Kansas Attorney General Opinion 2017-012

September 1, 2017
ATTORNEY GENERAL OPINION NO. 2017- 12
Michael C. Robinson
Office of the Stafford County Counselor
209 N. Broadway, 1st Floor
P.O. Box 66
St. John, Kansas 67576
Re: 	Counties and County Officers‒Hospitals and Related Facilities‒County
Hospitals, Termination of Operations; Procedure; Election; Disposition of
Property; Abolition of Board; Transfer of Moneys to County
State Departments; Public Officers and Employees‒Public Officers and
Employees‒Conflict of Interest‒Statement of Substantial Interest‒Making
or Participating in Certain Contracts Prohibited; Exceptions; Abstaining from
Action
Synopsis: 	K.S.A. 19-4625 does not specifically address how a county hospital’s debt
should be paid upon termination of operation of the county hospital. It only
provides that moneys remaining in any fund of the county hospital after
termination of its operation and after payment and performance of any
obligation thereof shall be transferred to the county general fund .
A hospital board trustee who has a substantial interest in a business that
contracts with the hospital does not violate K.S.A. 75-4304 if the hospital
board trustee has disclosed the substantial interest and abstained from
any action on the contract. Also, K.S.A. 75-4304(d) allows a hospital board
trustee/owner to make or participate in the making of a contract that is
subject to the competitive bidding process and a contract for which the price
or rate is fixed by law. Cited herein: K.S.A. 19-4625; 19-4626; 75-4301a;
75-4304; and 75-4305.
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Michael C. Robinson
Page 2
Dear Mr. Robinson:
As county counselor for Stafford County, you request our opinion on two questions. First,
you ask whether K.S.A. 19-4625, specifically subsection (d), addresses how a county
hospital’s debt should be paid upon termination of operations of the county hospital.
K.S.A. 19-4625 provides the standard under which any county commission may close
and terminate operations of a county hospital and the procedure that must be followed to
terminate operations. 	In a nutshell, when the county commission by resolution shall
determine it is in the best interest of the county to close and terminate the operation of
the hospital, or when 5% of the qualified electors of the county by petition requests the
county hospital be closed, then an election on the proposition determines whether the
hospital will close 1 or continue to operate. 2 If a majority of the votes cast at the election
are in favor of closure, then the county commission may sell or donate, and transfer and
convey such hospital and all real and personal property owned and used in connection
with the operation of the hospital to a city, hospital district or corporation. 3 	The county
commission and the hospital board remain liable for payment of the normal and usual
operating expenses of the hospital until the operation of the hospital is terminated. 4
Finally, K.S.A. 19-4625(d) provides that once the hospital is closed, the hospital board is
abolished and any balance of moneys remaining in any fund after payment and
performance of any obligation shall be transferred to the county general fund.
In answer to your first question, K.S.A. 19-4625 does not specifically address how a
county hospital’s debt should be paid upon termination of operation of the county hospital.
It only provides that moneys remaining in any fund of the county hospital after
termination of its operation and after payment and performance of any obligation
thereof shall be transferred to the county general fund. 5
Second, you also ask whether it is a conflict of interest for a county hospital board
trustee to be an owner of a company with which the hospital signed a written
agreement promising to pay a stated sum of money on a specified date or on demand.
Whether a conflict of interest exists is a case-specific inquiry that depends on the
particular facts of a particular case.
K.S.A. 75-4304 provides:
1 K.S.A. 19-4625(a).
2 K.S.A. 19-4625(b).
3 K.S.A. 19-4625(b).
4 K.S.A. 19-4625(c).
5 Cf. K.S.A. 19-4626, which authorizes the board of county commissioners “to issue no-fund warrants for
the purpose of raising money for financing any insufficiency in the operation and maintenance budget of
the hospital during such [budget] year and is hereby authorized to expend such money for such purposes.”

Michael C. Robinson
Page 3
(a) No local governmental officer or employee shall, in the capacity of
such an officer or employee, make or participate in the making of a
contract with any person or business by which the officer or employee is
employed or in whose business the officer or employee has a substantial
interest.
(b) No person or business shall enter into any contract where any local
governmental officer or employee, acting in that capacity, is a signatory
to or a participant in the making of the contract and is employed by or
has a substantial interest in the person or business.
(c) 	A 	local 	governmental 	officer 	or 	employee 	does 	not 	make 	or
participate in the making of a contract if the officer or employee abstains
from any action in regard to the contract.
(d) This section shall not apply to the following:
(1) Contracts let after competitive bidding has been advertised for
by published notice; and
(2) contracts for property or services for which the price or rate is
fixed by law.
(e) Any local governmental officer or employee who is convicted of
violating this section shall forfeit the office or employment.
Generally, K.S.A. 75-4304(a) prohibits public officers from making or participating in
the making of contracts in which they have a substantial interest. 	A hospital board
trustee is a public officer.6 Substantial interest is defined in K.S.A. 75-4301a. K.S.A.
75-4305 requires a disclosure of substantial interest for any local governmental officer
or employee who has not filed a statement of substantial interest. 	Once it has been
established that the public officer has a substantial interest, one would next determine
if any of the three exceptions to a conflict of interest for making or participating in the
making of a contract apply.
K.S.A. 75-4304(c) provides that “a local governmental [public] officer or employee
does not make or participate in the making of a contract if the officer or employee
abstains from any action in regard to the contract.” Subsection (d) provides that a
public officer or employee may make or participate in contracts let after competitive
bidding has been advertised for by published notice, and in contracts for property or
services for which the price or rate is fixed by law.
6 See K.S.A. 19-4605, Attorney General Opinion Nos. 2012-15 and 1983-11.

Michael C. Robinson
Page 4
Thus, if the hospital board trustee/owner has disclosed the substantial interest and
abstained from any action on the contract, he or she does not make or participate in
the making of a contract as prohibited by K.S.A. 75-4304. 	Also, K.S.A. 75-4304(d)
allows a hospital board trustee/owner to make or participate in the making of a contract
that is subject to the competitive bidding process and a contract for which the price or
rate is fixed by law.
Sincerely,
Derek Schmidt
Kansas Attorney General
Athena E. Andaya
Deputy Attorney General
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