year." You further report the following:
The secondary objective of seeking your opinion relates to a lack of clarity in the law as to whether the procurement of health insurance or insurance is a "commodity" as defined by Ark. Code Ann. §
Question 1: Is the procurement of health insurance for county employees a "personal service" under A.C.A.
Although this office has previously opined that the procurement of insurance for county personnel appears to be a "personal service" that does not fall within the statutory definition of "commodity," Op. Att'y Gen. No. 83-225, hence exempting such service from any requirement of competitive bidding, I believe the law on this question is not entirely clear. I am not prepared, however, to opine that my predecessor was mistaken in his conclusions.
Notwithstanding what appears to be your suggestion that "personal service" is addressed in A.C.A. §
"Commodities" means all supplies, goods, material, equipment, machinery, facilities, personal property, and services other than personal services, purchased for or on behalf of the county[.]
(Emphasis added.)
With respect to your specific question regarding whether the procurement of health insurance for county workers constitutes a "personal service," you are apparently concerned that the following definition, which applies to state purchasing procedures, mandates that the provision of such insurance instead be designated a "commodity" subject to the requirement of competitive bidding:
"Commodities" means all property, including, but not limited to, equipment, printing, stationery, supplies, and insurance, but excluding real property, leases on real property, or a permanent interest in real property[.]
A.C.A. §
Unfortunately, the Code is not particularly helpful in resolving how the procurement of health insurance for county employees should be classified. As noted above, A.C.A. §
"Commodities" means all supplies, goods, material, equipment, machinery, facilities, personal property, and services other than personal services, purchased for or on behalf of the county[.]
A.C.A. §
The chapter at no point defines either the term "personal services"2 or "services other than personal services."3 In short, I am unable to opine definitively whether the procurement of health insurance described in your request would qualify as a "commodity" or a "personal service."
Question 2: When the county renews or extends a county health plan policy with the subject carrier, can the county judge accept a new insurance agent for the health insurance policy, or does the modification require the current insurance policy to be terminated?
I should note at the outset that I am not entirely sure what you mean by your reference to "a new insurance agent" for a renewed or extended county health plan policy. However, in my opinion, the county judge's ability to "accept a new insurance agent for the health insurance policy" will depend upon the specific terms of the policy, subject only to the condition that the county judge may not under any circumstances obligate the county to pay expenses in excess of current revenues in any given year. With respect to the latter qualification, Ark. Const. art.
The fiscal affairs of counties, cities and incorporated towns shall be conducted on a sound financial basis, and no county court or levying board or agent of any county shall make or authorize any contract or make any allowance for any purpose whatsoever in excess of the revenue from all sources for the fiscal year in which said contract or allowance is made; nor shall any county judge, county clerk or other county officer, sign or issue any scrip, warrant or make any allowance in excess of the revenue from all sources for the current fiscal year. . . .
To the extent that the renewal or extension of a county health care plan might obligate the county to make expenditures in any given year in excess of that year's revenues, I believe this constitutional provision would prohibit the county judge from entering into the renewal or extension. See Miller County v. Blocker,
Subsection
The county judge shall have the authority to enter into necessary contracts or other agreements to obligate county funds and to approve expenditure of county funds appropriated therefore in the manner provided by law.
In my opinion, this statutory provision, which is in all respects consistent with the provisions of Ark. Const. amend.
Beyond this constitutional issue, I believe the question of whether the county judge could accept a new insurance agent upon the renewal or extension of a county health plan policy is purely controlled by principles of contract law, as is the question of whether such a change would mark a "termination" or merely a "modification" of the initial contract. General principles of contract law dictate that any change in a contractual agreement either be as provided for in the existing document or as agreed to by all signatories. See, e.g., Van Camp v. Van Camp,
Question 3: Can a county judge elect to renew or extend the county health care plan from the current term in accordance with the contract renewal provisions, or does Arkansas law restrict renewal or extension of insurance contracts from year-to-year in accordance with the contract terms?
You appear to assume in your question that the contract itself indeed purports to authorize the county judge to renew or extend the county health care plan. The only provision of Arkansas law that I believe might restrict the county judge's authority to act on such a contractual provision is contained in Ark. Const. art.
Question 4: Can a county procure the assistance of a professional to assist in the selection of a health insurance plan? Can the procurement of a health insurance policy for county employees constitute a "professional service" under A.C.A.
Section
Subsection
Hiring of County Employees, Except Those Persons Employed by Other Elected Officials of the County. The county judge, as the chief executive officer of the county, shall be responsible for the employment of the necessary personnel or for the purchase of labor or services performed by individuals or firms employed by the county, or an agency thereof, for salaries, wages, or other forms of compensation.
This statute locates in the county judge the authority to employ county personnel not employed by other elected officials and to contract for services with independent contractors.
Section
(b) It is the policy of the State of Arkansas and its political subdivisions that political subdivisions shall follow the procedures stated in this section, except that competitive bidding shall not be used for the procurement of legal, financial advisory, architectural, engineering, construction management, and land surveying professional consultant services.
(c) For purposes of this subchapter, a political subdivision of the state may elect to not use competitive bidding for other professional services not listed in subsection (b) of this section with a two-thirds (2/3) vote of the political subdivision's governing body.
(e)(2) "Other professional services" means professional services not listed in subsection (b) of this section as defined by a political subdivision with a two-thirds (2/3) vote of its governing body.
It is clear on the face of this statute that the list of "professional services" set forth in subsection (b) is not exhaustive but that contracting for "other professional services" must be done by competitive bid unless 2/3 of the governing board directs otherwise.
You have not indicated in your question what variety of "professional" you contemplate might be retained "to assist in the selection of a health insurance plan." Assuming that the individual indeed qualifies as a "professional," it is possible that his services might be classified as "financial advisory," thus warranting dispensing with the competitive bidding requirement with respect to the value of his services. However, this question is one of fact that I am neither equipped nor authorized to address. Again assuming that the individual in question is indeed a "professional" in the sense referenced in A.C.A. §
With respect to the question of whether the quorum court might simply declare an individual a "professional" and hence avoid what might otherwise be a statutorily mandated bidding requirement, I can only note that the provisions of state law on this matter will take precedence over any contrary local provisions. Stated differently, if an individual is not a "professional" in the sense contemplated in A.C.A. §
Assistant Attorney General Jack Druff prepared the foregoing opinion, which I hereby approve.
Sincerely,
DUSTIN McDANIEL Attorney General