HOSPITAL DISTRICTS: CONTRACTS: Hospital Districts created under Minn. Stat.
§§ 447.31, et. seq., are subject to the bidding requirements of Minn. Stat. § 471.345 (2000). Op.
Atty. Gen. 1001K, April 18, 1962 superceded.

                                                                                         1001 K


                                          May 8, 2002



Ronald R. Frauenshuh, Sr.
FRAUENSHUH & SPOONER, P.A.
113 Washburne Avenue
Paynesville, MN 56362

Dear Mr. Frauenshuh :

       Thank you for your letter of April 1, 2002. In that letter, you present substantially the
following facts.

                                            FACTS

       The Paynesville Area Hospital District (“the District”) has undertaken a project involving
an addition to its hospital and remodeling of the associated nursing home. Due to a “freeze” in
nursing home rooms, an earlier plan to also construct an addition to the nursing home was not
implemented. The original plan would have replaced two-person shared rooms with private
rooms. Recently the State has authorized the District to go ahead with the planned additions.
The District would like to have the added work done by the contractors now on site in order to
minimize disruption of the elderly patients who have already been displaced once to
accommodate the remodeling. You note that in Op. Atty. Gen. 1001K, April 18, 1962, the
Attorney General concluded that hospital districts such as the Paynesville District, created
pursuant to Minn. Stat. §§ 447.31, et seq., were not statutorily required to advertise for bids on
construction contracts.

                                          QUESTION

       Is the Paynesville Area Hospital District subject to the bidding requirements contained in
Minn. Stat. §§ 471.345, et seq. in contracting for construction work?

                                           OPINION

       As qualified below, we answer your question in the affirmative.
Ronald R. Frauenshuh, Sr.
May 8, 2002
Page 2


       First Minn. Stat. § 471.345 (2000) (the Uniform Municipal Contracting Law) requires a
contract for over $50,0001 entered into by a “municipality” for “construction, alteration, repair or
maintenance of real property to be let upon public solicitation of sealed bids.”

         Second, a “municipality” for purposes of this requirement is defined as.

         “a county, town, city, school district or other municipal corporation or political
         subdivision of the state authorized by law to enter into contracts.”

(Emphasis added). According to Minn. Stat. § 447.31, subd. 6, a hospital district “created or
reorganized under sections 447.31 to 447.37 is a municipal corporation and a political
subdivision of the state. . .” Therefore, a hospital district such as the Paynesville Area District is
plainly subject to the requirements of section 471.345.

       Third, section 471.345 was first enacted in 1969. See Act of June 4, 1969, Ch. 934, § 1,
1969 Minn. Laws 1803. Therefore, it was not in existence when Op. Atty. Gen. 1001K, April
18, 1962 was issued. Nor does there appear to have been any other statutory bidding
requirement applicable to hospital districts at that time. Thus, while the 1962 opinion appears to
be a correct application of 1962 law, it is no longer applicable in light of Minn. Stat. § 471.345.

        Finally, while some alteration of work to be performed under an existing government
construction contract may be made without advertising for bids, it is not generally permissible to
make changes that substantially change the nature of the project without soliciting bids for a new
contract. See, e.g., Griswold v. Ramsey County, 242 Minn. 529 (1954), Hanna v. Board of
Education of Wicomico Co. 200 Md. 49, 87 A.2d 846, Ops. Atty. Gen. 161a-8 January 5, 1965,
May 9, 1956 and March 7, 1950. Whether a particular proposal would constitute a change of
sufficient magnitude to necessitate letting a new contract is, for the most part, a fact issue beyond
the scope of opinions of the Attorney General. See, e.g., Op. Atty. Gen. 629a, May 9, 1975.

                                                  Very truly yours,

                                                  MIKE HATCH
                                                  Attorney General


                                                  KENNETH E. RASCHKE, JR.
                                                  Assistant Attorney General




1
    For municipalities under 2,500 in population, the threshhold amount is $35,000.
