    OFFlCE OF THE ATTORNEY   GENERAL.   STATE OF TEXAS

   JOHN     CORNYN




                                                December 8,1999



The Honorable Pete P. Gallego                            Opinion No. X-0154
Chair, Committee on General Investigating
Texas House of Representatives                           Re: Authority of the mayor and city manager of
P.O. Box 2910                                            a home-rule city to bind the city to a lease
Austin, Texas 78768.2910                                 agreement, and related questions (RQ-0092-JC)


Dear Representative     Gallego:

         You ask whether a city mayor or city manager operating outside the scope of his or her
prescribed authority may bind the city to a lease agreement. We conclude that as a general rule a
city mayor or city manager operating outside the scope of his or her prescribed authority may not
bind the city with respect to governmental functions. Under some circumstances, however, the
unauthorized acts of city officials may bind or estop the city, even in the exercise of a governmental
function. Whether there is a basis for estoppel against the city in any particular case requires the
investigation and resolution of fact questions, which cannot be done in an attorney general opinion.

          You inform us that the City of Eagle Pass is building an international bridge between Texas
and Mexico under a “Presidential Permit” issued by the United States Department of State. See
Letter from Honorable Pete P. Gallego, Chair, Committee on General Investigations, Texas House
of Representatives, to Honorable John Comyn, Texas Attorney General (July 23,1999) (on tile with
Opinion Committee) [hereinafter “Request Letter”]. Section 367.003 of the Transportation Code
authorizes a municipality located within fifteen miles of a section of the Rio Grande forming the
border between Texas and Mexico to acquire, construct, improve, enlarge, equip, operate or maintain
a toll bridge over the section of the Rio Grande. See Act of May 10,1999,76th Leg., R.S., ch. 227,
5 25, sets. 367.001, .003,1999 Tex. Sess. Law Serv. 721, 1043-44 (nonsubstantive codification of
former TEX. REV. CIV. STAT. ANN. article 1015g-5, $5 1,2(a)) (to be codified at TEX. TRANSP. CODE
ANN. $5 367.001, ,003). The permit provides that the city “shall provide to the United States
Customs Service and to other Federal Inspection Agencies, as appropriate, at no cost to the Federal
government, temporary inspectional facilities.” Presidential Permit, State Dep’t No. 96-01, art. 10,
61 Fed. Reg. 20874 (1996). See Act ofMay 10,1999,76th Leg., R.S., ch. 227,§ 25, sets. 367.012-
,013, 1999 Tex. Sess. Law Serv. 721, 1045 (nonsubstantive codification of former TEX. REV. CIV.
STAT. ANN. art. 1015g-5,s 7, authorizing municipality to construct facilities to lease to United States
in performing federal governmental function relating to a toll bridge) (to be codified at TEX. TRANSP.
CODE ANN. 5 367.012-,013).       The General Services Administration (“GSA”), acting for the federal
government, maintains that the City of Eagle Pass has agreed to provide permanent inspection
facilities at no cost or at one dollar per year to the federal government. See Request Letter, supra,
The Honorable Pete P. Gallego     - Page 2      (K-0154)




at 2. The GSA bases its position on its discussions with the city’s then-mayor and then-city manager
during the planning stages of the project. The city disagrees that it has made such a commitment,
stating that the mayor and city manager lacked authority to make this agreement, and that only the
city council may bind the city with respect to leasing permanent facilities to the federal government.
See id.

         You have provided us with a copy of the federal permit authorizing construction of the
international bridge as well as correspondence relevant to the construction of the bridge. We do not
know whether all of these documents are part of the contract, and in any case, we cannot construe
a contract in the opinion process. See Tex. Att’y Gen. Op. No. JM-697 (1987) at 6. We can address
the following legal questions that you ask:

                1. Can a city mayor or city manager operating outside the scope of
                   prescribed authority bind the city to a lease agreement?

                2. If a mayor or city employee acting without the requisite authority
                   made an agreement to provide free facilities to a government
                   agency at an international bridge built by the city, is such an
                   agreement valid and enforceable even if the agreement was
                   neither authorized, entered into nor ratified by the City’s
                   governing body?

Request Letter, supra, at 2. Because your questions raise the same legal issues, we will address them
together.

         The city argues that authority to enter into agreements is vested in the city council and that
no individual city council member or city employee may obligate the city unless the city council
authorizes that person to do so or ratifies the action after it is taken. See id. This view is consistent
with the general rule on contractual authority of city officers. When the governmental power of a
municipality is vested in a city council or other governing body, a contract must ordinarily be
authorized or ratified by the governing body for it to bind the municipality, and an officer or
employee of a city, absent express authority, cannot bind the city. See Brazes River Auth. v. City
of Graham, 354 S.W.2d 99, 110 (Tex. 1961) (p revision in deed executed by mayor was invalid
because beyond the scope of city council resolution authorizing him to execute deed); City of&yun
v. Page & Sims, 51 Tex. 532 (1879) (mayor’s contract with attorney did not bind city); First Nat ‘1
BankofMarlin      v. Dupuy, 133 S.W.2d 238,240 (Tex. Civ. App.-Waco 1939, writ dism’d judgm’t
car.) (signatures of city mayor and school board chairman on tax assessor-collector’s assignment to
bank of commissions due bim for assessing taxes did not bind city or school district). Apparent
authority to act for the city is insufficient; a city officer cannot bind the city except on actual
authority, absent any question of estoppel. See Wilke v. City of Ballinger, 31 S.W.2d 1102 (Tex.
Civ. App.-Austin 1930, no writ); see also Cleontes v. City oflaredo, 777 S.W.2d 187, 189 (Tex.
App.-San Antonio 1989, writ denied).
The Honorable Pete P. Gallego      - Page 3       (X-0154)




         Bridge construction and maintenance are governmental rather than proprietary functions of
a municipality.   TEX. CIV. PRAC. & REM. CODE ANN. 5 101.0215(a)(4) (Vernon Supp. 1999); see
TEX. CONST. art. XI, 5 13 (authorizing legislature to define the proprietary and governmental
functions of a municipality).    Accordingly, we will consider estoppel only in relation to a city’s
exercise of its governmental authority. See generally City of Crystal City v. Cystal City Country
Club, 486 S.W.2d 887, 889 (Tex. Civ. App.-Beaumont          1972, writ ref d n.r.e.) (estoppel against a
city acting in its proprietary capacity as distinguished from its governmental capacity).

         A city in the exercise of its governmental powers cannot as a rule be estopped by its officials’
unauthorized or negligent acts. See Bowman v. Lumberton Indep. Sch. Dist., 801 S.W.2d 883,888
(Tex. 1990); City ofHutchins v. Praszjka, 450 S.W.2d 829,835 (Tex. 1970); CityofSan Marcos v.
R. W. McDonald Dev. Corp., 700 S.W.2d 674,676 (Tex. App.-Austin 1985, no writ). In exceptional
cases, however, a municipality, even in the exercise of a governmental function, may be estopped
in two circumstances.     First, a city may be estopped where necessary to prevent manifest injustice,
and where there is no interference with the exercise ofits governmental functions. See Praszjka, 450
S.W.2d at 836; CityofDallas v. Rosenthal, 239 S.W.2d 636,645 (Tex. Civ. App.-Dallas 1951, writ
ref d n.r.e.) (zoning powers). For example, where a city has received or accepted benefits under a
contract, it may be estopped from denying the existence of the contract even when acting in its
public capacity. See City of San Angelo v. Deutsch, 91 S.W.2d 308, 309 (Tex. 1936); City of
Nederland v. Callihan, 299 S.W.2d 380,386-87 (Tex. Civ. App.-Beaumont            1947, writ ref d n.r.e.).

         Second, the governing body of a unit of local government may be estopped by the action of
a subordinate officer or employee, even absent express authority, “if the evidence clearly indicates
that the subordinate officer’s act was done with the knowledge of the governing body and was’s0
closely related to the expressed will of the governing body as to constitute his act that of the board
or commission itself.” Bowman, 801 S.W.2d 883; City of Dallas v. Villages of Forest Hills, 931
S.W,2d601,604      (Tex. App.-Dallas 1996,nowrit); Cleontes, 777 S.W.2d 187,189; Hallman v. City
ofPampa, 147 S.W.2d 543,546-47 (Tex. Civ. App.-Amarillo            1941, writ refd). For example, the
evidence in Villages of Forest Hills clearly showed conduct of city representatives that “so closely
related to the expressed will of the governing body as to constitute the act of the governing body
itself.” Villages ofForest Hills, 93 1 S.W.2d at 604. The City of Dallas Housing and Neighborhood
Services Department       (“the HNSD”) approved a loan application under the city’s Rental
Rehabilitation Program (“RRP”), a federally sponsored program providing funds to rehabilitate low
income housing. See id. at 603 & n. 1. The assistant director ofthe HNSD wrote to the borrower that
his application had been approved, and her letter created a binding contract between the borrower
 and the city, even though it was not signed by the city manager or approved by the city attorney as
 required by the Dallas city charter. See id. at 603-04. The evidence showed that the city council had
 approved the written procedures used by the HNSD to fund RRP loans. See id. Because HNSD
 followed the precise procedure selected by the council for approving RRP loans, the court concluded
 that “the conduct of the city representatives in approving and notifying [the borrower] of the
 approval so closely followed the expressed will of the governing body as to constitute the act of the
 governing body itself.” Id. at 605. The actions ofthe city representatives in approving the RRP loan
The Honorable   Pete P. Gallego   - Page 4      (JC-0154)




were binding on the city, and the city was estopped from denying the validity of the letter approving
the loan. See id.

         In answer to your questions, we conclude that as a general rule, the mayor or city manager
of a city cannot, absent express authority, bind the city to a lease agreement if the city council has
exclusive authority to enter into leases. However, the city may be estopped by the unauthorized
actions of city officials in the exercise of a governmental function if necessary to prevent manifest
injustice, and if there is no interference with the exercise of its governmental functions, or “if the
evidence clearly indicates that the subordinate officer’s act was done with the knowledge of the
governing body and was so closely related to the expressed will of the governing body as to
constitute his act that of the board or commission itself.” Bowman, 801 S.W.2d at 604; Prasrjka,
450 S.W.2d at 836.
The Honorable   Pete P. Gallego    - Page 5      (X-0154)




                                        SUMMARY


                         As a general rule, the mayor or city manager of a city cannot,
                absent express authority, bind the city to a lease agreement if the city
                council has exclusive authority to enter into leases. The city may be
                estopped by the unauthorized actions of city officials, even in the
                exercise of a governmental function, in exceptional cases where
                necessary to prevent manifest injustice, and where there is no
                interference with the exercise of its governmental functions, or where
                the evidence shows that the subordinate officer’s act was done with
                the knowledge of the governing body and was so closely related to
                the expressed will ofthe governing body as to constitute his or her act
                that of the governing body itself.




                                                Attorney General of Texas



ANDY TAYLOR
First Assistant Attorney General

CLARK RENT ERVIN
Deputy Attorney General - General Counsel

ELIZABETH ROBINSON
Chair, Opinion Committee

Susan L. Garrison
Assistant Attorney General - Opinion Committee
