[=OAG 1-01, 4] Your third question is: 3. Is it permissible for a county highway department to sell sand/salt to private vendors?
In answering this question, I first must consider whether a county highway department has statutory authority to sell sand/salt to private parties. You have not cited any statute that specifically authorizes such sales. Sales to private parties are not authorized by Wis. Stat. § 83.018, which authorizes county highway committees to sell road maintenance supplies to municipalities, but not to private parties. My review of the statutes has found no provision specifically authorizing a county highway department to sell supplies to private parties. A county board, however, may “[d]irect the clerk to lease, sell or convey or contract to sell or convey any county property, not donated and required to be held for a special purpose, on terms that the board approves.” Wis. Stat. § 59.52(6)(c). I conclude from this that the county board may itself direct the sale of sand/salt to private parties or may, by ordinance, authorize the county highway department to make such sales. In the absence of such an ordinance, however, a county highway department lacks power to sell supplies to private parties.
Of course, even where a county board authorizes the county highway department to sell sand/salt to private parties, those sales still must satisfy the public purpose doctrine. The concerns in this regard are the same as the concerns already discussed under your first and second questions. The mere possibility that a private party buying sand/salt from a county might use the materials for a public purpose is not enough to satisfy the public purpose doctrine. Rather, there must be “reasonable regulations for control and accountability to secure public interests.” State ex rel. American Legion 1941 Conv. Corp. v. Smith, 235 Wis. 443, 453, 293 N.W. 161 (1940).
[=OAG 1-01, 4-5] Because a private party buying sand/salt from a county, unlike a local municipality, is not itself subject to the public purpose doctrine, I believe that the public interest is adequately secured only if the private party is under a contract that requires the use of the sand/salt for a specific public purpose, such as the sanding/salting of public roads. Before selling sand/salt to a private buyer, therefore, the county should require the buyer to document the existence of such a contract. In addition, the terms of the sale of the sand/salt to the private party must include a binding and enforceable agreement by the buyer to use the sand/salt only for the specified public purpose. See Hermann v. Lake Mills, 275 Wis. 537, 542-43, 82 N.W.2d 167 (1957) (sale of municipal parking lot to private corporation invalid where there was no binding commitment requiring the corporation to continue to devote the lot to a public purpose). Such an agreement could be given teeth by the use of liquidated damages or by making future sales contingent on compliance. The general notion that the public would benefit from other uses of sand/salt – such as to provide safe winter passage on a private road, private driveway or private parking lot – is insufficient, in my view, to satisfy the public purpose doctrine. In addition, I believe that, under ordinary circumstances, the public purpose doctrine prohibits a county from selling road maintenance supplies to a private party that intends to resell the supplies on the private market. The answer to your third question, therefore, is that it is permissible for a county highway department to sell sand/salt to private vendors if the county board has approved such sales by ordinance, if the private vendor shows that it is subject to a contract that requires it to use the sand/salt for a specific public purpose and if the terms of sale include a binding and enforceable agreement by the buyer to use the sand/salt only for the specified public purpose. Purchases by private vendors only for the purpose of resale on the private market, however, ordinarily do not satisfy the public purpose doctrine.
Your letter also raises an additional issue. You have suggested that the practice, by a county highway department, of wholesaling sand/salt to private parties, either directly or through a middle man, itself serves the public purpose of providing safe winter passage for all taxpayers because the strict storage regulations for sand/salt make it infeasible for private vendors to stockpile enough sand/salt to meet local needs throughout the long winter. In your view, county intervention in the sand/salt market is justifiable because of this alleged inability of the private market to meet local needs on its own.
Assuming that the costs of complying with sand/salt storage requirements are as onerous as you suggest, I do not believe that the burden thereby imposed on the private sand/salt market is, in itself, sufficient to justify county intervention in that market. Under the public purpose doctrine, a county may stockpile sand/salt only to promote a public purpose, not to promote private interests. If county intervention in the sand/salt market is necessary to provide safe winter passage on public roads, or to secure a comparable public interest, then such intervention is permissible, if accompanied by adequate safeguards. The county may not, however, act as a wholesaler of sand/salt where that activity would only reduce the cost to private contractors of meeting private needs.
James E. Doyle
Attorney General
JED:TCB
It is permissible for a county highway department to sell road sand/salt to municipalities, either for their own use or for resale, as long as the county officials believe, in good faith, that the purchasing municipality does not intend to use or resell the sand/salt for a private, rather than a public, purpose. It is permissible for a county highway department to sell sand/salt to private parties only if the county board has approved such sales, if the purchasing private party shows that it is subject to a contract that requires it to use the sand/salt for a specific public purpose and if the terms of sale include a binding and enforceable agreement by the buyer to use the sand/salt only for the specified public purpose. Under ordinary circumstances, a county may not sell road maintenance supplies to a private party that intends to resell the supplies on the private market.
