Opinion 92-33


This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.


MUNICIPAL FUNDS -- Publicity Fund (maximum amount appropriated to in town); (expenditures to fund contract with chamber of commerce)
PARK DISTRICTS -- Powers and Duties (expenditures for promotional services)
LOCAL LAWS -- Pre-emption (special district matters)
PUBLIC CONTRACTS -- Professional Services (promotional and publicity services); (procedures for obtaining) -- Contracts Not Requiring Bidding (promotional and publicity services); (procedures for obtaining)

TOWN LAW, §64(14)(a): A town board by resolution may establish a publicity fund and appropriate up to $3,000 annually therefor. The annual appropriation may be increased to an amount of not more than $10,000 by resolution subject to permissive referendum and to an amount in excess of $10,000 by resolution subject to mandatory referendum. Towns may expend publicity fund moneys for the purpose of contracting with a local chamber of commerce for publicity services.
LAWS OF 1928, CHAPTER 477, AS AMENDED; MUNICIPAL HOME RULE LAW, §10(1)(ii)(d)(3): A town on behalf of the park district established by L 1928, ch 477, as amended, may expend up to $50,000 annually for park district promotional purposes and no referendum pursuant to Town Law, §64(14)(a) is required. The town may not adopt a local law increasing the maximum amount that may be expended on behalf of the park district for purposes of promoting the district.
GENERAL MUNICIPAL LAW, §§103, 104-b: A contract for publicity and promotional services involving development and implementation of marketing strategies would fall within the professional services exception to competitive bidding. The services, however, must be procured in accordance with the municipality's procurement policies and procedures.

You ask whether an appropriation in excess of $10,000 for publicity, promotional and other related services to be rendered by a chamber of commerce on behalf of a town and a park district (hereinafter, the "park district") would be subject to a mandatory referendum pursuant to Town Law, §64(14)(a). You also ask whether a contract for the services to be rendered by the chamber of commerce may be awarded only after compliance with competitive bidding requirements of General Municipal Law, §103. The park district was established pursuant to special legislation and encompasses the portion of the town outside the area of one of the villages within the town (see L 1928 ch 477, as amended; L 1930 ch 119, as amended).

In this instance, the State legislation authorizing the establishment of the park district was amended in 1960 to authorize the town board and the park commission of the district to expend annually a maximum of $20,000 to pay for services to promote the district "as the place for holding the convention or meeting of any organization or society and for such additional purposes as may tend to promote the general, commercial and industrial welfare of such district ..." (L 1960, ch 849). The authority accorded by the 1960 amendment was subject to a mandatory referendum within the park district, but the referendum requirement was subsequently repealed (see L 1966, ch 697, §2). Later amendments also increased the maximum expenditure for park district promotional purposes to $35,000 (L 1976, ch 412), and then to $50,000 (L 1983, ch 191). The cost of these expenditures is a charge against the real property within the park district (see L 1966, ch 697, §1; see also The Sisters of the Resurrection, New York v Daby, 129 Misc 2d 879, 494 NYS2d 279).

Separate and apart from the specific authority contained in the park district's enabling legislation, Town Law, §64(14)(a) (added L 1957, ch 629; see also L 1932, ch 634) provides that a town board, by resolution, may establish a publicity fund, and may appropriate up to $3,000 annually therefor. That section further provides that the annual appropriation may be increased to an amount of not more than $10,000 by resolution subject to permissive referendum, and to an amount in excess of $10,000 by resolution subject to mandatory referendum. The amount so appropriated is a town-wide charge unless otherwise provided by law (see Town Law, §64[22]).

Section 64(14)(a) provides that the moneys in a publicity fund may be expended for the purpose of:

advertising the advantages of such town as a winter or summer resort, or for commemoration programs of historical events, or otherwise, including the necessary and legitimate expense of securing a designation of such town as the place for holding the convention or meeting of any organization or society and for such additional purposes as may tend to promote the general, commercial and industrial welfare of the town.

Thus, we have previously concluded that towns may expend publicity fund moneys for the purpose of contracting with a local chamber of commerce for publicity services (see, e.g., 1979 Opns St Comp No. 79-94, p 17; 1978 Opns St Comp No. 78-27, unreported; see also 31 Opns St Comp, 1975, p 53). The contract should be in writing, detail the services to be performed, with such services being limited to publicizing the town, and provide for a reasonable payment for the services. It is our opinion that in the absence of any other provision of law authorizing a town to appropriate moneys for the purpose of publicizing and promoting the town (see, e.g., General Municipal Law, §965, authorizing appropriations for the promotion of foreign trade zones), the moneys paid by a town under a contract to provide such services must be charged to the town's publicity fund appropriation.

Although Town Law, §64(14)(a) and the park district's enabling legislation authorize similar types of promotional expenditures, these provisions were enacted separately and the expenditures which they authorize are made for, and are a charge against, different areas of the town. Therefore, it is our opinion that the promotional expenditures permitted to be made on behalf of the park district are separate and in addition to those that may be made on behalf of the town pursuant to section 64(14)(a). Further, since the enabling legislation had its own referendum requirement which was repealed, and does not refer to the referendum requirements of section 64(14)(a), it is also our opinion that the referendum requirements of section 64(14)(a) are inapplicable to promotional expenditures made on behalf of the park district pursuant to the enabling legislation. Moreover, we believe that since the park district's enabling legislation does not appear to authorize promotional expenditures for the district in excess of the maximum amount prescribed therein, the maximum amount that may be expended on a contract to promote the district is $50,000 per year, unless the town has authority to supersede the enabling legislation by local law.

A town is authorized to adopt and amend local laws not inconsistent with the constitution or any general law relating to, inter alia, "its property, affairs or government" (Municipal Home Rule Law, §10[1][i]). In this instance, the park district's enabling legislation is not a "general law" because in terms and effect it does not apply alike to all towns (see Municipal Home Rule Law, §2[5], [12]). Since the park district is deemed a special district under the Town Law (L 1966, ch 697, §1), it is a "special administrative area" and "not a municipal entity apart from the" town (see, e.g., Raffone v. Town of Islip, 85 AD2d 597, 598, 444 NYS2d 700, 701). Consequently, a local law increasing the maximum amount that may be expended for district promotional purposes, in our opinion, would relate to the "property, affairs or government" of the town (cf. 1990 Opns St Comp No. 90-39, p 88, pertaining to a town's authority to adopt local laws relating to fire districts).

The doctrine of pre-emption, however, represents a fundamental limitation on home rule powers (see, e.g., Inc. Village of Nyack v Daytop Village, 78 NY2d 500, 577 NYS2d 215; Albany Area Builders v Town of Guilderland, 74 NY2d 372, 547 NYS2d 627). As stated in Daytop Village, supra:

Where the State has demonstrated its intent to preempt an entire field and preclude any further local regulation, [a] local law regulating the same subject matter is considered inconsistent and will not be given effect [citations omitted].

* * * *

The Legislature's intent to so preempt a particular area can be inferred from a declaration of policy or from a comprehensive or detailed scheme in a given area [citations omitted]. (78 NY2d at 505, 577 NYS2d at 217).

In this instance, the park district's enabling legislation provides that "... except as otherwise provided in this act, the town board ... shall govern such district in the same manner as provided in the town law relating to town improvement districts ..." (L 1966, ch 697, §1). Town improvement districts are generally governed pursuant to articles 12 and 12-a of the Town Law, and we have concluded that these articles establish a comprehensive legislative scheme and evince an intent to preempt local laws relating to the establishment, financing and operation of town improvement districts (see 1986 Opns St Comp No. 86-53, p 84; see also Coconato v Town of Esopus, 152 AD2d 39, 547 NYS2d 953, lv den 76 NY2d 701, 558 NYS2d 891; Municipal Home Rule Law, §10[1][ii][d][3][1], prohibiting a town pursuant to that provision from superseding a State "statute" relating to an improvement district). Thus, we believe that the enabling legislation, by incorporating the provisions of the Town Law, is intended similarly to establish a comprehensive legislative scheme with respect to the establishment, financing and operation of the park district and indicates an intent to pre-empt local legislation. Moreover, by providing that the park district is governed in the same manner as an improvement district under the Town Law "except as otherwise provided in this act" (emphasis supplied), the enabling legislation suggests that the State has reserved to itself the power to legislate with respect to matters set forth therein. Therefore, it is our opinion that the town may not adopt a local law increasing the maximum amount that may be expended for the purpose of promoting the park district.

As to whether a contract for publicity and promotional services is subject to competitive bidding, General Municipal Law, §103 requires that, except as otherwise expressly provided by the State Legislature or by local law adopted prior to September 1, 1953, all contracts for public work of a political subdivision or district therein involving an expenditure of more than $20,000, and all purchase contracts of a political subdivision or district therein involving an expenditure of more than $10,000, shall be awarded to the lowest responsible bidder after public advertisement in the manner prescribed in that section. In addition to statutory exceptions from competitive bidding authorized by the State Legislature (see, e.g., General Municipal Law, §§103[4], 104), there are also several well-established common law exceptions to the requirements of section 103.

One such common law exception is for contracts for professional services (see, e.g., People ex rel. Smith v Flagg, 17 NY 584). Generally, professional services which fall within this exception involve the application of specialized expertise, the use of professional judgment, or a high degree of creativity in the performance of the contract (see People ex rel. Smith, supra; Trane Co. v County of Broome, 76 AD2d 1015, 429 NYS2d 487; Hurd v Erie County, 34 AD2d 289, 310 NYS2d 953; see also 1988 Opns St Comp, No. 88-35, p 65). The courts have also noted that professional service contracts often involve a relationship of personal trust and confidence (see, e.g., Lynd v Heffernan, 286 AD 597, 146 NYS2d 113 mot for lv to app granted 1 NY2d 641, mot to withdraw app granted 1 NY2d 919, 154 NYS2d 976). The primary rationale for this exception is that these services are not the type of "public work" which may be properly the subject of general competition based solely upon compliance with objective, uniform standards set forth in specifications, with an award to the lowest responsible bidder. Therefore, it would be an unreasonable construction of the bidding statute to apply it to these services (see People ex rel. Smith, supra, 17 NY, at p 589; 1A Antieau, Municipal Corporation Law, §10.33).

It has been held that a contract between a county and a not-for-profit corporation to provide a marketing program to promote the county as a convention site falls within the professional services exception (Schulz v Warren County Board of Supervisors, 179 AD2d 118, 581 NYS2d 885). The court stated as follows:

Because the development and implementation of marketing strategies calls for not only specialized skills and expertise but also such intangibles as judgment and discretion, the prudent exercise of which is very often the difference between success and failure, such services are by their nature professional and thus fall outside the realm of competitive bidding (see, 24 Opns St Comp, 1968, at 437-438). (179 AD2d at 123, 581 NYS2d at 888).

In 24 Opns St Comp, 1968, p 437, cited in Schulz, supra, this Office had similarly concluded that publicity services including preparation and placement of newspaper and magazine advertisements and preparation of a publicity brochures would constitute professional services (see also Wickham v Trapani, 26 AD2d 216, 272 NYS2d 6).

Accordingly, a contract for publicity or promotional services involving development and implementation of marketing strategies, such as preparation and placement of advertisements and preparation of a brochure would fall within the professional services exception. It should be noted, however, that contracts for promotional or publicity services may also involve other services, such as printing, which, if separately acquired, would be subject to competitive bidding requirements (cf. 1991 Opns St Comp No. 91-34, p 101; 1977 Opns St Comp No. 77-937, unreported). In those instances, the entire contract would be exempt from competitive bidding as a professional service only if the professional service component is the primary or predominant part of the arrangement and there is an inextricable integration between the professional and other services (see 1988 Opns St Comp No. 88-35, p 65; Pacificorp Capital Inc. v City of New York, 741 F Supp 481). Thus, each proposed arrangement for publicity or promotional services must be critically evaluated to determine whether it involves both professional and other services and, if it does, whether it is exempt applying the above criteria.

Finally, we note that, effective January 1, 1992, the governing board of each political subdivision and any district therein is required to adopt written internal policies and procedures governing all procurements of goods and services not required by law to be made pursuant to competitive bidding requirements, including professional services (General Municipal Law, §104-b). At a minimum, these policies and procedures must provide, inter alia, that when competitive bidding is not required by law, alternative proposals or quotations will be secured by requests for proposals, written or verbal quotations or any other method of procurement which furthers the statutory purposes of new section 104-b (General Municipal Law, §104-b[2][b]). The policies and procedures may also set forth any circumstances when, or types of procurements for which, the solicitation of alternative proposals or quotations will not be in the best interest of the municipality (General Municipal Law, §104-b[2][f]). Accordingly, even when a contract for publicity and promotional services falls within the professional services exception to competitive bidding, such a contract will be subject to the political subdivision's or district's procurement policies and procedures.

Please note that, although you enclosed a proposed publicity contract for our reference, we have not reviewed the same. It is not a function of this Office, in connection with providing advisory opinions to local governments, to review the terms and conditions of specific agreements. Therefore, this opinion addresses only the specific issues raised in your letter.

October 20, 1992
Matthew B. Clark, Supervisor
Town of North Elba