Opinion
No. CV79-07-0571
Decided August 14, 1979.
Counties — Board of Mental Retardation — Power to contract for transportation services — R. C. 5126.03 construed.
1. Injunctive relief is the proper remedy for an unsuccessful high bidder to bring against a public authority where it is alleged that the contract was unlawfully awarded to a low bidder.
2. R. C. 5126.03 (C) authorizes the board of mental retardation to contract for the purposes of providing transportation for mentally retarded persons.
3. The board of mental retardation must exercise its judgment and discretion in determining the "lowest and best" bid and their judgment and discretion cannot be delegated to the county commissioners.
4. The board of county commissioners only have the power to contract where authorized by statute, and there are no statutes authorizing the county commissioners to contract for purposes of providing transportation for mentally retarded persons.
5. The board of mental retardation is a contracting authority as described in R. C. 307.92, and therefore is bound by the competitive bidding provisions of R. C. 307.86.
6. The board of mental retardation, only having recommended the awarding of the transportation contract, must now exercise its judgment and discretion and take affirmative action to award the contract to the "lowest and best" bidder.
Mr. Carl Morgenstern, for plaintiffs, CB Transportation, Inc. and Darrell Courtney.
Mr. Norbert Doellman, for defendant Butler County Bd. of Mental Retardation.
Ms. Victoria Daiker, for defendant Butler County Bd. of County Commrs. Mr. James C. Cahn, for defendant Community Transit Services, Inc.
The plaintiff herein filed this suit on behalf of the plaintiff, an unsuccessful bidder, against the Butler County Board of Mental Retardation, Butler County Commissioners, and the Community Transit Services, Inc. The latter being the successful bidder on a proposed contract. Plaintiff asks that the defendant Butler County Commissioners be enjoined from entering into the contract with Community Transit Services, Inc. for the reason that the latter was not the "lowest and best" bid. This action was docketed under case No. CV79-07-0571. Thereafter, Darrell Courtney, owner of CB Transportation, Inc. filed a taxpayer's action in case No. CV79-07-0595, and alleged basically the same facts and demanding the same underlying relief as CB Transportation, Inc. demanded in its action under case No. CV79-07-0571, and filed seven days earlier. Counsel for the plaintiff in both cases then filed a motion to consolidate the actions. Inasmuch as the merits of both of these actions involved a common question of law and fact, and further, involved the same parties, the court does hereby consolidate said actions as provided for in Civil Rule 42.
The scenario of events which give rise to this litigation are not overly involved, however the law applicable thereto seems to be quite unique and appears to be a matter of first impression in the state of Ohio. The evidence in this matter disclosed that the Butler County Board of Mental Retardation in its effort to provide transportation for mentally retarded persons, had in prior years entered into contracts with various transportation firms. This contract was in the past executed by the Butler County Commissioners on behalf of the Butler County Board of Mental Retardation. In fact, the plaintiff in this matter was the immediate past contractee, furnishing transportation to the mentally retarded persons. In anticipation of a future contract for transportation, the staff of the Butler County Board of Mental Retardation prepared specifications. These specifications were taken to the Butler County Commissioners who were requested to advertise for bids. The commissioners placed a legal notice in a newspaper of general circulation within the county, and the notice solicited bids from transportation firms to operate an existing system for the transportation of approximately 500 mentally retarded and/or developmentally disabled individuals. The bid further instructed potential bidders that specifications and instructions could be picked up at the office of the Butler County Commissioners. Further, the notice stated, which is of particular interest:
"The Butler County Commissioners and the Butler County Board of Mental Retardation reserve the right to reject any or all bids."
Subsequently bids were received from Community Transit Systems, Inc. and CB Transportation, Inc. On April 23rd these bids were opened by the Butler County Commissioners, and they were referred to the Butler County Board of Mental Retardation for analysis and recommendation. The staff of the mental retardation board then made an analysis of the two bids and furnished the information to its board. Subsequently, the mental retardation board met with both bidders for the purposes of going over their respective bid proposals. On June 6, 1979, the mental retardation board met and adopted a resolution recommending the awarding of the contract to CB Transportation, Inc. The contract covered a three year period, and the successful bidder's bid was about $60,000 higher than the unsuccessful bidder. On June 12, 1979, a communication was sent to the Butler County Commissioners by the mental retardation board requesting the commissioners to award the contract to CB Transportation, Inc., setting forth the reasons for the recommendation. On July 9, 1979, the county commissioners met and considered the recommendation of the mental retardation board. The evidence disclosed that the commissioners were reluctant to award the bid to the bidder whose bid was almost sixty thousand dollars in excess of the competitive bid, and there was considerable inquiry with regard to the capability of the bidders. The staff of the mental retardation board represented to the commissioners that both bidders were capable and qualified in handling the transportation needs of the mental retardation board. The mental retardation board did however, further feel that the higher bid was the "best" bid because of the peculiar "experience and knowledge" of the higher bidder. Generally speaking, the mental retardation board felt more comfortable and secure with this higher bidder. The county commissioners, while respecting the judgment of the board of mental retardation, did not think the higher bidder was sixty thousand dollars "better" than the lower bid and thereupon rejected the recommendation of the mental retardation board and awarded the bid to the lower bidder Community Transit Services, Inc., who the commissioners believed not only to be the lowest bid, but also as good as the higher bid. The contract was for a three year period effective July 31, 1979, through July 30, 1982.
On the face of the foregoing events, the unsuccessful bidder (plaintiff in this action) claims as follows:
"1. That his bid was the lowest and best bid;
"2. That he was the successful bidder;
"3. That the Butler County Commissioners have no authority to award the contract to the defendant Community Transit Services, Inc.;
"4. That the defendant Community Transit Services, Inc., did not bid in accordance with the specification form and therefore, their bid is a nullity and void;
"5. That the action of the Butler County Board of Mental Retardation on June 6, 1979, in awarding the contract to plaintiff is valid and not superseded, modified or cancelled by subsequent action of the Butler County Commissioners on July 9, 1979."
A threshhold issue is introduced by defendants who filed a motion to dismiss the action on the basis that:
1. The plaintiff is not entitled to injunctive relief, and that mandamus is the proper action, and;
2. That the action brought by the plaintiff does not constitute a taxpayer's action.
First, as to whether or not this matter may be brought as a taxpayer's action. The court answers this question in the negative. The evidence disclosed that the taxpayer plaintiff presented a bid in excess of $60,000 of the lowest bid. There was no other evidence introduced which sufficiently impressed the court that the higher bid was the "best" bid. In fact, the evidence clearly indicated that not only the county commissioners, but also the Butler County Board of Mental Retardation believed that both bidders were qualified and could meet the needs of the board of mental retardation insofar as transporting mentally retarded persons. Therefore, we cannot find that the taxpayer has any concern with the cause of action, and that as a matter of fact, the taxpayer is benefited to the extent of almost $60,000 by the county commissioners' action in accepting the bid of Community Transit Services, Inc. See Saunders v. Bd. of Education (1944), 42 Ohio Law Abs. 172, which was also an action by a taxpayer, who was the high bidder, against a public authority.
We do believe however, that the unsuccessful bidder may bring an action for injunctive relief. See H. R. Johnson Construction Co. v. Bd. of Education (1968), 16 Ohio Misc. 99. In the Johnson case, the court upheld the standing of the high bidder to seek and obtain an injunction to prevent a school board from accepting an illegal bid even though such illegal bid was the lowest bid. The court stated the following, at page 101, and we adopt its language:
"Surely the action of the Board has dealt an irreparable injury to a real and not illusory right of plaintiff for which he has no remedy at law. The injunction it seeks is an appropriate remedy for repairing the injury * * *.
"Beyond this, plaintiff has a right to bring this action because nobody else does have the right. And for the law to provide no remedy to redress an illegal official act is the very antithesis of law."
Defendants contend that the remedy, sub judice, is in mandamus, however, the court disagrees. An important feature of the writ of mandamus, and one which distinguishes it from many other remedial writs, is that it is used merely to compel action, and to coerce the performance of a preexisting duty. We hold that the plaintiffs demand for injunctive relief is a proper remedy inasmuch as they are seeking to restrain and enjoin the Butler County Commissioners from acting rather than compel them to perform a clear legal duty. The distinction between the remedy of mandamus and injunction was enunciated in the matter of State, ex rel. Pressley, v. Indus. Comm. (1967), 11 Ohio St.2d 141. This court does therefore entertain this action on the demand for injunctive relief.
We have now overcome the threshold question which permits us to proceed to the merits of this case, to wit: Whether or not the Butler County Commissioners have authority to enter into a contract on behalf of the Butler County Board of Mental Retardation for securing transportation for mentally retarded persons, and if so, do they have the exclusive power or do they share that authority with the retardation board.
These issues particularly revolve around the Revised Code sections, to wit: R. C. 5126.03 and 307.86. The latter section deals with competitive bidding and is quoted in part as follows:
"Anything to be purchased, leased, leased with an option or agreement to purchase, or constructed, including, but not limited to, any product, structure, construction, reconstruction, improvement, maintenance repair or service except the services of an accountant, architect, attorney at law, physician, professional engineer, construction project manager, consultant, surveyor or appraiser, by or on behalf of the county or contracting authority, as defined in section 307.92 of the Ohio Revised Code at a cost in excess of two thousand dollars * * * shall be obtained through competitive bidding * * *." (Emphasis added.)
The more pertinent parts of R. C. 5126.03 which delineate the powers and duties of the county board of mental retardation, state among other things:
"The county board of mental retardation, subject to the rules, regulations and standards of the chief of the division of mental retardation shall:
"(A) Administer and supervise facilities, programs and services established under section 5126.06 of the Revised Codi and exercise such powers and duties as prescribed by the chief.
"(B) Submit an annual report of its work and expenditures, pursuant to section 5126.06 of the Revised Code, to the chief and to the Board of County Commissioners at the close of the fiscal year and at such other times as may be requested;
"(C) Employ such personnel and provide such service, facilities, transportation, and equipment as are necessary;
"(D) Provide such funds as are necessary for the operation of the facilities, programs and services established under section 5126.06 of the Revised Code.
"Any county board of mental retardation may enter into a contract with another such board or with a public or nonprofit agency or an organization of the same or another county, to provide the facilities, programs and services authorized in section 5126.06 of the Revised Code, upon such terms as may be agreeable.
"* * *
"The board of county commissioners shall levy taxes and make appropriations sufficient to enable the county board of mental retardation to perform its functions and duties as provided by this section."
R. C. 5126.03 (C) states that the board of mental retardation shall provide such transportation as is necessary. We now proceed to determine whether or not the board of mental retardation has the concomitant power to enter into contracts for transportation for mentally retarded persons. It would be necessary at this point to determine what the word "provide" means when it instructs the board of mental retardation to provide transportation. The word "provide" is used often and loosely within the Ohio Revised Code, and at least one case attempts to define the word. See In re Neff (1958), 80 Ohio Law Abs. 439, at page 442, wherein the court adopted the meaning given in Webster's New International Dictionary (2nd Ed.) i.e., "`to look out for in advance, to procure beforehand, to prepare for the future, to supply what is needed for sustenance or support.'" This definition clearly embodies the following meanings: To furnish; to supply; to equip in preparation; to fit out with means to an end.
We note in sub-section (D) of R. C. 5126.03 that the mental retardation board is also to "provide" such funds that are necessary for the operation of facilities and programs and services established under R. C. 5126.06. It is necessary that we find some consistency in the word "provide" as employed in sub-section (C) and sub-section (D) before we conclude that the mental retardation board is to actually furnish and supply transportation (by one means or another) or simply plan for the transportation. It is the contention of the county commissioners that the mental retardation board simply plans for the transportation but that the county commissioners contract for it and actually supply it.
Let us examine the appropriate statutes which lead to the funds which are available for the programs under R. C. 5126.06. R. C. 5705.28 provides that on or before the 15th day of July of each year the taxing authority of each subdivision or other taxing unit shall adopt a budget for the next succeeding fiscal year. For this purpose the heads of all departments, boards and commissions, etc. who are entitled to participate in any appropriation or revenue of the subdivision, shall file with the taxing authority an estimate of the contemplated revenues and expenditures for the ensuing fiscal year. The board of mental retardation, we would presume, complies with this section and files with the county commissioners an estimate of revenue and expenditures. R. C. 5705.03 in return permits taxing authority (county commissioners) to levy taxes for the purposes of paying current operating expenses. R. C. 5705.38 authorizes the taxing authority to pass an appropriation measure for each office which would include the board of mental retardation.
We now look at the provisions of R. C. 5705.19 which permits the taxing authority (county commissioners) to adopt a resolution relative to tax levies in excess of the ten mill limitation for certain purposes and we quote the provisions in paragraph (L) which is one of those purposes and is pertinent to the board of mental retardation:
"(L) For the maintenance and operation of schools, training centers [etc.] * * *. Money received from levies * * * shall be appropriated to the use of the county board of mental retardation established under section 5126.01 of the Revised Code. Revenue from a tax levy passed or renewed after October 25, 1965, shall not be expended until the budget for the operation of schools, training centers, workshops, clinics and residential facilities for any retarded persons for that calendar year has been submitted to and approved by the board of county commissioners. Thereafter, surplus funds from the tax levy not used for operating expenses may be dispensed by the county board of mental retardation after approval by the board of county commissioners for the replacement of necessary equipment, or for acquiring, constructing, or improving schools, training centers, workshops, clinics, and residential facilities for the mentally retarded persons."
It will be noticed that the funds which the county commissioners have at their disposal as a result of:
(1) their authority to tax;
(2) their power of appropriation to various boards; and
(3) their authority to certify a tax levy in excess of ten mill limitation on behalf of the board of mental retardation; are to be made available in the account of the board of mental retardation.
We now conclude that the mental retardation board has certain operating funds available to it which are "provided" or "furnished by the county commissioners". In return R. C. 5126.03 (D) mandates that the board of mental retardation "provide" or "furnish" funds from the foregoing sources to operate the programs and facilities as established under 5126.06 which section makes reference to training centers and workshops for mentally retarded. In this case the word "provide" is certainly synonymous with "furnish" irrespective of the original source of the funds. Of course the board of mental retardation can only provide or furnish such funds for the programs under R. C. 5126.06, as are available as a result of the actions of the county commissioners. The net result of these sections of law which provide money to the board of mental retardation through the actions of the county commissioners is to give the commissioners certain fiscal controls which translate into operational controls. As a practical matter the county commissioners may exercise indirect control over the board of mental retardation which is the result of the dependence the mental retardation board has on county funding.
The court would conclude at this point that it would be incongruous to hold the board of mental retardation to a duty to "provide" transportation while withholding the authority to obtain the means of transportation. This transportation might be supplied by the individual members, or it might be operated with motor vehicles belonging to the board of mental retardation, or on the other hand, it might be provided by third parties with whom the board of mental retardation could certainly contract with for purposes of "providing" the transportation required.
We do not wish to belabor this matter, however the court feels that it must review R. C. 307.41 which provides for the purchase or leasing of motor vehicles, which of course the court previously concluded in this opinion that the board of mental retardation could do as one of its options in furnishing transportation. Prior to 1971, R. C. 307.41 read as follows:
"Whenever the board of county commissioners deems it necessary to purchase motor vehicles except for its use or for the use of any department under its direct control it shall adopt a resolution setting forth the necessity for such purchase * * *. (Emphasis added.)
"If the board deems it necessary to purchase motor vehicles for its use or for the use of any department under its direct control, application shall be made by the board to the judge of the court of common pleas of such county. * * *"
Then effective August 18, 1971, R. C. 307.41 was amended to read:
"Whenever the board of county commissioners deems it necessary to purchase motor vehicles it shall adopt a resolution setting forth the necessity for such purchase. * * *"
No longer were there any restrictions on the county commissioners with regard to purchasing vehicles for itself or departments under its direct control. Then, effective August 11, 1975, this section was again amended to read:
"Whenever the board of county commissioners deems it necessary to purchase or lease motor vehicles for its use, or for the use of any department, commission, board, office, or agency under its direct supervision or for the use of any elected county official or his employees, it shall adopt a resolution * * *."
The legislative history of this section would indicate that the county commissioners were first prohibited from purchasing motor vehicles for its use or departments under its direct control without court authority. The section of law was then changed to give the county commissioners carte blanche authority to purchase motor vehicles without any reference to restrictions on purchases for departments under its direct control. Then in 1975, the section was again amended and this time the county commissioners were only authorized to purchase or lease motor vehicles for its use or for the use of any department, etc. under its direct supervision. Unlike this section of law as it existed prior to August 18, 1971, wherein conditions were imposed upon the purchase of vehicles for departments under the direct control of the county commissioners; and unlike the section as it existed from August 18, 1971, until August 10, 1975, when the commissioners were permitted to buy motor vehicles without conditions or restrictions; the current section of law absolutely prohibits the county commissioners from buying motor vehicles except for its own use and except for departments, etc. under its direct supervision.
Certainly the board of mental retardation is not under the direct supervision of the county commissioners. This simply leads us to the ultimate conclusion that the board of mental retardation could purchase or lease automobiles for purposes of transportation, which certainly lends credence to the conclusion heretofore drawn by the court that the board of mental retardation could contract for transportation. We also note that the Ohio Attorney General's Opinion No. 78-027, comes to this same conclusion regarding the authority of the board of mental retardation to purchase or lease motor vehicles. We recognize that that opinion is not binding upon this court, but in this instance, it is certainly persuasive.
Notwithstanding the foregoing conclusion we recognize that the board of mental retardation is bound by the provisions of R. C. 307.86 regarding competitive bidding. That section as quoted, supra, makes reference to competitive bidding on behalf of the county or contracting authority as defined in R. C. 307.92. R. C. 307.92 describes "contracting authority" as:
"* * * [A]ny board, department, commission, authority, trustee, official, administrator, agent, or individual which has authority to contract for or on behalf of the county, or any agency, department, authority, commission, office, or board thereof."
Provided we determine that the board of mental retardation has the authority to contract, as we previously have, then it is a contracting authority within R. C. 307.92 and is subject to the provisions of R. C. 307.86. However, there is no contention that the contract for transportation in the matter sub judice was not done in conformance with the law on competitive bidding. The bidding was advertised by the county commissioners on specifications prepared by the board of mental retardation, with the reservation in the advertisement that any and all bids may be rejected by the board of county commissioners or the board of mental retardation.
The second primary issue is whether or not the board of mental retardation can delegate to the county commissioners the authority to contract for transportation and/or can the county commissioners independently of the mental retardation board contract on its behalf.
R. C. 307.90 states that the contract shall be made to "the lowest and best bidder". The determination of the "lowest bid" is certainly a ministerial function. However, the determination of the "best" bid requires the exercise of judgment and discretion. The presumption is that the board or officer whose judgment and discretion is required, was chosen because they were deemed fit and competent to exercise that judgment and discretion and unless power to substitute another in their place has been given, such board or officer cannot delegate these duties to another. Kelley v. Cincinnati (1900), 7 N.P. 360; Rieke v. Hogan (1940), 34 Ohio Law Abs. 311; 44 O. Jur. 2d, Public Officers, Section 65, at page 552. Burkholder v. Lauber (1965), 6 Ohio Misc. 152. The board of mental retardation is such a board which was appointed to exercise its judgment and discretion, and its manner of appointment gives credence to this position. It is noted that R. C. 5126.01 provides for seven members of the board of mental retardation, five of whom shall be appointed by the board of county commissioners and the other two by the Probate Judge of the county. At least one of the five members appointed by the Butler County Commissioners shall be a parent of a mentally retarded person, and four shall be persons "interested or knowledgeable in the problems of mental retardation and other allied fields". This board, more so than many others appointed by our elected officials are required by law to have expertise and we would presume that the legislature intended that this expertise should be utilized in matters other than ministerial affairs.
We further conclude that the county commissioners do not possess the power to contract on behalf of the board of mental retardation. It would appear from the reading of R. C. Chapter 307 (powers of the board of county commissioners) that the county commissioners do not possess the power to contract in general but only when it is specifically granted.
The authority of the board of county commissioners is limited to the exercise of such powers only as are conferred upon it by law. Peter v. Parkinson, Treas. (1910), 83 Ohio St. 36, quoted with approval in Burkholder v. Lauber, supra.
The court, having concluded, that the board of mental retardation has exclusive authority to contract for transportation for mentally retarded persons is now faced with the factual situation which gave rise to this litigation, namely: The fact that bids have been received pursuant to a legal advertisement and which bids were submitted to the board of mental retardation for approval or recommendation and from there referred to the county commissioners for letting of the contract. Query: Do we start over and re-advertise and ask for bids, or do we permit the board of mental retardation to award the contract in accordance with the bids already submitted pursuant to the legal advertisement? We conclude that to readvertise would be a vain act inasmuch as the legal advertisement contained all the requirements of law, and even went so far as to contain a reservation that any and all bids could be rejected by the county commissioners or the board of mental retardation. We find no benefit to any of the parties, including the general public, to require readvertisement. Two qualified bids were received pursuant to the advertisements, and the court now reaches the conclusion that the board of mental retardation must now exercise its judgment and discretion in letting the contract to the "lowest and best" bidder. This court, in no way, will substitute its judgment and discretion for the board of mental retardation, without a showing of a clear abuse of this discretion, or the failure to exercise the same. However, quite to the contrary, the board of mental retardation consists of members who are interested and knowledgeable in the problems of mental retardation, and who should be quite capable of exercising good judgment and wise discretion.
Finally, we do therefore conclude, that the Butler County Commissioners have no authority to award a contract to the defendant Community Transit Services, Inc., and the Butler County Commissioners are so enjoined from doing so.
We take no further action with regards to the relief demanded in plaintiff's complaint. Plaintiff asked us to find that it was the lowest and best bid and that it was the successful bidder. This is a matter for the judgment and discretion of the board of mental retardation. The plaintiff further asks this court to find that the defendant, The Community Transit Services, Inc., did not bid in accordance with the specifications. There is no evidence to this effect, especially in light of the testimony of the staff members of the board of mental retardation who testified that all bids were in accordance with specifications and were qualified. The plaintiff further asks that we declare that "the action of the board of mental retardation on June 6th, in awarding the contract to plaintiff is valid and not superseded, modified, or cancelled by the subsequent action of the Butler County Commissioners on July 9, 1979". The evidence disclosed that the board of mental retardation never awarded the contract, and only recommended that the county commissioners award the contract to the CB Transportation, Inc. The exact language of the resolution reads as follows:
"Whereby the Board hereby requests the County Commissioners to award the contract for these transportation services to CB Transportation, Inc., for the reason that it is the more responsive offering and better meets the needs of the Board."
The court therefore concludes that there has been no contract awarded for transportation in the matter sub judice, and therefore, before a contract is let, it takes the affirmative action of the board of mental retardation.
Judgment accordingly.