Kansas Attorney General Opinion 1992-017

ROBERT T. STEPHAN
ATTORNEY GENERAL
February 4, 1992
ATTORNEY GENERAL OPINION NO. 92- 17
R. Douglas Sebelius
Norton County Attorney
105 South Norton Street
P.O. Box 10
Norton, Kansas 67654-0010
John F. McClymont
Attorney for Norton County Hospital Board of Trustees
Ryan, Walter and McClymont, Chartered
120 S. State Street
P.O. Box 364
Norton, Kansas 67654-0364
Re: Counties and County Officers -- Hospitals and
Related Facilities -- County Hospitals; Recruitment
of Staff; Meaning of Word "Staff"
Synopsis: The meaning of the word "staff" as used in K.S.A.
19-4611(f) includes physicians who are admitted to
membership on the hospital medical staff with
attendant hospital practice privileges. The board
of trustees of a county hospital may expend funds
as deemed necessary for the recruitment of
physicians who are anticipated to become members of
the hospital staff. Such expenditures may include
the purchase of a building and attendant personal
property which would then be leased to such
recruited physicians for their use as a clinic and
office space. The county hospital's purchase of
the property would serve the public purpose of
recruiting physicians to the area. Accordingly,
the county may contribute appropriately budgeted

and allocated county funds to this endeavor. Cited
herein: K.S.A. 19-4601; K.S.A. 1991 Supp.
19-4611; 65-431; K.S.A. 79-2929a; 79-2934.
Dear Mr. Sebelius and Mrs. McClymont:
As the Norton county attorney and the attorney for the
Norton county hospital board of trustees, you ask our
opinion regarding authority of the board of trustees for
Norton county hospital to expend hospital monies to purchase
a building and attendant personal property which will then be
leased back to physicians for their use as a medical clinic
and office. The building is presently owned by three
physicians and is used by them as their clinic and office.
You inform us that the board plans to expand the existing
facility in order to provide space for two additional
doctors. You also inform us that the stated purpose of the
purchase of the building and personal property is to enhance
physician recruitment in the Norton county area, toward the
end that obstetrical services may be restored to the Norton
county community. You ask whether such a purchase is
authorized under applicable Kansas law. In addition you ask
whether the county may assist or join in the purchase of the
medical clinic by way of home rule power other than bond
election.
Norton county hospital was created and organized pursuant to
the hospitals and related facilities act, K.S.A. 19-4601 et
seq. It is accordingly managed and controlled by a board
of trustees who may expend hospital monies only pursuant to
statutory authority. K.S.A. 1991 Supp. 19-4611(f) specifies
one such authorized purpose:
"The board may expend funds as deemed
necessary for the recruitment or retention
of staff. . . ."
The issue first presented turns on the meaning of the word
"staff" as used in K.S.A. 1991 Supp. 19-4611(f). If "staff"
means only salaried hospital employees, board expenditures to
provide clinic and office space for physicians in the private
practice of medicine would clearly be unauthorized. However,
if "staff" also encompasses physicians who have been granted
membership on the professional hospital staff with attendant
hospital practice privileges, (and assuming the recruited
physicians apply for and are granted such practice

privileges), board expenditures to purchase and lease back
clinic and office space to such physicians would be well
within statutory authority. We opine that the word "staff" as
used in K.S.A. 1991 Supp. 19-4611(f) embraces the broader
definition.
The word "staff" generally means a group of people assisting a
chief, manager, president, or other leader or a specific group
of workers or employees. Webster's Second College Edition
1384 (1986). However, in the realm of hospitals and
physicians the word has a specialized meaning which is
inherent within that relationship. While not defined by
Kansas law, the relationship between hospitals and physicians
is acknowledged in the statute pertinent to the licensing
regulation of hospitals in Kansas, K.S.A. 1991 Supp. 65-431,
which provides in part:
"[B]oards of trustees or directors of
facilities licensed pursuant to the
provisions of this act shall have the
right, in accordance with law, to select
the professional staff members of such
facilities . . . and no rules and
regulations or standards of the licensing
agency shall be valid which, if enforced,
would interfere in such selection or
employment. . . ."
The word "staff" has also been used in the context of the
hospital/physician relationship to describe that relationship:
"The medical staff is generally an
unincorporated association that functions
independently from but is accountable to
the hospital's governing board. There may
be several categories of staff membership,
including categories reserved specifically
for temporary or probationary members.
Although it is ultimately responsible for
granting medical staff membership, the
governing board generally acts on the
recommendations of the medical staff. The
standards for selection of medical staff
and the distinctions between the
categories of medical staff membership
must be set out specifically in the staff
bylaws." Healthcare Facilities Law, p 5
(A. Dellinger ed. 1991).

See also 41 C.J.S. Hospitals § 16 (1991) and 40
Am.Jur.2d Hospitals and Asylums § 8 (1968).
Foote v. Community Hospital of Beloit, 195 Kan. 385,
Syl. 2 (1965), also uses the word "staff" in this same
context:
"A by-law of a private hospital which
provides for investigation and
recommendation by the medical staff of an
applicant for membership on the medical
staff with final action to be taken on
such application by the board of directors
of the hospital is reasonable and in
harmony with the statutory power of
appointment of professional staff members
by the board of directors and does not
constitute an unlawful delegation of power
by such board."
In response to your first question, we opine that the meaning
of the word "staff" as used in K.S.A. 1991 Supp. 19-4611(f)
must be understood within the context of the
hospital/physician relationship and accordingly includes
physicians who are admitted to membership on the hospital
medical staff with attendant hospital practice privileges. It
follows that the board of trustees of a county hospital may
expend funds as deemed necessary for the recruitment of
physicians who are anticipated to become members of the
hospital staff. These expenditures may include the purchase
of a building and attendant personal property which would be
leased to such recruited staff physicians for their use as a
clinic and office space. Statutory authority to enter such a
lease is provided by K.S.A. 1991 Supp. 19-4611(a).
Your next question is whether the county may assist or join in
the purchase of the medical clinic by way of home rule power
other than bond election. Through statutes and Kansas case
law the commissioners have been given broad and sweeping
authority to decide how local financial matters will be
handled. However, the general rule is that funds must be
spent only for a "public purpose." Authority discussing the
public purpose doctrine includes: Ulrich v. Board of
Thomas County Commissioners, 234 Kan. 782, 789 (1984);
Duckworth v. City of Kansas City, 243 Kan. 386 (1988);
Savings and Loan Association v. Topeka, 87 U.S. 655, 22
L.Ed. 455 (1875). See also Gold, Economic Development
Projects: A Prospective, 19 Urban Lawyer 193 (1987);

Leavenworth County v. Miller, 7 Kan. 479 (1871); and
McQuillin, 15 Municipal Corporations § 39.19 (3d Ed.).
The courts will generally defer to the commissioners'
determination as to whether or not the expenditure is for a
public purpose. However, the courts will step in if it is
clear that the funds will only benefit a private entity. The
general law governing judicial scrutiny in the application of
the "public purpose" doctrine is stated thus:
"Each case must be decided in the light of
the existing conditions, with respect to
the objects sought to be accomplished, the
degree and manner in which that object
affects the public welfare, and the nature
and character of the thing to be done; but
the court will give weight to a
legislative determination of what is a
municipal purpose, as well as widespread
opinion and general practice which regard
as city purposes some things which may not
be such by absolute necessity, or on a
narrow interpretation of constitutional
provisions. When an appropriation of
public funds is primarily for public
purposes, it is not necessarily rendered
violative of constitutional provisions
against gifts and loans of public credit
by an incidental result which may be of
private benefit. On the other hand, if
the result is chiefly that of private
benefit, an incidental or even ostensible
public purpose will not save its
constitutionality. A purpose may be a
public one so as to be within a municipal
power to appropriate funds therefor, even
though it is not a necessary purpose. It
has been laid down as a general rule that
the question whether the performance of an
act or the accomplishment of a specific
purpose constitutes a 'public purpose' for
which municipal funds may be lawfully
disbursed rests in the judgment of the
municipal authorities, and the courts will
not assume to substitute their judgment
for that of the authorities unless the
latter's exercise of judgment or
discretion is shown to have been

unquestionably abused." Attorney General
Opinions No. 91-53, 82-229, 64 C.J.S.
Municipal Corporations, § 185 (1950),
State ex rel., McClure v. Hagerman,
98 N.E.2d 835 (Ohio 1951).
In Ulrich v. Board of Thomas County Commissioners, 234
Kan. 782 (1984), the court held that a transfer of county
assets to the Thomas county hospital served a public purpose.
Therefore, based on this analysis, Norton county would be
able to expend money for the purchase of the medical clinic.
However, funding for this expenditure must come from an
appropriate fund and cannot be diverted from an inappropriate
fund pursuant to K.S.A. 79-2934. Furthermore, K.S.A. 79-2929a
prohibits changing the budget (i.e. switching money from one
fund to another) without going through the budget amendment
procedures.
In conclusion, as long as the private entity is serving a
public purpose the expenditures of public money is
appropriate, as long as the money comes from an appropriate
fund.
Very truly yours,
ROBERT T. STEPHAN
ATTORNEY GENERAL OF KANSAS
Camille Nohe
Assistant Attorney General
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