On behalf of the Kentucky Resources Council, Inc. (?Council), we are writing to express our serious reservations concerning the legality of the agreement (Agreement) executed on July 1, 2007 between the Louisville / Jefferson County Metro Government through the Louisville Parks Department and the Trinity High School Foundation (Foundation), which would allow the Foundation to build six tennis courts in Seneca Park on public land and would grant Trinity High School preferential reservation of those courts for practice and events. The Agreement appears to be a franchise or privilege awarded in a manner that violates the Kentucky Constitution.
Under the Agreement, a copy of which was released to the Council on August 18, 2008 under the Kentucky Open Records Act, Trinity High School is accorded a preferential right to use the facility for up to 800 hours per year to the exclusion of the general public, who do not enjoy this privilege. The Foundation is granted the right to construct six (6) tennis courts, including appurtenances such as fences, buildings, parking areas, etc. to its design specifications and based on its needs, with approval, but not design input, from the Parks Department on behalf of the public. For example, according to the Concept Plan, while the maximum parking needed for six tennis courts is thirty-eight (38) spaces, the Foundation has designed a plan to include 124 additional parking spaces, 81 future parking spaces, and a road connecting these spaces to Rock Creek Road. It appears that these extra parking spaces are needed to accommodate tournaments and special events put on by Trinity High School as referenced in the Agreement , and not to accommodate members of the public who wish to use the courts. The Agreement also confers on the Foundation the right to name the complex after the leading donor and erect other plaques on the courts memorializing the Foundation and its donors, another provision of the Agreement that solely benefits the Foundation.
The Agreement does not allow other members of the community who are similarly situated the same rights and opportunities to use public park land, and specifically the tennis court, as are offered to the Foundation and Trinity High School, i.e. preferential access to public property and a public facility in return for the construction of the facility.
There is no serious question but that the Agreement constitutes a franchise or privilege within the meaning of the Kentucky Constitution Section 164. The term franchise as used in Section 164 is a right granted by the government to use public property or to do some act which the party could not do without a grant of government authority. BFI Waste Systems of North America v. Huntington Woods Neighborhood Association, Inc., 134 S.W.3d 624, 630 (Ky. App. 2003). The Agreement is a franchise because it grants rights to the Foundation and Trinity High School to not only use public park land with a first priority claim up to a set number of hours, but also undertake construction of facilities for use by its tennis team on public property that is owned and controlled by the City of Louisville and the Parks Department. In so doing, the school avoids the capital cost of acquisition of private residential or commercial properties for construction of a dedicated facility. These are preferential rights or privileges that are not available to the general public, and any member of the public who sought to exclude the use of park property by others or to undertake construction on park property without such an agreement would be considered a trespasser.
As a franchise, the Agreement appears to violate the state constitution in two distinct respects. First, the 30-year term of the Agreement exceeds that permissible under Section 164 of the Kentucky Constitution, which prohibits the city from granting a franchise or privilege for a term exceeding twenty (20) years. Second, the city neither advertised the intent to confer a franchise or privilege to the high school and foundation nor accepted competitive bids on such a proposal. Kentucky Constitution Section 164 prohibits the granting of a franchise without first advertising the availability of the franchise and receiving public bids for the franchise. According to published reports, the Parks Department did not even hold a public meeting on the project until over one year after the agreement was signed, despite the fact that with a price tag of $650,000 and the addition of a new road, the physical impact of the project on the park landscape is not insignificant. The agreement conflicts with the central purpose of Section 164, which is to compel important rights to be granted publicly and for the highest and best value, and to prevent governmental agencies from granting valuable rights for less than the highest and best value and on a preferential basis. E.M. Bailey Distributing Co. v. Conagra, Inc., 676 S.W.2d 770 (Ky. 1984). Both the 30-year term of the Agreement and the failure to have publicly noticed and competitively bid the proposed franchise, renders the resulting Agreement constitutionally deficient, and void en toto. Hamilton v. Bastin Bros., 224 S.W. 430, 432 (Ky. 1920).
The Council is also concerned in principle that the City has agreed to the use of municipal park property for construction of tennis courts and appurtenances that appear to primarily meets the needs of the Foundation and Trinity High School rather than unmet public need. The Foundation and School benefit significantly by avoiding the capital costs of acquisition of private land for construction of tennis facilities, and a questionable policy precedent is established concerning the management of the limited public parkland in the city. Seneca Park currently has ten (10) tennis courts, the second highest number of tennis courts in all the Louisville Metro Parks, and the highest number of hard courts. In light of this, the dedication of this additional park acreage for six new tennis courts and associated parking spaces (in excess of those typically required), roads, and appurtenances does not seem to meet the needs of the public for more tennis courts at Seneca Park, but instead appears to primarily address Trinity High School needs by dedicating public land on which to construct tennis courts that they need for their private tennis team. Allowing limited public parkland to be dedicated for construction of facilities that are not addressing an unmet public demand, but instead primarily benefit a third-party who has unmet needs for such facilities, does not appear to be sound public policy. To the extent that a third-party wishes to donate funds earmarked for a particular type of recreational facility, the Parks Board should first consider whether the facility is needed to address unmet needs in that park and in the park system. Then, assuming the proposal does address an unmet public need, to the extent that preferential use rights are contemplated being awarded, it must be done through competitive bid and after public notice, and for a term no longer than constit6utionally allowed.
In closing, the Council has serious concerns about the constitutionality of the Agreement and recommends that Metro Louisville and the Metro Parks Department terminate the agreement as being inconsistent with and void under Kentucky law. To avoid this sort of problem in the future and to promote greater transparency in governance of the use of park property, the Council suggests the Parks Department develop a park-wide strategic plan, consistent with Section 164 and other constitutional provisions, that would establish procedures for partnerships with outside entities for construction of facilities that address an unmet public need, and a policy concerning the leasing or grants of preferential use privileges for public facilities within the park system.
Tom FitzGerald, Esq.
Liz Edmondson, Esq.
cc: Hon. Jerry Abramson, Mayor
Hon. Tina Ward Pugh, Metro Council
Hon. Mike OConnell, County Attorney