Opinion 98 - 1

COUNTIES -- Powers and Duties (contract with public authority for transportation services for Medicaid clients)

PUBLIC CONTRACTS -- Contracts Not Requiring Bidding (contract with a public authority for transportation of Medicaid clients)

GENERAL MUNICIPAL LAW, §§99-r, 103; SOCIAL SERVICE LAW, §365-a: Pursuant to General Municipal Law, §99-r, a county, by direct negotiation and without competitive bidding, may contract with a public authority for transportation services, which the county provides pursuant to the Social Services Law and regulations, for Medicaid clients.

This is in reply to your letter concerning a proposal in connection with the provision of transportation services for Medicaid clients, as provided for by Social Services Law, §365-a and 18 NYCRR §505.10. Under the proposal, a county would contract with a regional transportation authority ("authority") which would act as transportation coordinator and, whenever possible, provide fixed-route transportation on its fleet of buses. Where appropriate, the authority would combine fixed-route transportation with subcontracted taxi or wheelchair transportation. You ask whether the county may enter into such a contract without competitive bidding, pursuant to the authority set forth in General Municipal Law, §99-r. For purposes of this opinion, we will assume that the authority is authorized to provide such a contracted service as part of its corporate powers and that the proposal is permissible under the above-cited social services statute and regulations.

General Municipal Law, §103 states that, except as otherwise expressly provided by act of the Legislature or by local law adopted prior to September 1, 1953, all contracts for public work of a political subdivision involving an expenditure in excess of $20,000 and all purchase contracts of a political subdivision involving an expenditure in excess of $10,000 must be awarded pursuant to the competitive bidding requirements set forth in that section. This Office has expressed the opinion that, generally, contracts for transportation services are subject to the competitive bidding requirements of section 103 (see, e.g., 33 Opns St Comp, 1977, p 164; 1974 Opns St Comp No. 73-1189, unreported; 23 Opns St Comp, 1967, p 654; 21 Opns St Comp, 1966, p 745; cf. 22 Opns St Comp, 1966, p 228; Amherst v Gross, 80 AD2d 719, 437 NYS2d 137, holding that ambulance services fall within the professional services exception to competitive bidding).

Section 99-r of the General Municipal Law provides as follows:

Notwithstanding any other provisions of law to the contrary, the governing board of any municipal corporation may enter into agreements and/or contracts with any state agency including any department, board, bureau, commission, division, office, council, committee, or officer of the state, whether permanent or temporary, or a public benefit corporation or public authority, and any unit of the state university of New York, pursuant to and consistent with sections three hundred fifty-five and sixty-three hundred one of the education law within or without such municipal corporation to provide water supply, street sweeping or maintenance, sidewalk maintenance, drainage, sewage disposal or any other services of government not regularly provided to the public as a part of general government services. Such state agency or unit of the state university of New York, within the limits of any specific statutory appropriation authorized and made available therefor by the legislature or by the governing body responsible for the operation of such state agency or unit of the state university of New York may contract with any municipal corporation for such services as herein provided. Any such contract may be entered into by direct negotiations and shall not be subject to the provisions of section one hundred three of this chapter. (Emphasis added).

We believe the language of section 99-r clearly indicates that the governing board of a municipal corporation may enter into agreements "to provide" certain services to state agencies, public benefit corporations, public authorities and units of the State University. This conclusion is supported by the reference in section 99-r to "appropriation(s) ... available" to pay for municipal services provided to the State or units of the State University (see also Governor's Bill Jacket, L 1991, ch 637, Letter of July 10, 1991 to the Honorable Elizabeth D. Moore, Counsel to the Governor, from the New York State Legislative Commission on Rural Resources, at whose request the bill was introduced, recommending the enactment of section 99-r and characterizing the bill as relating to services "provided by the municipality"). It is less clear, however, whether the statute also authorizes contracts in which a municipal corporation receives services provided by the State, a public benefit corporation, public authority or unit of the State University.

It is a general rule of statutory construction that, if possible, all parts of an enactment shall be harmonized with each other, and meaning and effect given to all provisions of the statute (McKinney's Statutes, §98). A court, in interpreting a statute, must assume that the Legislature did not deliberately place in the statute a phrase intended to serve no purpose, but must read each word and give it a distinct and consistent meaning (id.; see Delaware County Electric Cooperative, Inc. v Power Authority of the State of New York, 96 AD2d 154, 468 NYS2d 233; Grich v Wood & Hyde Leather Co., Inc., 74 AD2d 183, 427 NYS2d 96). No part of a statute should be considered meaningless or superfluous unless that conclusion is inevitable (McKinney's Statutes, §231; Albano v Kirby, 36 NY2d 526, 369 NYS2d 655; Grich v Wood & Hyde Leather Co., Inc., supra, 74 AD2d 183, 427 NYS2d 96; Direen Operating Corp. v State Tax Commission, 46 AD2d 191, 361 NYS2d 736).

Applying these rules of statutory construction here, we note that the final sentence of the section creates an exception to the provisions of General Municipal Law, §103 and provides that municipal corporations may enter into a contract by direct negotiations in lieu of competitive bidding. The inclusion of this exception implies that the Legislature, in enacting section 99-r, anticipated that municipal corporations would enter into contracts involving the expenditure of moneys to receive services. In our opinion, the final sentence in section 99-r must be given meaning and effect. We do not find that the express language of section 99-r leads to an inevitable conclusion that the final sentence cannot be reconciled with the rest of the section, or that the express language evinces a clear intent of the Legislature that the contracts authorized by section 99-r include only those by which a municipal corporation provides a service.

Several memoranda in the Governor's Bill Jacket for section 99-r support this conclusion. The legislation was characterized as "providing both parties broad power to review their common services and to contract with each other where there may be a savings to State or local taxpayers" (Memorandum, NYS Office of General Services, July 16, 1991). It was also characterized as intended to "reduce the cost of government by enabling municipalities and State agencies (and other entities of the State) to enter into agreements and/or contracts with each other for the coordinated provision of services" (Memorandum Division of the Budget, July 18, 1991; see also Memorandum to the Governor, NYS Association of Counties, July 12, 1991; but see Letter to Honorable Elizabeth D. Moore, Counsel to the Governor from the Legislative Commission on Rural Resources, supra).

It is our opinion, therefore, that section 99-r authorizes contracts by which a state agency, public benefit corporation, public authority or unit of the State University provides a service of government "not regularly provided to the public as part of general government services" to a municipal corporation and that such contracts are excepted from the competitive bidding requirements of General Municipal Law, §103. Accordingly, if the contract which the county anticipates entering into with the authority is for "services of government not regularly provided to the public as a part of general government services", as provided in section 99-r, then it is our opinion that the county may enter into the contract and competitive bidding would not be required.

The phrase "general government services" is not defined statutorily. However, the legislative history of the bill indicates that the phrase was intended to apply to services "regularly provided to all properties and individuals within the municipality" (Governor's Bill Jacket for L 1991, ch 637, Letter to Honorable Elizabeth D. Moore, Counsel to the Governor from Senator Charles D. Cook, July 10, 1991). Clearly, that phrase includes, inter alia, fire and police protection.⁽¹⁾ It is further our opinion that transportation services, such as those which the county provides pursuant to Social Services Law, §365-a, cannot be characterized as "regularly provided to the public as part of general government services" within the context of section 99-r since they are not regularly provided or available to all individuals within the county, but rather only to a class of county residents.

Accordingly, it is our opinion that, pursuant to General Municipal Law, §99-r, a county may, by direct negotiation and without competitive bidding, contract with a public authority to receive transportation services, which the county provides pursuant to the Social Services Law and regulations, for Medicaid clients⁽²⁾.

January 13, 1998
Zachary L. Karmen, Esq., Chief Welfare Attorney
County of Onondaga

Barry M. Shulman, Esq., Counsel
Central New York Regional Transportation Authority

1. In this regard, we note that the original version of the bill which became section 99-r expressly authorized contracts for "police services ... fire protection ... or certain other services of government" (S. 4228/A. 6884, 1991). The elimination of the specific reference to police and fire service is a clear indication that these services of government are among those considered "regularly provided to the public as part of general government services" and, therefore, excluded from section 99-r.

2. In view of this conclusion, we need not address whether any of the proposed services fall within any other exception to competitive bidding (see, e.g., 22 Opns St Comp, 1966, supra; Amherst v Gross, supra).