May 20, 1991
Michael Echols, Executive Director
South Dakota Housing Development Authority
P.O. Box 1237
Pierre, SD 57501-1237
OFFICIAL OPINION NO. 91-11
Public housing authorities
Dear Mr. Echols:
You have requested an official opinion from this Office based upon the following factual situation:
FACTS:
South Dakota Housing Development Authority is transferring the administration of HUD Section 8 Existing, Voucher, and Moderate Rehabilitation Programs to local public housing authorities (PHAs). SDHDA has operated these programs in all counties throughout South Dakota and the transfer is to effectively continue the statewide access to these programs through contractual agreements between counties and PHAs.
To participate in these programs, an entity must qualify as a PHA. The local PHAs have jurisdictional limitations either to a specific municipality or county. Many cities and counties in the state do not have existing PHAs. To insure continued program administration in areas where the local PHAs do not have jurisdiction or where PHAs do not exist, it is contemplated that the county or city would qualify as a PHA and perform the functions of a PHA, i.e., administer directly or contract with another administrator for these programs.
Based upon these facts, you have asked the following questions:
QUESTIONS:
l. Does a municipality or county have the power to carry out the responsibilities of the Section 8 program, without creating a housing and redevelopment commission for this purpose?
2. Do the provisions of SDCL ch. 1-24 permit a county or municipality (a) to join with other counties or cities or with an existing housing and redevelopment commission to create an entity that would qualify as a PHA for the purpose of undertaking Section 8 programs within the jurisdictions of all such municipalities or counties, or (b) to contract with another entity to administer the Section 8 programs for it within its boundaries?
3. If a joint powers agreement is a permissible way to carry out the Section 8 program, and if the agreement provides that an entity other than the local PHA is to administer the program, (a) may the agreement require that other entity execute the Annual Contributions Contract (ACC) with HUD on behalf of the local PHA, and if so, (b) does SDCL 1-24-9 make the local PHA liable to HUD for any violation or default under the ACC notwithstanding that it was the other entity that executed the ACC?
IN RE QUESTION NO 1:
The South Dakota Housing Development Authority has administered the Department of Housing and Urban Development's Section 8 Existing Housing and Housing Voucher Programs on a statewide basis. SDHDA is contemplating transfer of the responsibility for the administration of these programs to local governments. To participate in these programs, an entity must qualify as a public housing agency, or PHA, which HUD regulations define as any state, county, municipality or other governmental entity or public body authorized to engage in or assist in the development or operation of housing for low-income families. HUD has determined that housing and redevelopment commissions under SDCL ch. 11-7 are duly qualified PHAs. Not all counties and municipalities have activated such commissions by the appropriate resolution, however, and the question has been raised whether the municipality or county can exercise those powers necessary to carry out the programs on their own. See 24 C.F.R. sections 882.116; 887.105; 882.204; and 887.55 to 887.61 (1990).
The analysis must begin with the proposition that both municipalities and counties possess only that authority expressly granted by the Legislature, together with those powers necessarily implied from the legislative grant in order to carry out those express powers. Schryver v Schirmer, 171 N.W.2d 634 (S.D. 1969); AGR 75-24. In order to qualify as a PHA under HUD regulations, the local unit of government must have the power to engage in or assist in the development or operation of housing for low-income families. The pertinent inquiry is whether the Legislature has given that power, either expressly or implicitly, to either municipal or county government.
The Legislature has not seen fit to expressly grant those types of powers to county government. Although it has expressly granted certain powers to municipalities in the area of housing for low-income families, I do not find the express power to undertake the types of activities that would be required of a PHA. SDCL ch. 11-7A sets forth municipal powers in aid of housing and redevelopment; the thrust of those statutes is assistance to local housing and redevelopment commissions. SDCL ch. 11-8 grants the city a variety of powers in the area of urban renewal. Neither of those chapters, however, contain sufficient authority to allow a municipality to function as a PHA in the setting you posed to me, nor am I able to imply the existence of those powers from the express authority found in those chapters.
The types of powers necessary to carry out the particular federal programs involved here have been granted by the Legislature to housing and redevelopment commissions under SDCL ch. 11-7. SDCL 11-7-7 creates such a commission in each county and municipality in the state, but prohibits a commission from transacting any business until activated by the appropriate county or city governing body. The question arises whether the city and county can exercise the powers contained in SDCL ch. 11-7 without activating a commission.
A review of SDCL ch. 11-7 shows that the governing bodies of both the city and the county have significant authority to review and approve what a commission does, once it is activated. See, e.g., SDCL 11-7-49; 11-7-53; 11-7-78. (Notably, the chapter at least implies two separate entities.) Nothing in the chapter, however, addresses the issue of whether either entity may exercise the extensive powers granted to a commission instead of creating a commission. In my opinion, it is necessary to activate a housing and redevelopment commission. Cities or counties cannot independently exercise those powers.
Initially I note that when the Legislature intends that certain powers can be exercised by either of two entities, it certainly knows how to provide for that. For example, in SDCL 11-8-38, cities are given the option of undertaking urban renewal functions themselves or by way of an appointed urban renewal agency. No similar grant is found in SDCL ch. 11-7. Compare SDCL 11-11-25.
The situation here is more akin to that addressed by my predecessor with reference to planning and zoning commissions. In AGR 88-03 this office concluded that a city could not undertake zoning powers under chapters 11-4 or 11-6 unless it had appointed a planning and zoning commission. This situation differs somewhat in that activation of a housing and redevelopment commission is not mandated by statute. I find it persuasive, however, that the Legislature has seen fit to create a housing and redevelopment commission in each city and county, as a separate body politic and corporate with significant powers, and has simply allowed cities and counties to activate those commissions.
It is my opinion, therefore, that neither a county nor a municipality may undertake the authority granted by SDCL ch. 11‑7, and instead must activate a housing and redevelopment commission as set forth in SDCL 11-7-7 in order to carry out those powers. My answer to your first question is "no”.
IN RE QUESTION NO 2:
Your second inquiry has to do with the extent to which a joint powers agreement could be utilized to assist in carrying out the Section 8 programs across the state. Many municipalities and counties have not activated housing and redevelopment commissions and it is of questionable feasibility for them to do so. To address that concern you inquire whether it would be possible for local governments to band together to provide these services by use of SDCL ch. 1-24. To a certain extent, it does appear to be possible to utilize a joint powers agreement.
First, within the strict confines of the question you asked relating to the power of a county or municipality, the answer to your question is "no." SDCL 1-24-2, as amended during the 1990 legislative session, now requires that public agencies can only agree to exercise those police powers that are jointly held, unless otherwise provided by law. S.L. 1990, ch. 17. As is set forth above, neither a county nor a city has the independent authority to carry out the HUD Section 8 programs in question. Therefore, those public agencies cannot acquire those powers by entering into a joint powers agreement with an entity having the authority, like a housing and redevelopment commission.
Second, by using SDCL 1-24-2, it seems to me that the same end result can be reached if counties and cities would activate their respective housing and redevelopment commissions; then those entities could enter into appropriate joint powers agreements. A housing and redevelopment commission as a body politic and corporate meets the definition of a public agency as set forth in SDCL 1-24-1(1). Further, I note that such commissions have the specific authority to act jointly in any event. SDCL 11-7-7.1; SDCL 11-7-7.2. When these specific authorities are read in conjunction with SDCL 1-24-2, I have no trouble concluding that commissions could jointly carry out Section 8 activities.
Thus, it is my opinion that the housing and redevelopment commissions of counties A, B, C, and D could enter into a joint powers agreement with the commissions of cities E, F and G, and everyone could agree that the housing commission from county B would administer the Section 8 program for all parties to the agreement. See AGR 87-23. In my opinion those commissions could not create a separate entity, because there is no authority to do so. AGR 89-30; AGR 78-54. The commissions could, however, agree to a joint board under SDCL 1-24-5, or could designate one of the parties to administer the program. Therefore while my answer to your specific question is "no," several commissions could jointly agree and reach the same end.
IN RE QUESTION NO 3:
Your last question asks whether a joint powers agreement could designate one of the parties to sign the Annual Contributions Contract with HUD on behalf of all of the parties, and if so, what the impact of SDCL 1-24-9 is on the ACC. In my opinion, it is permissible for one party to be designated to sign an ACC. SDCL 1-24-8; SDCL 11-7-27. By the same token it would be equally permissible for each of the parties to execute separate ACCs with HUD and agree that one of the parties or a joint board will perform each of the contracts. In fact, it is also permissible for the joint board to execute an ACC with HUD. Whichever way it is done, I assume that the joint powers agreement and the ACC would reflect the particulars of the arrangement. Further I assume HUD may have a preferred way of handling the ACCs; obviously, that should be ascertained before a joint powers agreement is crafted. Finally, the provisions of SDCL 1-24-9 must be considered.
SDCL 1-24-9 provides:
No agreement made pursuant to §§ 1-24-2 to 1-24-8, inclusive, shall relieve any public agency of any obligation or responsibility imposed upon it by law except that to the extent of actual and timely performance thereof by a joint board or other legal or administrative entity created by an agreement made hereunder, which performance may be offered in satisfaction of the obligation or responsibility.
This provision provides that a governmental unit may not relieve itself of its statutory duties by entering into a joint powers agreement. The statute does provide, however, that performance by another entity under such an agreement will constitute performance by the public agency. I do not interpret that to mean that public agencies may contract away their obligations. Thus, a local housing and redevelopment commission would remain liable for the performance of its duties under the law, even though it may have agreed that another commission would perform those functions in its place.
This continuing liability is a subject to be addressed in the joint powers agreement and would be handled by appropriate indemnity provisions. I also assume it is a matter that HUD will want to address in the ACC, whether entered into with each public agency or jointly by several of them. My answer to both parts of this question is "yes."
Sincerely,
MARK BARNETT
ATTORNEY GENERAL
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