Can a Mississippi county hire a chamber of commerce to manage a county-owned property and share offices, and does revenue generated have to flow through the county?

Plain-English summary

Tunica County owned a property called the Tunica RiverPark. The County wanted the Tunica Chamber of Commerce to manage the day-to-day operations under a management agreement. The County's attorney sent a draft agreement and asked two questions:

1. Can the County keep some offices at the RiverPark for County employees while the Chamber manages the rest?
2. Does revenue have to be paid first to the County and then re-paid to the Chamber (less rents and expenses owed to the County)?

The AG could not opine on the specific draft agreement (Section 7-5-25 limits AG opinions to questions of state law, not contract interpretation). But the AG provided general guidance:

Office-sharing: No prohibition. A management agreement that complies with all aspects of Mississippi law can include a provision letting the County keep office space at the property. This is just a contractual arrangement; both parties have something to gain from it (the Chamber gets management authority, the County keeps some operational presence).

Revenue handling: This is where the public-funds rules kick in. The AG cited a 1995 Navarro opinion holding that there is no authority for a municipality or county to assign management of an industrial park to a chamber of commerce with the chamber retaining all revenue. Revenue from a county-owned property is "public funds" once the County (or the Chamber acting as the County's agent) receives it. Public funds are subject to the County Budget Law (Section 19-11-1 et seq.) and other restrictions. So the Chamber cannot simply collect and keep RiverPark revenues. The arrangement has to flow public funds through the County's accounts and out to the Chamber for compensable services, all within budget law limits.

For technical questions on the actual payment mechanics (timing, frequency, accounting treatment), the AG referred the County to the State Auditor's Technical Assistance Division. The State Auditor has expertise in these accounting questions; the AG opinion is just legal guidance on the public-funds principle.

What this means for you

For Mississippi counties and municipalities considering management agreements

You can hire outside organizations (chambers, nonprofits, private companies) to manage public property. You should structure the deal carefully:

1. Clear scope. Define what the manager does and does not do. Day-to-day operations? Marketing? Tenant relations? Maintenance? Capital improvements?

2. Public funds discipline. All revenue from the property is public funds when received by you or by your agent (the manager). Public funds must:
   - Flow through your treasury or designated public account
   - Be tracked under the County Budget Law (Section 19-11-1 et seq.) or the equivalent municipal budget framework
   - Be paid out only for properly authorized purposes
   - Be auditable

3. Manager compensation. The manager can be paid for services rendered. The compensation must be:
   - Defined in the management agreement
   - Reasonable for the services
   - Paid from the public funds (after they have flowed through your accounts) or from non-revenue sources

4. Office sharing. If you want to keep an office presence at the property, the management agreement can provide for it. Just include the terms (which space, what use, who pays utilities for that space, etc.).

5. Audit and oversight. Reserve the right to audit the manager's books, inspect the property, review records.

For Mississippi chambers of commerce considering county management contracts

If a county or city offers you a management contract, understand the public funds issue:

• Revenue you collect is public money, not chamber money.
• You cannot mix that revenue with your general chamber accounts.
• You must remit revenue to the public entity per the agreement.
• You receive compensation for management services as a separate, defined payment.
• Your records are subject to audit.

This is more administrative burden than a typical chamber arrangement. Make sure the compensation justifies the work.

For Mississippi county attorneys advising on these arrangements

Draft the management agreement to address:
- Scope of management
- Revenue collection and remittance procedures (revenue flows to county; manager paid separately)
- Compensation for the manager
- Office space arrangements
- Maintenance and capital improvement responsibilities
- Insurance and liability
- Audit rights
- Term and termination
- Compliance with County Budget Law

Get input from the State Auditor's Technical Assistance Division on the accounting mechanics before finalizing.

For state auditors and technical assistance providers

Counties and municipalities increasingly engage third parties to manage public property. The legal framework (the AG's view as expressed in 2021) is settled: revenue is public, manager is paid separately, public funds rules apply throughout. Technical questions about specific accounting treatment, budget categories, and payment timing benefit from State Auditor guidance.

For Mississippi residents using county-owned facilities like RiverPark

If you visit a county-owned facility managed by a chamber of commerce or other private organization, your fees and purchases generate public revenue. That revenue funds the facility's operation, the manager's compensation, and any net to the county budget. You can ask your county supervisors how the revenue is being used; that information is part of the public budget.

For private companies considering bidding to manage public property

The framework reaches private managers too, not just chambers. If you bid to manage a public facility:
- All revenue is public funds
- You collect on behalf of the public entity
- Your management fee comes from the public funds (or other agreed sources)
- You operate under public-records and audit obligations
- You cannot keep operating profits as your own; profits beyond your fee return to the public entity

Common questions

Q: What is the County Budget Law?
A: Section 19-11-1 et seq. is Mississippi's framework for county budgets. It requires counties to adopt and follow annual budgets, account for revenues, control expenditures, and report transactions. Public funds collected by or for the county are subject to the budget framework.

Q: Can the Chamber be paid a percentage of revenue as its management fee?
A: The opinion does not directly address this. A percentage-based fee structure for a public services contract is generally permissible (see the 2021 Long opinion in this batch on airport authority percentage fees). The structure must be:
- Reasonable for the services provided
- Defined in the contract
- Paid from public funds after they flow through the County's accounts

Q: What about a flat annual fee?
A: That's also permissible. Common structure: County pays Chamber a flat annual management fee from the County budget, in exchange for the Chamber's management services. Revenue from the property flows directly to the County. The County is responsible for budgeting the management fee and paying it.

Q: How does this interact with constitutional donation limits?
A: The Section 66 donation issue (analyzed in the Rimes 2021 opinion in this batch) does not arise as long as the Chamber is providing actual services for the compensation. A no-strings payment from County to Chamber would be a donation; a payment for management services is a contract, not a donation.

Q: Can the Chamber sublease portions of the property?
A: That is a fact-specific contract question. The opinion does not address it. Generally, the management agreement should specify whether the Chamber has subletting authority and on what terms. Public-funds rules apply to any revenue from sublets.

Q: Can the County and Chamber share IT infrastructure or staff at the property?
A: That is also a contract design question. Sharing personnel between a public entity and a private entity raises various legal questions (employment, workers' comp, ethics rules). Address these specifically in the management agreement.

Q: What if the property loses money?
A: The County, as owner, bears the financial risk. The management agreement determines how losses are allocated between County and Chamber. The Chamber's compensation may be paid from County general funds rather than facility revenue if the facility does not generate enough revenue.

Q: What is the difference between this and a lease?
A: A lease transfers possession to the lessee, who then operates the property and keeps revenue (subject to lease terms). A management agreement keeps possession with the public owner; the manager operates the property as the owner's agent. Different legal frameworks. Some hybrid arrangements (like long-term concession agreements) blend features. Make sure your structure is clearly one or the other or, if hybrid, that the rules of both apply.

Q: Can a private gambling property's adjacent county property like RiverPark be managed differently because of gaming proximity?
A: The opinion is silent on Tunica's gaming context. Mississippi gaming law has its own framework. The general public-funds rules apply regardless of the property's economic context.

Q: What about Section 17-21-51 (county property management)?
A: The opinion did not cite Section 17-21-51 specifically. Counties have various property management authorities under Mississippi law. The general principle (public funds remain public) applies across these authorities.

Background and statutory framework

Mississippi counties hold property in trust for their residents. Property generating revenue produces public funds. Public funds are subject to a comprehensive statutory framework designed to ensure transparent budgeting, audit, and accountability.

Section 19-11-1 et seq. (County Budget Law): Requires counties to adopt annual budgets, track revenues and expenditures, and report. All public funds received by the county must flow through the budget.

Section 7-5-25: Limits AG opinions to prospective state law questions. The AG cannot interpret specific contracts (including the Tunica draft management agreement) or make factual determinations about implementation. So this opinion is general guidance on the legal framework, not approval or disapproval of any particular contract structure.

The 1995 Navarro AG opinion is the foundational authority for the public-funds rule. Navarro addressed an industrial park managed by a chamber of commerce, where the chamber would have retained all revenue. The AG held that arrangement was not authorized: a chamber managing public property is essentially the county's agent, and revenue is therefore public.

The 2019 Nowak opinion expanded the principle: "funds become public funds when received by a governmental entity and are then subject to the same restrictions as other public funds." The fact that the funds are received initially by an agent (a chamber, a manager) does not change their public character.

So the framework is:
1. Public property generates revenue when used by patrons.
2. That revenue, when collected by the public entity or its agent, is public funds.
3. Public funds are subject to budget law and other restrictions.
4. The public entity can pay the manager for services rendered.
5. The payment for services is itself a public expenditure subject to budget law.

Office-sharing is a different category. It is not about funds; it is about who occupies what space. Two parties to a contract can agree on shared occupancy without violating any public-funds rule, as long as the contract is otherwise lawful.

The State Auditor's Technical Assistance Division is the right resource for the operational mechanics. The AG sets the legal principle; the State Auditor helps implement it.

Citations and references

Statutes:
- Miss. Code Ann. § 7-5-25, AG opinions limited to prospective state law
- Miss. Code Ann. § 19-11-1 et seq., County Budget Law

Prior AG opinions:
- MS AG Op., Magee (Aug. 29, 2008), AG opinions cannot validate or invalidate past action
- MS AG Op., Navarro (Dec. 8, 1995), no authority for chamber of commerce to retain all revenue from county industrial park
- MS AG Op., Nowak (Oct. 25, 2019), funds become public funds when received by governmental entity

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2021/10/J.Perry-September-30-2021-Legality-of-Allowing-Chamber-of-Commerce-to-Manage-County-Property.pdf

Original opinion text

September 30, 2021

John Keith Perry, Jr., Esq.
Attorney for Tunica County Board of Supervisors
5699 Getwell Rd., Building G5
Southaven, Mississippi 38672

Re: Legality of Allowing Chamber of Commerce to Manage County Property

Dear Mr. Perry:

The Office of the Attorney General has received your request for an official opinion.

Background

According to your request, Tunica County (the "County") is interested in having the Tunica Chamber of Commerce (the "Chamber") manage a county-owned property known as the Tunica RiverPark (the "RiverPark"). You enclosed a copy of a proposed agreement for this purpose with your opinion request.

Questions Presented

1. If the County grants the Chamber authority to conduct day-to-day operations at the RiverPark as part of a management agreement, can the County retain offices at the RiverPark to be used by County employees?

2. Is there a requirement for revenue generated by patrons of the RiverPark to be dispersed to the County, to then be redispersed back to the Chamber, less any rents and expenses owed to the County?

Brief Response

1. Yes. We find no prohibition on the County and Chamber agreeing, as part of a lawful management agreement, for the County to continue to use offices at the RiverPark for use by County employees.

2. The County and the Chamber, when acting on the County's behalf in managing the RiverPark pursuant to the terms of a lawful management agreement, must at all times comply with laws governing public funds. With respect to technical aspects of payments made between the County and Chamber, we recommend you contact the Office of the State Auditor's Technical Assistance Division.

Applicable Law and Discussion

Official opinions of this office are issued on prospective questions of state law pursuant to Mississippi Code Annotated Section 7-5-25. Official Attorney General's opinions cannot approve contracts or agreements or make factual determinations. Therefore, to the extent your request requires this office to make a factual determination or to interpret contracts, including the draft "Management Agreement" enclosed with your request, we are unable to respond by official opinion. Moreover, pursuant to Section 7-5-25, this office may only opine on prospective questions of law. An Attorney General's Opinion can neither validate nor invalidate past action. MS AG Op., Magee at *1 (Aug. 29, 2008). To the extent the County has already entered into some form of agreement with the Chamber whereby the Chamber will manage the RiverPark, we are unable to opine on the legality or operation of such arrangement.

With respect to your first question, we find no prohibition on the County and Chamber agreeing, as part of a management agreement that complies with all aspects of Mississippi law, for the County to use offices at the County-owned property being managed by the Chamber.

In response to your second question, we have opined that there is no authority for a municipality or county to assign management of an industrial park to a chamber of commerce with the chamber of commerce retaining all revenue generated by the industrial park. MS AG Op., Navarro at 1 (Dec. 8, 1995). The County and the Chamber, when acting on the County's behalf in managing the RiverPark pursuant to the terms of a lawful management agreement, must at all times comply with laws governing public funds, including the County Budget Law, codified at Section 19-11-1, et seq. This office has consistently opined that funds become public funds when received by a governmental entity and are then subject to the same restrictions as other public funds. MS AG Op., Nowak at 3 (Oct. 25, 2019). With respect to technical aspects of payments made between the County and Chamber, we recommend you contact the Office of the State Auditor's Technical Assistance Division.

If this office may be of any further assistance to you, please do not hesitate to contact us.

Sincerely,

LYNN FITCH, ATTORNEY GENERAL

By: /s/ Phil Carter
Phil Carter
Special Assistant Attorney General