May 19, 2003
Dear Mayor:
You have what appears to me two questions:
1. Can the city administrator on his own initiative determine that there is an emergency
to which the emergency purchasing provisions of the Municipal Purchasing Law apply, and make
emergency purchases under that Law?
Under the city charter, state laws, and municipal code provisions that apply to city
purchases, it appears that the mayor and the city administrator can on their own initiatives make
emergency purchases. However, under the Municipal Purchasing Law, an emergency purchase
must reflect an “actual emergency,” and the case law in other jurisdictions indicates that the
emergency must be a real one, and if it is not real, the courts will set it aside. .
2. Can the city administrator make emergency purchases in excess of the purchasing
limit prescribed by the Municipal Code?
The answer to this question is not clear, but a good argument can be made that the answer
is yes.
The above questions arise from the fact that the city’s animal control truck broke down,
and the city administrator purchased a surplus state or federal government vehicle to replace it,
declaring that the purchase was an “emergency purchase.” The purchase price of the truck
exceeded $5,000.
Here I must recommend that the governing body of the city look carefully at ' 5-401 of
the Municipal Code and clarify it, particularly with respect to emergency purchases. In this
connection, I am not suggesting what the city’s policy should be in this area, only that the city’s
policy be made clear.
Under the Municipal Charter, the city administrator’s prescribed duties appear more
closely akin to those of a city manager. Article 3, ' 4 of the charter makes him “the chief
administrative officer of the city,” with broad powers to run the city. With respect to his
purchasing powers, Article 3, ' 4(9) provides that he has the power “To act as purchasing agent
for the city.” However, Article 5, ' 10 of the charter also provides that “Purchasing and bidding
procedures shall be established by ordinance in accordance with state law.”
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Page 2
The state law governing municipal purchasing is the Municipal Purchasing Law of 1983,
codified at Tennessee Code Annotated, ' 6-56-301 et seq. Tennessee Code Annotated, ' 6-56302 provides that the Municipal Purchasing Law applies to all purchases by municipal officials
using or encumbering municipal funds, with some exceptions. One of those exceptions is for
“purchases by authorized officials in municipalities having charter provisions or private act
requirements governing competitive bidding and purchasing.” Arguably, Article 5, ' 10 of the
Municipal Charter is such a charter provision governing competitive bidding and purchasing
However, that appears a weak argument because Article 5, ' 10 of the charter does not actually
contain competitive bidding and purchasing requirements. Rather, it contains the requirement
that “Purchasing and bidding [not competitive bidding] procedures” shall be prescribed by
ordinance, and that those procedures shall be “in accordance with state law.” For that reason,
Article 5, ' 10 insures that the Municipal Purchasing Law does apply to purchases by the City,
including the competitive bidding procedures prescribed therein. But as we shall see below, the
Municipal Purchasing Law does not prescribe who has the right to make purchases, including
emergency purchases.
Tennessee Code Annotated, ' 6-56-304 requires that, “Except as hereinafter provided, all
purchases and leases or lease-purchases and agreements shall be made or entered into only after
public advertisement and competitive bid....” That statute contains several exceptions to the
competitive bidding requirement, three of which are pertinent to your questions:
1. Purchases of less than $2,500, except that the municipality has the right by ordinance
to raise that amount to $10,000. [Tennessee Code Annotated, '' 6-56-304(1), and 6-56-306].
In addition, the following provision was added to Tennessee Code Annotated, ' 6-56-306, in
1999: “(b) Municipal governing bodies are specifically authorized to adopt regulations providing
procedures for implementing the provisions of this part.”
2. Emergency purchases of supplies, materials and equipment for immediate delivery in
Aactual emergencies arising from unforseen causes, including delays by contractors, delays in
transportation, and unanticipated volume of work. A record of the emergency purchase must be
made “by the person or body authorizing such emergency purchases.” The record must contain
certain information, “including the nature of the emergency,” and must be made as soon as
possible “to the municipal governing body and the chief executive officer of the municipality....”
[Tennessee Code Annotated, ' 6-56-304(3)]
3. “Purchases, leases, or lease-purchases from any federal, state or local government unit
or agency of secondhand articles or equipment or other materials, supplies, commodities, and
equipment.” [Tennessee Code Annotated, ' 6-56-304(6)].
The city has by ordinance, codified in ' 5-401 of the Municipal Code, adopted the
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following purchasing regulations:
(1) Competitive bids shall be required when the purchase cost for goods and
services is $5,000 or more;
(2) All purchases shall require prenumbered purchase orders;
(3) Purchases under the amount of fifty dollars ($50.00) may be made with a
purchase order at the discretion of department directors. Purchases over the
amount of fifty dollars ($50.00) shall require the city administrator’s approval
prior to the purchase. When the city administrator is unavailable and an
emergency purchase need arises, the mayor shall issue approval for the item.
Here let us analyze your questions under the three exceptions to the Municipal Purchasing
Law that are pertinent to those questions.
1. Purchases of less than $2,500 (up to $10,000).
The Municipal Purchasing Law does not prescribe who in a municipality may exercise
purchasing powers. Indeed, it provides only dollar limits above which competitive bids are
required for municipal purchases, allows municipalities to adjust the dollar amount downward, or
upward to certain limits, and lists the categories of purchases to which the competitive bidding
requirements of the Municipal Purchasing Law does not apply.
Under Article 3, '4 of the city’s charter, the city administrator is the purchasing agent of
the city. Nothing in that provision prescribes any specific duties or powers in connection with
the function of purchasing agent. However, Article 5, ' 10 seems clearly to make purchasing
and bidding procedures subject to regulation by ordinance, “in accordance with state law.”
Under the rule of statutory construction that requires statutes to be read together to clarify and
give meaning to all of them, the city administrator is the purchasing agent of the city, but his
functions and powers can be prescribed by the city’s governing body. Indeed, Tennessee Code
Annotated, ' 6-56-304(b), provides that the city has the right “to adopt regulations providing
procedures for implementing the provisions of this part.” The “part” of which that statute
speaks, is Part 3, of Chapter 56, of Title 6, of Tennessee Code Annotated, which is the Municipal
Purchasing Law. Tennessee Code Annotated, ' 6-56-306(b), and Article 5, ' 10, of the
Municipal Charter, then, give the City the authority to regulate purchasing by the city
administrator, including emergency purchasing.
Let me point here to Tennessee Code Annotated, 6-56-303, which provides that:
All purchases made from funds subject to the authority of this part shall be made
within the limits of the approved budget, when required, and the appropriations,
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when required, for the department, office or agency for which the purchase is
made.
This provision applies to all purchases under the Municipal Purchasing Law; it does not exempt
emergency purchases or purchases made from governments. If the purchase of the truck in
question did not comply with that provision it was illegal, and no further inquiry need be made.
2. Emergency purchases.
It is said in Tennessee Code Annotated, 6-56-303(3) with respect to emergency
purchases that “A record of any emergency purchase shall be made by the person or body
authorizing such emergency purchases....” That statute clearly indicates a recognition on the part
of the Municipal Purchasing Law that in some cities a “person” might have the authority to make
emergency purchases, and that in some cities a “body” might have that authority.
Article 3, ' 4(9) of the city charter makes the city administrator the purchasing agent of
the city. Section 5-401(3) of the Municipal Code, gives the city administrator the authority to
make emergency purchases, albeit, in a left-handed fashion. It provides that, “When the city
administrator is unavailable and an emergency purchase need arises, the mayor shall issue
approval for the item.” Section 5-401(3) contains no dollar limit on the emergency purchase that
can be made by the mayor or city administrator. The same is true of Tennessee Code Annotated,
' 6-56-303.
But ' 5-401(1) of the Municipal Code contains a dollar limit on city purchases without
competitive bids: $5,000. As I understand the facts, the truck in question cost more than $5,000.
Obviously, if the $5,000 limit applies to emergency purchases, the purchase exceeded the city
administrator’s limits. Section 5-401 is not clear on its face on that point. Article 5, ' 10 of the
city’s charter provides that “Purchasing and bidding procedures shall be established by ordinance
in accordance with state law.” Tennessee Code Annotated, ' 5-304(3) exempts emergency
purchasers from competitive bid requirements. In addition, ' 5-401 of the Municipal Code
separately speaks of the limit on city purchases without competitive bids, and of the emergency
purchasing authority of the mayor and city administrator. For that reason, it can be argued that,
read together, Article 5, ' 10 of the charter, Tennessee Code Annotated, ' 5-304(3) and ' 5-401
of the Municipal Code intended to exempt emergency purchases from the $5,000 limits on city
purchases without competitive bids. But that is not a slam-dunk argument.
The Municipal Purchasing Law does not define the term “emergency,” but it limits
emergency purchases to “actual emergencies arising from unforseen causes, including delays by
contractors, delays in transportation, and unanticipated volume work.” It seems plain that “actual
emergencies” are the product of unseen causes, such as “delays by contractors....” not the
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unforseen causes themselves. But what is an “actual emergency”?
There is no Tennessee case on that question, but a significant number of them exist in
other jurisdictions, including in our parent State of North Carolina. In Raynor v. Commissions
for Town of Louisburg, 17 S.E.2d 495 (1941), the State of North Carolina had a municipal
purchasing law that required competitive bidding in purchases of over $1,000, except “in cases of
special emergency involving the health and safety of the people or their property.” The city’s
governing body contracted for the purchase of two large diesel engines for, and to make certain
repairs to, its power plant. The plaintiffs challenged the purchase on the ground that it violated
the purchasing law. Among the arguments the city made was that the purchase was necessitated
by a “special emergency.” The Court rejected the city’s argument, although the proof at the trial
court showed that the power plant was operating with four old engines, which needed
replacement or repair, and that there was a national emergency (the case was decided a matter of
days short of the beginning of WWII).
The Court’s first addressed the questions of the degree of judicial deference to be
accorded a declaration of an emergency, and which party had the burden of providing the
emergency:
The governing board of a municipality cannot declare an emergency where none
exists and thus defeat the provisions of a law. While we may treat their
determination with some degree of liberality respecting the conditions supposedly
giving rise to the emergency, the board does not possess a legal discretion in the
matter and its findings are not beyond review. 44 C.J. 102; Mallon v. Board of
Water Com’rs,, 144 Mo. App. 104, 138 S.W. 764. Judicial opinion differs
somewhat as to the consideration that should be given to the declaration of
municipal authorities that an emergency exists and the manner in which the
evidence upon which the findings are made may be reviewed. Los Angeles
Dredging Co. v. City of Long Beach, 210 Cal. 348, 291 P. 839, 71 A.L.R. 161;
Continental Construction Co. v. City of Lawrence, 297 Mass. 513, 9. N.E.2d 550,
111 A.L.R. 699. The city council or aldermanic body, by whatever name called is
not a court whose findings of fact are binding upon appellate courts where there is
evidence to support them. Moore v. Lambeth, 207 N.C. 23, 175
S.E.714....Administrative boards, although necessarily called upon to find facts
upon which they base their actions, are not usually immune from review of their
conclusions, although there may be some evidence to support them, unless the law
of their creation or some supplemental statute makes them so....It is generally held
that where the statute does not in terms confer authority on the municipal council
to declare an emergency, but only creates an exception to the prescribed mode of
contracting, predicating the power of the council on the existence of an emergency
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as a fact, the court may review the findings as to the existence of the emergency
and declare that no emergency exists. Continental Construction Co. v. City of
Lawrence, supra, 297 Mass. 513, 9 N.E.2d 550, 111 A.L.R. 699; Merrill v. City of
Lowell, 236 Mass. 463, 138 N.E. 862; Green v. Okanogan County, 60 Wash. 309,
111 P. 226, 144 P. 457; Tobin v. Town Council of Sundance, 45 Wyo. 219, 17
P.2d 666, 84 A.L.R. 902. It has been held that a declaration that an emergency
exists, in a resolution preliminary to the making of a contract, is prima facie
evidence of the existence of the emergency and places the burden upon the party
attacking the declaration. Los Angeles Dredging Co. v. City of Long Beach,
supra; Morgan v. City of Long Beach, 57 Cal. App. 134, 207 P.53. To the
contrary is Continental Construction Co. v. City of Lawrence, supra [297 Mass.
513, 9 N.E.2d 551, 111 A.L.R 699]: “Nor do we think that such a declaration has
any presumptive or evidential force in establishing the existence in fact of an
emergency.” In Moore v. Lambeth, supra [207 N.C. 23,175 S.E.715], upon the
issue there joined, it was held that the burden was upon those who claim to
exercise the power under the exception to establish the facts upon which the
asserted power is based. “One who claims the benefit of an exception in the
statute has the burden of showing that he comes within the exception,” citing a
number of North Carolina cases sustaining the rule. [At 498B99]
Then the Court turned to the question of whether an emergency existed in this case:
While perhaps a precise definition of “emergency” as fulfilling the requirements
of the statute is not possible, and each case must, to some extent stand upon its
own bottom, we hold that an emergency which would relieve the town council of
the duty of advertising for competitive bids must be present, immediate, and
existing, and not a condition which may or may not arise in the future or one that
is about to arise or may be expected to arise. [At 499]
The Supreme Court of New Jersey in Scatuorchio v. Jersey City Incinerator Authority,
100 A.2d 869 (1954), conceding that the there was some authority to the contrary, declared that
even where a statute made conclusive a municipal governing body’s determination that an
emergency existed, that determination was still subject to judicial review. That declaration
appears to reflect the heavy weight of authority.
In Scatuorchio the Court also defined an “emergency” with respect to a state statute that
authorized the waiver of competitive bid procedures in emergencies, but did not define the term
“emergency.” An emergency, said the Court, is a “sudden or unexpected occurrence or condition
calling for immediate action.” [At 877-78] The emergency had to be real, and could not result
from contrived circumstances, in this case the prospect of the accumulation of garbage on the city
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streets arising form the city’s attempt to avoid the competitive bid laws to insure that a particular
contractor received the bid for garbage collection .
In Bigham v. Lee County, 185 So. 818 (Miss. 1939), a state statute permitted the
circumvention of competitive bidding requirements with respect to contracts for “working public
roads...except in cases of emergency when a bridge or road has been or is about to be damaged
by floods or other special cases elsewhere provided....” The Court reached into Words and
Phrases, Second Series, p. 255, and into the dictionary for the definition of “emergency”: :
“An event or occasional combination of circumstances calling for immediate
action, pressing necessity, a sudden or unexpected happening, exigency.” Citing
cases. “The word ‘emergency’ is defined in Cent. Dict. As follows: ‘A sudden or
unexpected happening; an unforseen occurrence or condition; specifically, a
perplexing contingency or complication of circumstances. A sudden or
unexpected occasion for action; exigency; pressing necessity.” Citing cases. “The
word ‘emergency’ signifies some sudden or unexpected necessity, requiring
immediate or at least quick action....” [At 820]
There was no emergency in this case, held the Court. The facts indicated that the
purchases involved lumber bought over a period of time for the repair of old and dangerous
bridges, but not for repairs of bridges damaged from flooding, etc.
Tobin v. Town Council of Town of Sundance, 17 P.2d 666 (Wyo. 1933), points to what
an emergency is, and is not, in the context of municipal purchasing laws. There a state statute
governing the appropriations procedure could be waived to allow municipal improvements by a
4/5s vote of the municipal governing body, “the necessity of which is caused by any casualty or
accident happening after such annual appropriation is made.” The Wyoming Supreme Court
ruled that there was “no casualty or emergency,” supporting the city’s appropriations for certain
street repairs after the annual appropriation was made. The proof of the condition of the streets
at the trial court level was conflicting, and resolved against the city by the trial court. Although
there was testimony that unusual rain fall during the spring had put the roads in bad condition,
only 59/100 of an inch of rain had fallen during the month of September when the contract for
the road improvements was let, “and the streets were not at that time excessively wet, dangerous,
or impassable. There was, therefore, in that respect, no such casualty, accident or emergency, as
that term is ordinarily construed in statutes of this character.” [At 672] Citing Los Angeles
Dredging Co. v. City of Long Beach, 291 P. 839, 843, the Court added, that “By definition, the
term ‘emergency’ implies a sudden or unexpected necessity requiring speedy action.” [At 672]
Those and other cases suggest that the existence of an “actual emergency” within the
meaning of Tennessee Code Annotated, ' 6-56-304 probably must be decided on a case-by-case
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basis. But generally it would probably be extremely difficult for a municipal official to prove
that a broken-down animal control truck reflected an actual emergency. It appears a strained
argument that the temporary lack of an animal control truck generated immediate public danger
to the extent it justified an emergency purchase of a surplus vehicle from the state or federal
government. Most of the above cases involved emergency purchasing decisions made by
municipal governing bodies. I am not sure what deference a court would pay to such decisions
on the part of a city administrator or other municipal official, but I suspect it would be less than
the deference they would accord to municipal governing bodies.
Those cases also indicate that emergency contracts let when there is no emergency are
ultra vires contracts [beyond the power of the city]. Under Baird v. City of Lebanon, 756 S.W.2d
236 (Tenn. 1988), there are two kinds of ultra vires contracts in Tennessee: a contract into which
the city did not have the power to enter, and a contract into which the city had the power to enter
but into which it did not enter by legally prescribed manner. Baird, says that the first kind of
ultra vires contract the courts will set aside, but will subject the second kind of ultra vires
contracts to equitable principles, including the consideration of whether it has been executed.
If there was no actual emergency when the animal control truck was purchased, it appears
that the contract for the purchase is an ultra vires contract. However, I am not certain of the kind
of ultra vires contract. Plainly, a city has a right to make emergency purchases without
competitive bidding under Tennessee Code Annotated, ' 6-54-304. It is also true that under the
City Charter and Municipal Codes, the city administrator had the authority to make emergency
purchases. For that reason, if there was no actual emergency to support the purchase, arguably it
is an ultra vires contract of the second kind, and its legality would rest upon equitable principles.
But I suspect that where it is clear there is no actual emergency, an emergency purchase contract
comes nearer to being an ultra vires contract of the first kind. But the fact that the vehicle was
purchased from a government might also have a bearing on its legality.
3. Purchases from governments.
Tennessee Code Annotated, ' 6-56-304(5) exempts from competitive bidding
requirements purchases of second-hand equipment, etc., from governments.
Section 5-401 of the Municipal Code separately mentions the $5,000 limit on city
purchases without competitive bidding, and emergency purchases by the mayor and city
administrator. From that separate mention, ' 5-401 read together with Article 5, ' 10 of the
city’s charter and the Municipal Purchasing Law, it can be argued that it was the intention of ' 5401 to give the mayor and city administrator emergency purchasing authority that exceeded the
$5,000 limit on city purchases without competitive bidding. But there is no separate mention in
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' 5-401 of the Municipal Code of the $5,000 limit and of purchases of equipment, etc., from
governments. For that reason, it is difficult to argue that the city administrator could exceed the
$5,000 limit to purchase the truck under Tennessee Code Annotated, ' 6-56-304(6).
I have not gone into the question of who has standing to challenge the legality of the
emergency purchase for the truck in question, or into other legal issues associated with such a
suit. As I pointed out earlier, I am not even sure what kind of ultra vires contract arises from an
emergency purchase when no emergency exists. The answer to that question is critical to the
kind of remedies that might be available to one challenging the legality of the contract. I will be
glad to go into those questions and issues further if the need arises.
Sincerely,
Sidney D. Hemsley
Senior Law Consultant
SDH/