The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 5305 May 3, 1978 BOARD OF COUNTY ROAD COMMISSIONERS: Hold harmless agreement with highway engineer PUBLIC OFFICERS & EMPLOYEES: Hold harmless agreement between public employer and public employee A board of county road commissioners is authorized to purchase liability insurance for the protection of their employees against loss on account of any judgment which may be rendered for personal injury or property damage to a third party caused by the employee. A board of county road commissioners is authorized, but not required, to indemnify an officer or employee of the board or to pay, settle or compromise a judgment entered against an officer or employee for personal injury or property damage to a third party caused by the officer or employee while in the course of employment and while acting within the scope of authority; the determination of whether to make such indemnification, however, may not be made before the alleged negligent act occurs. A board of county road commissioners may not agree to hold a highway engineer harmless from any monetary recovery assessed by a court which results from his or her negligence in the performance of public duties. The Board of County Road Commissioners of Lapeer County, Michigan Box 327 Lapeer, Michigan 48446 You have requested my opinion as to the validity of a proposed provision to be included in the employment contract between the Board of County Road Commissioners as employer and a highway engineer which states: 'The Employer agrees to provide legal services and hold the employee and members of his department harmless from any monetary recovery assessed against them as parties in litigation arising from activities or actions involving professional services to employer.' Const 1963, art 7, Sec. 16, states: 'The legislature may provide for the laying out, construction, improvement and maintenance of highways, bridges, culverts and airports by the state and by the counties and townships thereof; and may authorize counties to take charge and control of any highway within their limits for such purposes. The legislature may provide the powers and duties of counties in relation to highways, bridges, culverts and airports; may provide for county road commissioners to be appointed or elected, with powers and duties provided by law. The ad valorem property tax imposed for road purposes by any county shall not exceed in any year one-half of one percent of the assessed valuation for the preceding year.' (Emphasis supplied) The powers and duties of boards of county road commissioners are delineated in 1909 PA 283; MCLA 224.1 et seq; MSA 9.101 et seq. 1909 PA 283, supra, Sec. 9, provides, in pertinent part, that: '. . . The board of county road commissioners shall act as an administrative board only and the function of the board shall be limited to the formulation of policy and the performance of official duties imposed by law and delegated by the board of supervisors . . ..' (Emphasis supplied) Counties have only such powers as are conferred upon them by law. Wright v Bartz. 339 Mich 55 (1954); Mosier v Wayne County Board of Auditors, 295 Mich 27 (1940); and Bond v Cowan, 272 Mich 296 (1935). The board of county road commissioners is a unit of county government. See 2 OAG, 1956, No 2,737, pp 624, 625 (August 25, 1956). 1909 PA 283, Sec. 10; MCLA 224.10; MSA 9.110, empowers a board of county road commissioners to employ a competent highway engineer as follows: '. . . The board of commissioners shall employ a competent county highway engineer who shall make all surveys ordered by the board, prepare plans and specifications for all roads, bridges and culverts, and exercise such general supervision over all construction as will insure that the plans and specifications are strictly followed. Two or more adjoining counties may employ the same engineer, if the work in 1 or more of such counties is not enough to employ the whole time of such engineer. The board may also engage such other professional and consultant services as it deems necessary to carry out the provisions of this act and promote efficiency and economy in the operation of the county road system. The board may also employ such other servants and laborers as may be necessary, and may purchase such machines, tools, appliances and materials as shall in its judgment be necessary or convenient for the proper carrying on of the work. . . .' There is nothing therein contained that authorizes a board of county road commissioners to provide its highway engineer with legal services or to indemnify the engineer for any monetary judgments rendered against this employee arising from the performance of professional services for the board of county road commissioners. In the absence of any statutory provisions therefor, it is my opinion that a board of county road commissioners lacks the authority to incur the obligation described in the proposed contract provision. Further, 1909 PA 283, Sec. 21; MCLA 224.21; MSA 9.121, provides in pertinent part: 'Said board of county road commissioners shall have no power to contract indebtedness for any amount in excess of the moneys credited to such board and actually in the hands of the county treasurer . . ..' If the board were to agree to hold a highway engineer harmless from any monetary recovery assessed by a court as a result of his or her negligence, it would not be possible to contain the financial obligations of the board since it is theoretically possible for a judgment to be entered against an engineer in an amount exceeding several million dollars. Thus, this contingent liability could exceed the moneys credited to the board. It should also be noted that 1964 PA 170, Sec. 8; MCLA 691.1408; MSA 3.996(108), provides: 'Whenever any claim is made or any civil action is commenced against any officer or employee of any governmental agency for injuries to persons or property caused by negligence of the officer or employee while in the course of his employment and while acting within the scope of his authority, the governmental agency is authorized, but not required, to pay for or engage or furnish services of an attorney to advise the officer or employee as to the claim and to appear for and represent the officer or employee in the action and the governmental agency may compromise, settle and pay such claim before or after commencement of any civil action. Whenever any judgment for damages is awarded against any officer or employee of any governmental agency as a result of any civil action for personal injuries or property damage caused by the officer or employee while in the course of his employment and while acting within the scope of his authority, the governmental agency is authorized, but not required, to indemnify the officer or employee or pay, settle, or compromise the judgment. Nothing in this section shall be deemed to impose any liability on any governmental agency.' 1964 PA 170, supra, Sec. 9, authorizes governmental agencies to purchase liability insurance for the protection of their employees against loss on account of any judgment which may be rendered for personal injury or property damage to a third party caused by the employee. Thus, 1964 PA 170, supra, makes it discretionary for the governmental agency as to whether to provide insurance protection for an employee or to indemnify the employee after judgment is entered. The statute does not, however, offer the board the option of agreeing to indemnify an employee before an alleged negligent act occurs. Therefore, it is my opinion that although a board of county road commissioners may provide legal services, may indemnify an employee and may pay a judgment which is entered against him arising from an action brought by a third party for personal injury or property damage caused by the employee, a board of county road commissioners lacks the authority to execute a contract which guarantees such legal services and indemnification. Frank J. Kelley Attorney General