MS 2021-10-J-Perry-September-30-2021-Legality-of-Allowing-Chamber-of-Commerce-to-Manage-Cou September 30, 2021

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?

Short answer: On the office-sharing question: yes. The 2021 opinion concluded that nothing prohibits a county and a chamber of commerce from agreeing, in a lawful management agreement, that the county retains office space at the property managed by the chamber. On the revenue question: when the chamber manages county property under a management agreement, both parties must comply with laws governing public funds, including the County Budget Law (Section 19-11-1 et seq.). The chamber cannot simply keep all revenue. The AG referred technical questions about payment mechanics to the Office of the State Auditor's Technical Assistance Division.

Disclaimer: This is an official Mississippi Attorney General opinion. AG opinions are persuasive authority but not binding precedent. This summary is for informational purposes only and is not legal advice. Consult a licensed Mississippi attorney for advice on your specific situation.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official AG opinion. The original opinion (linked at the bottom of this page, or PDF in the sidebar) is the authoritative source for any reliance.

View original AG opinion (PDF)

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:

Can the County keep some offices at the RiverPark for County employees while the Chamber manages the rest?
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 considering management agreements

The opinion makes two points. First, it finds "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." Second, on revenue, it holds that 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." The opinion does not approve the draft agreement or specify how payments should be structured.

For Mississippi chambers of commerce managing county property

The opinion relies on the Navarro (1995) opinion 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." It adds that "funds become public funds when received by a governmental entity and are then subject to the same restrictions as other public funds" (Nowak, 2019). So revenue a chamber collects while managing county property is public money subject to those restrictions, not the chamber's to keep.

For county attorneys

The opinion is careful about its limits: under Section 7-5-25, it cannot approve contracts, make factual determinations, or interpret the draft "Management Agreement" enclosed with the request, and it cannot validate or invalidate any agreement already in place (Magee). For the technical aspects of payments between the County and Chamber, the opinion refers the County to "the Office of the State Auditor's Technical Assistance Division."

Common questions

Q: What is the County Budget Law?
A: It is the statute the opinion names as governing how public funds are handled, "codified at Section 19-11-1, et seq." The opinion does not summarize its provisions; it cites it as the framework the County and Chamber must comply with when handling RiverPark revenue.

Q: Can the Chamber keep the revenue it collects at the RiverPark?
A: No. The opinion relies on Navarro for the rule that a county cannot assign management of a public property to a chamber with the chamber "retaining all revenue," and on Nowak for the point that funds become public funds once received by a governmental entity. The revenue is public and subject to public-funds laws.

Q: How should the County and Chamber actually move the money between them?
A: The opinion does not decide. For "technical aspects of payments made between the County and Chamber," it refers the County to the Office of the State Auditor's Technical Assistance Division.

Q: Did the AG approve the County's draft management agreement?
A: No. The opinion states it "cannot approve contracts or agreements or make factual determinations" and cannot interpret the enclosed draft "Management Agreement" under Section 7-5-25. It gives general guidance on the public-funds principle, not approval of any particular contract.

Q: Can the County keep offices at the RiverPark while the Chamber manages it?
A: Yes. The opinion finds "no prohibition" on the County and Chamber agreeing, as part of a lawful management agreement, for the County to keep using offices at the property for County employees.

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

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

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?
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

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.
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