The Honorable C. W. Rarisch Opinion No. H-912
County Attorney
Waller County Re: County contracts with
Bempstead, Texas 77445 physicians to practice in
county medical clinics.
Dear W. Rarisch:
you have requested an opinion concerning the ability of
the Commissioners Court of Waller County
Medical Center (Rural Outreach Project)
to contract with certain physicians to
practice in the clinic.
Your accompanying brief specifically raises issues
concerning whether~the making of such a contract is within the
power of the commissioner's court and whether the proposed
contract would constitute an illegal use of county and
federal monies and facilities under article 3, section 52
or article 11, section 3 of the Texas Constitution.
Under the terms of the proposed contract the Waller
County Medical Center Clinic, a facility of Waller County,
would agree to pay the clinic physician $3,333.33 monthly,
such payment being derived from fees charged to the Clinic's
patients for physician's services they receive in accordance
with their ability to pay. The Clinic would be responsible
for fee billing and collection,~and fees so derived would be
placed in a special physician's fee account. Any fees in
excess of the initial amountto be paid to the physician
would be paid to the Clinic as partial reimbursement for
expenses incurred in providing services set out in the
contract, and any funds over and above such reimbursement
would be divided equally between physician and Clinic until
the Clinic's monthly overhead is met. Any remaining funds
would be disbursed to the physician.
p. 3826
The Honorable C. W: Karisch - page 2 (H-912)
The contract provides that the Clinic shall maintain
staff.to provide nursing services, bookkeeping and accounting
services, janitorial services, maintenance of the grounds
and administrative services. In addition, the Clinic is
to provide the physician with office and clinical space,
equipment, supplies and personnel. According to your brief,
the office and clinical space will be provided by the county
in recently constructed medical clinic offices adjacent to
the County Kospital. The contract specifies that the
obligations of the Clinic are to be met solely with funds
obtained from a Department of Health, Education and Welfare
grant. We assume that the funds received under the
federal grant will become county monies with the restriction
that they be used for the purpose for which the grant is
made.
The authority of the commissioner's court to make
contracts in the county's behalf is strictly limited to that
conferred, expressly or by fairor necessary'implication, by
the Constitution or statutes of the State of Texas. See
Galveston, H.&S.A. Ry. Co. v; Uvalde County, 167 S.W.r305
(Tex. Civ. AUP. -- San ZiFoiiToT§TX writ ref'd w.0.m.):
&per v. I%&.: 280 S.W. 289 (Tex. Civ. App. -- Waco 1925,
no wrim; Attorney General Opinions H-367 (1974), H-127 (1973),
M-843 (19711, C-772 (19661, C-342 (1964), C-246 (19641,
V-1082 (1950), V-173 (1947). We believe that the requisite
authority may be found in article 4478, V.T.C.S., which
provides that the commissioner's court "shall have Dower
to establish . . . 9 medical or other health facilities"
and in article 4418f, V.T.C.S.,yhich gives the commissioner's
court authority "to appropriate and expend money . . . for
and in behalf of public health and sanitation within its
County.' (Bnphasis added). This office has upheld the
authority of the county, acting through its commissioner's
court,.to contract with others to carry out its statutory
duties to provide for public or governmental purposes.
Attorney General Opinions M-843 (1971), M-605 (1970) and M-
678 (1970). Therefore, we believe that the proposed contract
may be entered into by the Waller County Commissioner's
Court as a valid exercise of its statutorily conferred
powers.
p. 3827
The Honorable C. W. Karisch - page ,3 (H-912~)
The remaining question concerns whether payments made
or services and office space provided under the terms of the
contract would constitute an illegal use of public funds
under the provisions of the Texas Constitution which prohibit
the granting of public monies under specified circumstances.
Article 11, section 3 of the Texas Constitution provides:
No county, city, or other municipal
corporation shall hereafter become a sub-
scriber to the capital of any
Fh$ ration or
- association, or@iF
ma e any
appropriat on or donation to the same, or . . .
in any way affect any obligation heretofore
undertaken pursuant to law. (Emphasis added).
Due to the fact that the contract you have proposed is intended
to be between the county.commissioner's court and one or more
physicians, each in his individual capacity, we do not
believe article'll, section 3 is applicable.
Article 3, section 52 of the Texas Constitution states:
(a) Except as otherwise provided by this
section, the Legislature shall have no power
to authorize any county, city, town or other
political corporation or subdivision of the
State to lend its credit or to grant..public
money or thing of value,in aid of, or to any
individual, association or corporation what-
soever, or to become a stockholder in such
corporation, association or company. . . .
Expenditures for clinic personnel, supplies and equipment
and the granting of office space to the physician as proposed
in your contract are not within the specified exceptions in
subsection (b) of section 52. The Texas courts, however,
have made it clear that not every expenditure of public
money which benefits a private individual or corporation
violates this constitutional orohibition. The Court in
Barrin ton v. Cokinos, 338 S.W.2d 133 (Tex. Sup. 19601, held
+---
an expenditure for the direct accomplishment
of a legitimate public . . . purpose is not
rendered unlawful by the fact that a privately
owned business may be benefited thereby. -Id.
at 140.
p. 3828
The Honorable C. W. Earisch - page'4 (H-912)
It is our opinion that the establishment, staffing and
operation of a countvmedical clinic constitutes such a
public purpose. See-Seydler v. Border, 115 S.W.2d 702 (Tex.
Civ. App. -- Galvzon 1938; Eit ref'd).
In addition to the requirement that public monies be
used for the accomplishment of a public purpose, the courts
have indicated other criteria which they will consider in
holding a transaction between a political subdivision and
a private party permissible under the Texas Constitution.
One of these criteria is that there is sufficient assurance,
through contractual or statutory obligations, that the public
purpose will continue to be accomplished. See Bland v. City
of Ta lor 37 S.W.2d 291 (Tex. Civ. App. -- Austin 19311,
xfinne
-+I-- 67 S.W.2a 1033 (1934). -See also Willatt, Constitutional
Restrictions on Use of Public Money andublic Credit, 38 Tex.
B.J. 413 (1975). Under the terms of the contract you have
proposed, the county acting through the Clinic would control
disbursement of funds and supervise the operation of the
facilities.
Finally, under the terms of the proposed contract, the
county will receive what is represented to be an adequate
consideration in return for its expenditures. In addition
to the consideration in'the form of public benefit, the
county will receive reimbursement out of fees derived from
the physician's services. --
See Sullivan v. Andrews Countv.
517 S.W.2d 410 (Tex. Civ. App. ----
,El -
Pasoy974, writ=-
n.r.e.1; Bodson v, Marshall, 118 S.W.2d 621 (Tex. Civ.
App. -- WZEiTFm3Z writ aism'a); Attorney General Opinions
M-843 (19711, M-782 (1971). Therefore, we believe that the
proposed contract expenditures by the Waller County Medical.
Clinic to certain physicians would not as a matter of law
constitute a violation of article 3, section 52 of the Texas
Constitution.
SUMMARY
The proposed contract between the
Waller County Commissioner's Court,
the Waller County Medical Clinic and
certain physicians is within the
p. 3829
The Honorable C. W. Karisch - page 5 (H-912)
statutorily conferred powers Of the
commissioners court and would~not, as
a matter of law, constitute a violation
of either article,ll, section 3 or
article 3, section 52 of the Texas
Constitution.
APPROVED:
Opini&i Committee
jwb
p. 3830