Kansas Attorney General Opinion 1992-045

ROBERT T. STEPHAN
ATTORNEY GENERAL
April 3, 1992
ATTORNEY GENERAL OPINION NO. 92-45
Wilson E. Speer
General Counsel for Water District
No. 1 of Johnson County
201 N. Cherry Street
P.O. Box 1000
Olathe, Kansas 66061
Re: Counties and County Officers--Water Supply and
Distribution Districts--Rules and Regulations
Relating to Use of Water; Cost of Extensions
Synopsis: For contracts under $25,000, a water district has
the discretion to promulgate regulations that allow
an applicant for a water main extension to
negotiate costs directly with a contractor. K.S.A.
19-3514 however requires that the resulting
contract must be made by the water district board.
A water district board cannot prequalify bidders
for the purpose of letting out a public contact
pursuant to K.S.A. 19-3516. Cited herein: K.S.A.
19-214; 19-215; 19-216; 19-3514; 19-3516.
Dear Mr. Speer:
As general counsel to Johnson county water district no. 1 you
make several inquiries dealing with the interpretation and
application of K.S.A. 19-3514 and 19-3516 as each relates to
the construction of water main extensions.
You indicate that water district no. 1 of Johnson county is
the only urban water utility ever created under K.S.A. 19-3501

et seq., and that it is a quasi-municipal corporation and
a political subdivision of the state of Kansas that serves
approximately 96,600 account customers. Currently the rules
and regulations of the water district require a landowner or
developer seeking the extension of a distribution main to file
a line extension petition and agreement with the water
district accompanied by a cash deposit or a letter of credit
in the amount of the construction cost as estimated by the
water district. The filed petition and agreement becomes a
contractual agreement upon acceptance and execution by the
water district's general manager. The district then
undertakes to have the line extension constructed by an
independent contractor who has been previously selected
through the process of competitive bidding to construct such
line extensions for a period of approximately one year.
As background information you state that for several years
developers have contended that they could have the line
extensions constructed by their own contractors under the same
water district specifications at a lower cost than the unit
prices charged by the district under its method of engaging a
single contractor on an annual basis. This contention has
resulted in a proposal by the Kansas City homebuilders
association that involves individual developers, as applicants
for water main extensions, negotiating the costs with
independent contractors that have been prequalified by the
district. The change contemplates the creation of a
prequalified pool of engineers and contractors from which a
developer could choose for purposes of a particular contract.
While financial arrangements for a particular job would be
negotiated between the contractor and the developer, thus
allowing market forces to control costs, control regarding
design and workmanship would remain with the water district.
At issue is whether the following changes are authorized by
the statutes, specifically K.S.A. 19-3514 and 19-3516.
1. May the water district change the rules and regulations to
allow project cost negotiation between the applicant and the
contractor for contracts under $25,000?
2. Must the negotiation result in a contract between the
water district and the contractor rather than the initial
negotiating parties [discussed in question no. 1]?
3. May the water district prequalify a group of bidders for
construction projects under $25,000?

4. Does the water district's current procedure of contracting
all projects with one contractor in an annual contract comply
with the statute?
Water districts can exercise only those powers granted them by
statute, 94 C.J.S. Waters § 243(5) (1956). We must thus
examine what powers and duties the statutes impose. K.S.A.
19-3514 requires the water district board to adopt public
rules and regulations dealing with the construction of water
main extensions. It states in part:
"Upon application for water main
extensions and full compliance with the
rules and regulations by the applicant,
the board shall cause to be constructed
such extensions which shall become the
property of the water district. Upon
completion of construction, the actual
cost thereof shall be determined by the
board and any excess in an advanced
payment shall be returned to the applicant
or any shortage therein collected by the
board."
The statute requires the water district board to contract for
the construction sought by an applicant. The board must then
determine the costs and refund any excess payment or collect
any shortage of payment advanced by the applicant. K.S.A.
19-3516, subsection (d), states in part:
"The water district board, by a majority
vote of the members thereof, may contract
for repairs, alterations, extensions or
improvements of the water supply and
distribution system and issue revenue
bonds to pay the cost thereof without
submitting to a vote of the electors of
such water district the proposal to
contract for the making of such repairs,
alterations, extension and improvements
and to issue revenue bonds to pay the
costs thereof.
"All contracts for any construction of all
or part of the water system, or for
repairs, extensions, enlargements or
improvements to any such water supply and
distribution system created under this

act, the cost of which exceeds $25,000
shall be awarded on a public letting by
the water district board to the lowest
responsible bidder, and in the manner
provided by K.S.A. 19-214, 19-215 and
19-216, and amendments thereto. . . ."
Subsection (d) of K.S.A. 19-3516 requires contracts exceeding
$25,000 to be awarded on a public letting to the lowest
responsible bidder, reiterated in K.S.A. 19-214, with the
notice requirements set in K.S.A. 19-215 and after display of
specific plans and specifications, K.S.A. 19-216. The notice
requirement is extended if contract costs exceed $100,000 and
provisions are made for an emergency need.
Neither of these statutes precludes the water district board
from changing the rules and regulations to allow cost
negotiation between the applicant needing the water extension
and the contractor who will build it when the contract costs
are under $25,000. When over $25,000 negotiation such as
that suggested cannot be had because K.S.A. 19-3516 requires
the contract be awarded by a public letting in the manner
provided by K.S.A. 19-214, 19-215 and 19-216. See Attorney
General Opinion No. 81-65 discussing these competitive bidding
requirement statutes.
Your second question is whether the water district board must
be party to a resulting contract. K.S.A. 19-3514 requires
that the "board cause to be constructed," necessarily making
the water district board responsible as the contracting party
who must determine the costs, refund any excess and collect
any shortage of costs.
The third issue involves prequalification of bidders when
the contract does not exceed $25,000. In our opinion
prequalification or prescreening of bidders for the
purposes of letting a public contract is not in the best
interest of the state, regardless of the contract amount in
question. Prequalification is contrary to the concept of
competitive bidding and inures itself to allegations of
impropriety or favoritism. The issue is discussed extensively
in Attorney General Opinion No. 85-168 dealing with whether a
county may prescreen bidders on the construction of county
or public buildings, roads and bridges. We concluded that
though the statute in question did not address prescreening
of bidders, its language requiring the lowest responsible
bidder to be selected indicated a strong public policy against
collusive contracts and favoritism. See also Attorney

General Opinion No. 88-45 dealing with whether a rural water
district must seek competitive bids.
The fourth question concerns the districts' current practice
of letting all projects or contracts to one contractor in an
annual contract. K.S.A. 19-3516, subsection (d) mandates that
all contracts, exceeding 25,000 be awarded to "the lowest
responsible bidder" in the manner prescribed by K.S.A. 19-214,
19-215 and 19-216. The "lowest responsible bidder" standard
is reiterated in K.S.A. 19-214, followed by procedural
requirements of notice (19-215) and display of plans and
specifications (19-216). Given that the procedural
requirements are not in question here, the current procedure
used by the water district board is authorized by the statute
if the procedure meets the standard of letting all the
contracts to the lowest responsible bidder. If the current
procedure does not result in letting all contracts to the
lowest responsible bidder because the procedure effectively
eliminates other competitive bidders, then the procedure does
not comply with the requirements of K.S.A. 19-3516, subsection
(d). Whether the procedure meets the mandated standard is
therefore a question of fact and for this reason cannot be
addressed in this opinion.
The interpretation of a statute is a question of law and it is
the court's function to interpret the statute to give it the
intended effect. Unified School District No. 279 v. Sec'y
of the Kansas Department of Human Resources, 247 Kan. 519,
524 (1990). The purpose and intent of the legislature govern
when that intent can be ascertained from the statute. Id.
at 527. K.S.A. 19-3514 and 19-3516's intended effect is
discernible from the face of the statutes. They, in our
opinion authorize the water district to promulgate rules and
regulations that allow an applicant to negotiate costs
directly with the contractor when the contract in question is
under $25,000. The statutes however require that the
resulting contract be made by the board. Additionally, we
find that prequalification of bidders for the purposes of
letting a public contract is contrary to the spirit of the
statutes, regardless of the amount of the contract in question.
Very truly yours,
ROBERT T. STEPHAN
Attorney General of Kansas
Guen Easley
Assistant Attorney General
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