Can a Texas county back out of a joint city-county library contract on its own?

Texas AG Opinion JM-1095: Can a County Unilaterally Cancel a City-County Library Contract?

Plain-English summary

The City of Seguin and Guadalupe County had run a shared public library together since a 1964 contract. Under that agreement, the county's commissioners court, with the city council's consent, appointed a board of trustees to build and manage the library; the city provided the building site and grounds; and both governments agreed to help fund operations. In 1975 the two governments adopted a set of "by-laws" as amendments to the contract, changing how board members were selected. Then, in 1988, the county commissioners court voted on its own to rescind those 1975 by-law amendments. The city did not join in, and neither did the board. The county attorney asked the Attorney General whether that unilateral rescission worked, and about the validity of the arrangement generally.

The Attorney General did not have to decide whether the original 1964 contract was valid when it was signed. The key event, the opinion held, was 1975. By 1971 the legislature had enacted the Interlocal Cooperation Act, and a 1968 constitutional amendment (article III, section 64(b)) had authorized counties and other local governments to contract with each other to perform governmental functions. The Interlocal Cooperation Act expressly listed library services as a covered "governmental function and service." So by 1975, both the city and the county clearly had authority to contract with each other to run a public library, whether or not they had that authority in 1964.

That mattered because of a settled contract-law principle: cities and counties can ratify a contract they could lawfully make at the time of ratification, even if they lacked the power when the contract was first signed. The opinion drew on Texas cases where a local government's later conduct (such as filing suit to enforce an oral terracing agreement) ratified an otherwise ultra vires contract. Applying that principle, the opinion concluded that by adopting the 1975 by-law amendments after the Interlocal Cooperation Act made such contracts lawful, the city and county confirmed and ratified their arrangement, curing any defect that might have made the original 1964 agreement unenforceable.

The consequence for the county's 1988 move was decisive. Once the parties ratified the agreement in 1975, it became a binding contract. A binding contract between the two governments could not be cancelled arbitrarily by the commissioners court acting alone, so the attempted unilateral rescission in 1988 was ineffective. The opinion was careful to add that it did not pass on the particulars of the 1975 by-laws themselves, and that it accepted the county attorney's account of the facts rather than independently verifying the documents.

Currency note

This opinion was issued in 1989. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The Interlocal Cooperation Act (former V.T.C.S. art. 4413(32c)) has since been recodified into chapter 791 of the Government Code, and the public-library statute (former article 1694, V.T.C.S.) into chapter 323 of the Local Government Code. Anyone dealing with a present-day interlocal library or services agreement should work from the current Government Code and Local Government Code rather than the statutes as numbered here.

Who this opinion affected (as of 1989)

The City of Seguin and Guadalupe County: The opinion treated their library arrangement as a binding, ratified interlocal contract, meaning changes required action by both governments rather than one acting alone.

The library board of trustees: The opinion supported the continuity of the board's arrangement, since the county's unilateral 1988 rescission of the 1975 by-law amendments was ineffective.

Other Texas cities and counties in joint ventures: The opinion illustrated that adopting amendments to a shared agreement after the Interlocal Cooperation Act took effect could ratify and validate the whole arrangement, and that a ratified interlocal contract cannot be unilaterally cancelled by one party.

Common questions

Could Guadalupe County cancel the library contract by itself?
No. The Attorney General concluded that once the city and county ratified the agreement in 1975, it was a binding contract that could not be arbitrarily cancelled by the commissioners court alone, so the 1988 rescission vote was ineffective.

What made the contract valid if the 1964 version might have been improper?
Ratification. By adopting the 1975 by-law amendments after the Interlocal Cooperation Act authorized such city-county contracts, the parties confirmed and ratified the arrangement, curing any ultra vires defect in the original agreement.

What is the Interlocal Cooperation Act's role here?
The 1971 Act (with the 1968 constitutional amendment in article III, section 64(b)) authorized local governments to contract with one another to perform governmental functions, and it expressly included library services. That gave the city and county clear authority to contract for a library by 1975.

Did the opinion decide whether the 1975 by-laws themselves were proper?
No. The opinion expressly declined to pass on the particulars of the 1975 by-law amendments; it decided only that the city and county had the power in 1975 to revise and ratify their pre-existing agreement.

Background and statutory framework

The 1964 contract had the board render free library service for all of Guadalupe County under the authority of article 1694, V.T.C.S., whose provisions are now embodied in section 323.011 of the Local Government Code, a nonsubstantive revision. See Acts 1987, 70th Leg., ch. 149, at 1129. The City of Seguin had been a home-rule city since 1971, and home-rule cities have broad charter authority so long as it is not inconsistent with the constitution or general law. Tex. Const. art. XI, § 5; Local Gov't Code ch. 9; Forwood v. City of Taylor, 214 S.W.2d 282 (Tex. 1948). Counties, by contrast, generally depend on authorization from the constitution or the legislature.

Two developments supplied that authorization. A 1968 amendment added article III, section 64(b) to the Texas Constitution, providing that county government, or any political subdivisions comprising or located within it, may contract with one another for the performance of governmental functions required or authorized by the constitution or the laws of the state, on terms the legislature prescribes. And in 1971 the legislature enacted the Interlocal Cooperation Act, providing that "any local government may contract or agree with one or more local governments to perform governmental functions and services under terms of this Act." V.T.C.S. art. 4413(32c), § 4(a). Library services were expressly included in the definition of "governmental functions and services." Id. § 3(2). The Act was made cumulative of all other laws. Id. § 7.

On ratification, the opinion applied the principle that even if the 1964 contract was unenforceable and void when made because one or both parties acted ultra vires, counties and cities may ratify a contract they could lawfully make at the time of ratification, although they lacked that power when the contract was executed. The opinion cited Kutzschbach v. Williamson County, 118 S.W.2d 930 (Tex. Civ. App. - Austin 1938, writ dism'd), where a commissioners court ordered terracing work done without the written request the statute required, but its later suit to enforce the arrangement amounted to a ratification that rendered the contract valid. See also Williams v. Pure Oil Co., 78 S.W.2d 929 (Tex. 1935); Mobile Electric Co. v. City of Mobile, 79 So. 39 (Ala. 1918). Applying that principle, the opinion concluded that by adopting the 1975 by-law amendments after the Interlocal Cooperation Act permitted such contracts, the county and city confirmed and ratified their arrangement, curing any ultra vires defect. Because the ratified agreement was a binding contract, the county's attempted unilateral rescission in 1988 was ineffective; it could not be cancelled arbitrarily by the commissioners court alone. The opinion did not pass on the particulars of the 1975 by-laws and accepted the county attorney's factual representations without independent verification.

Citations

Statutory and constitutional authorities:

• article 1694, V.T.C.S. (public library service; now Local Gov't Code § 323.011)
• Local Gov't Code § 323.011 (nonsubstantive revision of former article 1694)
• Acts 1987, 70th Leg., ch. 149, at 1129 (nonsubstantive codification)
• Texas Constitution art. XI, § 5 (home-rule city charter authority)
• Local Gov't Code ch. 9 (home-rule cities)
• Texas Constitution art. III, § 64(b) (1968 amendment authorizing intergovernmental contracts)
• Interlocal Cooperation Act, V.T.C.S. art. 4413(32c), § 4(a) (authority of local governments to contract with each other)
• V.T.C.S. art. 4413(32c), § 3(2) (library services included in "governmental functions and services")
• V.T.C.S. art. 4413(32c), § 7 (Act cumulative of other laws)

Cases:

• Forwood v. City of Taylor, 214 S.W.2d 282 (Tex. 1948) (home-rule city charter authority)
• Kutzschbach v. Williamson County, 118 S.W.2d 930 (Tex. Civ. App. - Austin 1938, writ dism'd) (later suit ratified an ultra vires county contract)
• Williams v. Pure Oil Co., 78 S.W.2d 929 (Tex. 1935) (ratification of contract)
• Mobile Electric Co. v. City of Mobile, 79 So. 39 (Ala. 1918) (municipal ratification)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-1095
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1989/jm1095.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor OCR errors may remain; the linked PDF is authoritative. (The scan's first line mis-renders the opinion number as "JR-1095"; the running headers on later pages correctly show "JM-1095.")

THE ATTORNEY GENERAL OF TEXAS

September 18, 1989

Honorable Elizabeth C. Jandt
Guadalupe County Attorney
105-A North Austin
Seguin, Texas 78155

Opinion No. JM-1095

Re: Validity of contract for library services (RQ-1647)

Dear Ms. Jandt:

You have asked several questions about a 1964 contract for library services executed by both the City of Seguin (the city) and Guadalupe County (the county) as parties, as well as by the Board of Trustees of the Seguin and Guadalupe County Library (the board).

The contract, you advise, recites that the county theretofore established the board to supervise the erection of a library building and to manage the library to be housed there. By the terms of the agreement, the board agreed to render free library service for all Guadalupe County under the authority of article 1694, V.T.C.S. The provisions of that statute are now embodied in section 323.011 of the Local Government Code, a nonsubstantive revision of the former law. See Acts 1987, 70th Leg., ch. 149, at 1129.

For its part, the city agreed, among other things, to the erection of the building on city-controlled and city-maintained property, and promised to relinquish to the board, as necessary, control of the grounds (which the city would continue to maintain nevertheless). According to the agreement, you explain, the board was to be appointed by the commissioners court of the county "with the consent and approval" of the city council. The board was to regularly furnish the city and county with financial statements and submit budgets for their approval. The city and county expressed an intention to undertake certain financial obligations to support the board's operations.

In 1975, we understand, certain "by-laws" proposed by the board were adopted by both the city and the county as "amendments to the contract," altering, among other things, the manner in which board members were selected. In 1988, however, the commissioners court of the county voted to rescind the "by-law" amendments. The city has not joined the county in that action, nor has the board agreed to it.

You ask, first, about the validity of the 1964 agreement; second, about the validity of the 1975 "by-law" amendments to the agreement; third, about the effect upon the arrangement of the 1971 enactment of the Interlocal Cooperation Act; and, finally, about the effect of the 1988 rescission vote by the county commissioners.[1] We need not address your first question about the original validity of the 1964 agreement because we have concluded that the 1975 adoption of the "by-law" amendments to the agreement amounted to ratification of an arrangement sanctioned by the Interlocal Cooperation Act in 1975, whether or not the arrangement was sanctioned by law prior to the enactment of that statute.

The City of Seguin has been a home-rule city since 1971. Home-rule cities have general authority to include in their charters any power so long as it is not inconsistent with the constitution or general laws enacted by the legislature. Tex. Const. art. XI, § 5; Local Gov't Code ch. 9; Forwood v. City of Taylor, 214 S.W.2d 282 (Tex. 1948). The powers of counties are not so far-reaching and are often said to depend on authorization by the constitution or the legislature. See 35 D. Brooks, County and Special District Law § 5.11 at 151 (Texas Practice 1989).

In 1968 the Texas Constitution was amended to add article III, section 64(b), reading:

(b) The county government, or any political subdivision(s) comprising or located therein, may contract one with another for the performance of governmental functions required or authorized by this Constitution or the Laws of this State, under such terms and conditions as the Legislature may prescribe. No person acting under a contract made pursuant to this Subsection (b) shall be deemed to hold more than one office of honor, trust or profit or more than one civil office of emolument. The term "governmental functions," as it relates to counties, includes all duties, activities and operations of statewide importance in which the county acts for the State, as well as of local importance, whether required or authorized by this Constitution or the Laws of this State.[2]

And in 1971, the legislature enacted the Interlocal Cooperation Act, specifying that

Any local government may contract or agree with one or more local governments to perform governmental functions and services under terms of this Act.

V.T.C.S. art. 4413(32c), § 4(a). Library services were expressly included in the definition of "governmental functions and services." Id. § 3(2).

Thus, at the time the 1975 "by-law" amendments to the contract were adopted, both the city and the county possessed full authority to contract with each other for the establishment and operation of a public library, whether or not they possessed it before that time. The provisions of the Interlocal Cooperation Act were made "cumulative of all other laws or parts of laws, general or special." Id. § 7.

If we assume that the contract between the city and the county was unenforceable and void at the time it was made in 1964 because one or the other (or both) of them was acting ultra vires, still, counties and cities may ratify a contract which they might lawfully make at the time of such ratification although they had no such power when the contract was executed. See 56 Am. Jur. 2d Municipal Corporations, Counties, and Other Political Subdivisions § 509; 14 Tex. Jur. 3d Contracts § 144 at 243.

In Kutzschbach v. Williamson County, 118 S.W.2d 930 (Tex. Civ. App. - Austin 1938, writ dism'd), the commissioners court, without a written contract or written request from the owner of the land, entered an order that certain terracing work be done although a statute permitted such county work only "after request in writing by the owner of the land." (There was, instead, merely an oral agreement struck by the land owner and one of the commissioners.) Thus, the contract was ultra vires, but when the land owner refused to pay for the work, the commissioners court instituted suit, which, according to the appellate court, amounted to a ratification of the contract, rendering it valid. See also Williams v. Pure Oil Co., 78 S.W.2d 929 (Tex. 1935); Mobile Electric Co. v. City of Mobile, 79 So. 39 (Ala. 1918).

In our opinion, by adopting the "by-law" amendments to the 1964 agreement in 1975, after the passage of the Interlocal Cooperation Act permitted such contracts to be legally made, the county and the city confirmed and ratified their arrangement, as modified by the "by-law" amendments, curing any ultra vires defect that might have caused the original agreement to be unenforceable.

We do not pass upon the particulars of the 1975 "by-laws" amendments. We merely advise that it was within the power of the city and county in 1975 to revise their pre-existing agreement and, by doing so, to ratify and validate the arrangement between them.

On the basis of the information furnished us, it appears that the attempted unilateral rescission of the agreement by the county commissioners court in 1988 was ineffective. Assuming that the original 1964 contract was invalid as ultra vires, it was originally subject to disaffirmance at the election of the county. But after the county elected in 1975 to affirm and ratify the agreement by adopting the "by-law" amendments thereto, the arrangement was thereafter the subject of a binding contract that could not be cancelled arbitrarily by the commissioners court alone. See 14 Tex. Jur. 3d Contracts §§ 322-328 at 546; 10 Tex. Jur. 3d Cancellation and Reformation of Instruments § 53 at 557.

SUMMARY

It was within the power of the City of Seguin and the County of Guadalupe in 1975 to revise and ratify a pre-existing 1964 agreement between them regarding library services. Even if the original 1964 agreement between them was originally invalid as ultra vires, ratification in 1975 was effective because the Interlocal Cooperation Act authorizing such agreements had become law. After such ratification, the agreement was not subject to unilateral rescission and cancellation by the county.

JIM MATTOX
Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Bruce Youngblood
Assistant Attorney General

Footnotes

[1] Our response to your request is based upon the above-cited allegations of fact reported to us. It should not be construed as a confirmation of their accuracy. The attorney general does not determine fact disputes in the opinion process. Our conclusions are not based on an independent examination of the contract and other instruments supplied with your request. We have made no independent legal analysis of their effect but have, instead, for purposes of this opinion, accepted your representation of the facts surrounding them and their intended legal consequences.

[2] Some confusion exists as to whether subsection (b) originally applied to all counties or only to those counties (Tarrant, El Paso) to which subsection (a) applied, but the matter was mooted in 1970 when subsection (a) was amended to apply to all counties. See Braden, The Constitution of the State of Texas: An Annotated and Comparative Analysis, at 294 (1977).