Alva Electric, Inc. v. Evansville Vanderburgh School Corp.

FRIEDLANDER, Judge,

dissenting.

Because I believe the actions of School Corporation and Foundation were lawful and not subject to competitive bidding procedures, I respectfully dissent.15

Contractors do not argue, and the Majority does not conclude, that any individual contract entered into or step taken by School Corporation or Foundation was unlawful. Indeed, at oral argument, counsel for Contractors expressly conceded that each of the six contracts was legal. Nevertheless, the Majority concludes that “notwithstanding the six contracts, this was one transaction — the renovation of a building owned and paid for by School Corporation using public funds.” Op. at 682. The Majority’s conclusion is based upon School Corporation’s heavy involvement in and control over the renovation project from its inception to its completion, and the existence of alternative methods by which School Corporation could have accomplished the renovation which would have required public bidding or compliance with other statutory requirements.

I am unconvinced that the series of con-cededly lawful transactions at issue in this case adds up to a violation of the Public Bidding Laws or the Antitrust Act. Unlike the Majority, I see nothing “artificial” in viewing each of the contracts as a distinct step, and I do not believe that the mere existence of other methods by which School Corporation could have carried out the renovation without the Foundation’s help equates to a mandate that it do so.16 *685Id. at 68B. Rather, for the reasons explained below, I believe that the series of lawful transactions at issue in this case is, when viewed in the aggregate, entirely lawful.

I am of the opinion that this case can be resolved based on the plain language of the relevant statutes. Unless specifically excluded, the Public Work Statute applies to “all public work performed or contracted for by” political subdivisions and their agencies, “regardless of whether it is performed on property owned or leased by the political subdivision or agency.” I.C. § 36-l-12-l(a). “Public work” is defined in relevant part as “the construction, reconstruction, alteration, or renovation of a public building ... that is paid for out of a public fund or out of a special assessment.” I.C. § 36-1-12-2. Thus, to be subject to the competitive bidding procedures set forth in the Public Work Statute, the renovation at issue here must have been performed or contracted for by a political subdivision or its agency and paid for out of a public fund or special assessment. I believe neither of these requirements was satisfied in this case.

Although School Corporation exerted considerable control over the renovation project, Foundation was the only entity that contracted with ICI to carry out the project. It is my belief that the plain language of I.C. § 36 — 1—12—1 (a), which provides that the Public Work Statute applies to public work performed or contracted for by a political subdivision or its agency, does not cover contracts entered into by private entities like Foundation— even if those contracts are entered into for the ultimate benefit of and in cooperation with a political subdivision like School Corporation.

Additionally, regardless of its intended use, a project or structure is not subject to the Public Work Statute unless it is paid for out of a public fund or special assessment. This requirement reflects the purpose behind the Public Work Statute, i.e., wise stewardship of public funds. There is no indication that any special assessment was levied in relation to the renovation project; the relevant question is therefore whether the renovation project is being paid for out of a “public fund.”

Contractors argue that the renovation project is being paid for out of a public fund because, under the installment purchase agreement, School Corporation makes payments to Foundation in precisely the same amounts and on precisely the same dates as Foundation makes payments to ICI. Put another way, the Contractors assert that the renovation is being paid for out of a public fund because Foundation obtains all of the money it uses to pay ICI from School Corporation, and the transfer of the funds from School Corporation to Foundation does nothing to alter the character of those funds. The Contractors argue that in order to conclude that the renovation project is not being paid for out of a public fund, this court would be required to “overlook the obvious” and “check its common sense at the door.” Reply Brief at 13. It is telling, however, that Contractors never discuss the statutory definition of “public fund” in their analysis of this issue.

The General Assembly has defined the phrase “public fund” to mean all funds that are:

(A) derived from the established revenue sources of a political subdivision or an agency of a political subdivision; and
(B) deposited in a general or special fund of a municipal corporation, or an*686other political subdivision or agency of a political subdivision. ■

I.C. § 36-1-12-1.2(9). Two general observations can be drawn from this statutory language. First, the definition is written in the conjunctive; both elements must be satisfied for the funds to be considered “public” for the purposes of the statute. Second, the statute’s requirement that the funds be “deposited in a general or special fund” of a political subdivision indicates that the origin of the funds is not the only relevant consideration; the funds must also be held by a municipal corporation or political subdivision.

Here, even if it can be said that the funds used to pay for the renovation were “derived” from School Corporation’s established revenue sources, those funds are not “deposited in a general or special fund of a ... political subdivision.” See I.C. § 36-1-12-1.2. Once the funds are transferred to Foundation, they are no longer part of a public fund because they are no longer held by a political subdivision. In other words, the public dollar is spent only once — when School Corporation makes payment to Foundation. The interpretation urged by the Contractors, and implicitly accepted by the Majority, effectively reads the second element out of the statute. Perhaps I.C. § 36-1-12-1.2(9) provides a narrow definition of public fund, but it is the definition our General Assembly has prescribed, and we are not at liberty to expand it.

Because I believe that the unambiguous statutory language at issue here precludes us from engaging in statutory construction, I think that discussion of legislative intent and public policy is unnecessary. Nevertheless, in light of Contractors’ insistence that a broader construction of the Public Bidding Laws is required in order to effectuate legislative intent and protect the policies behind the laws, I briefly note that there is a countervailing policy at work here that has not been discussed by the parties or the Majority.

Across the state of Indiana, numerous private foundations exist to provide support to public and private educational institutions. These charitable foundations provide educational institutions with a number of resources and, in so doing, aid them in reaching their educational objectives. Such public-private cooperation is nothing new, and it is beneficial to the citizens of Indiana because it enhances the quality of our public educational system while easing the burden on taxpayers. If the General Assembly wished to place the sorts of limitations on public-private cooperation as the Majority’s opinion suggests, I believe it would have done so expressly. Moreover, I believe that today’s opinion creates uncertainty for private foundations regarding the extent of support they may provide for public educational institutions before becoming subject to Public Bidding Laws. I believe the attendant risk of incurring liability for failure to comply with these laws, which were designed to apply only to public institutions, may significantly chill private educational foundations’ willingness to provide resources for the benefit of public educational institutions. For all of these reasons, I disagree with the Majority’s holding and would affirm the trial court’s order granting summary judgment.

. Additionally, I briefly note that I would not be so quick to dismiss Foundation’s mootness argument on the basis of the public interest exception. If the facts of this case are as anomalous as Contractors would have us believe, I am uncertain that this case truly presents a matter of great public importance or one that is likely to recur. Moreover, I am troubled by Contractors’ request that we "set a precedent concerning whether a school corporation or other municipal corporation can, in the future, use the same method that School Corporation used to renovate the Building.” Op. at 676. I believe this is tantamount to a request for an advisory opinion, which we ordinarily decline to issue. See Mosley v. State, 908 N.E.2d 599 (Ind.2009).

. I believe that Contractors’ and the Majority’s reliance on I.C. § 20-26-3-5, which provides that ”[i]f there is a constitutional or statutory provision requiring a specific manner for exercising a power, a school corporation that exercises the power shall exercise the power in the specified manner as a minimum requirement" is misplaced. The Major*685ity’s analysis in this regard assumes it was School Corporation that carried out the renovation project, which begs the question, in my opinion.