This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1996).




Jerome J. Harvieux, individually and

State of Minnesota, by Jerome J. Harvieux,



Scott County, Minnesota, et al.,


Oglebay Norton Industrial Sands, Inc.,


Filed June 2, 1998


Toussaint, Chief Judge

Scott County District Court

File No. 972157

Byron E. Starns, Carolyn V. Wolski, Leonard, Street & Deinard, 2270 Minnesota World Trade Center, 30 East Seventh Street, St. Paul, MN 55101 (for appellant Jerome J. Harvieux)

Susan K. McNellis, Scott County Attorney's Office, 428 South Holmes, Shakopee, MN 55379 (for respondent Scott County, Minnesota et al.)

James D. Bates, Huemoeller & Bates, 16670 Franklin Trail, Prior Lake, MN 55372 (for respondent Oglebay Norton Industrial Sands, Inc.)

Phillip R. Krass, Krass Monroe, P.A., Suite 1100, Southpoint Center, 1650 West 82nd Street, Bloomington, MN 55431-1447 (for Oglebay Norton Industrial Sands, Inc.)

Considered and decided by Toussaint, Chief Judge, Foley, Judge,[1] and Mulally, Judge.[2]


TOUSSAINT, Chief Judge

Respondent Scott County (the County) owns a 177-acre parcel of land situated near the Minnesota River and adjacent to Minnesota Valley National Wildlife Refuge, which contains deposits of silica sand. The County decided to sell the property and solicited non-contingent, but at the County's discretion contingent, sealed bids for the entire parcel or four separate parcels. Appellant Jerome J. Harvieux, an unsuccessful bidder, challenges a district court judgment allowing the County to enter into a purchase agreement with Respondent Oglebay Norton Industrial Sands, Inc. (ONISI), the successful bidder. Because the record supports the district court's judgment that the County's acceptance of ONISI's bid was proper, we affirm.


We review independently the district court's rulings on mixed questions of law and fact. See Mayering v. Wessels, 383 N.W.2d 670, 672 (Minn. 1986). We defer to the district court's underlying fact-findings. Minn. R. Civ. P. 52.01. Harvieux argues that the County improperly accepted ONISI's bid because: (1) it contained contingencies and was not in the County's best interests; (2) it violated Minn. Stat. § 373.01; and (3) it violated the Minnesota Environmental Policy Act.


A fundamental purpose of competitive bidding is to deprive or limit the discretion of contract making officials in the areas which are susceptible to such abuses as fraud, favoritism, improvidence, and extravagance.

Griswold v. County of Ramsey, 242 Minn. 529, 536, 65 N.W.2d 647, 652 (1954). Government officials may exercise reasonable discretion in the bidding process. See Otter Tail Power Co. v. Village of Elbow Lake, 234 Minn. 419, 424-25, 49 N.W.2d 197, 201 (1951).

The County's bid instructions stated in part:

Scott County is soliciting bids to purchase the property without contingencies, and any bids containing one or more contingencies may be rejected by Scott County as non[responsive]. However, Scott County specifically reserves the right to waive this provision and accept bids containing contingencies if the acceptance is found to be in the best interests of the County.

The County also required closing within 120 days of acceptance. ONISI's bid contained the following provision:

Closing will be approximately 180 days after acceptance of ONISI's bid or after all necessary zoning and permits for a period of no less than 20 years have been granted, whichever comes first.

Although ONISI's bid could potentially extend the closing date by 60 days, it also included a provision to pay additional interest to the County for any extension beyond 120 days. Even if the extension were a temporary contingency, ONISI's agreement to pay interest did not give it a "substantial advantage or benefit." See Duffy v. Village of Princeton, 240 Minn. 9, 12, 60 N.W.2d 27, 29 (1953) (test of whether variance is material is whether it gives bidder "substantial advantage or benefit not enjoyed by other bidders"). Further, the broad instructions did not destroy the competitive nature of the bidding. See Griswold, 242 Minn. at 536, 65 N.W.2d at 652 (procedures that defeat the fundamental purpose of competitive bidding cannot be allowed). The bidding process resulted in the County accepting the highest price offered for the parcel.

There is also support in the record for the district court's finding that acceptance of ONISI's bid was in the County's best interests. A County employee testified that the County was concerned with the total amount of money received from the sale, and ONISI's bid for the entire parcel exceeded the combined bids for the individual parcels. The record also reveals that the unsuccessful bidders did not have any proposals for the land's development.


Minn. Stat. § 373.01, subd. 1(4) (1996), limits a county's right to dispose of property by requiring:

In no case shall lands be disposed of without there being reserved to the county all iron ore and other valuable minerals in and upon the lands, with right to explore for, mine and remove the iron ore and other valuable minerals, nor shall the minerals and mineral rights be disposed of, either before or after disposition of the surface rights, otherwise than by mining lease.

In its bid instructions, the County stated that it would reserve from the sale all iron ore and valuable minerals, as required by section 373.01. As part of its bid, ONISI stated that its "sole interest in the property is to reactivate the industrial sand mine and processing facility that previously operated on the property." Harvieux argues that Minn. Stat. § 373.01 prohibited the County from accepting ONISI's bid when ONISI's stated purpose was to mine sand.

The record establishes that the property was subject to retained mineral royalty rights of certain prior owners, and the parties do not dispute this fact.[3] Based on this fact the district court ruled that section 373.01 did not prohibit the sale because "any and all" mineral rights to the property were privately reserved. Although the district court's legal conclusion may have overstated the rights retained by the prior owners, it does not follow that Minn. Stat. § 373.01 prohibits the County from accepting ONISI's bid. See e.g., Martin v. Schneider, 622 S.W.2d 620, 620 (Tex. App. 1981) (comparing the limited interest of a royalty holder to the broader interest of the holder of mineral rights). Section 373.01 applies when a county disposes of land. At this point ONISI and the

County have not yet drafted a purchase agreement and accordingly, appellant's argument that section 373.01 is violated is premature. [4]


Harvieux also argues that the district court erred by concluding that his environmental claims were premature. He contends that the Minnesota Environmental Policy Act (MEPA) requires the County to complete environmental review of ONISI's plan to conduct mining operations before acceptance of the bid and purchase agreement.

Interpretation of a statute is a question of law subject to de novo review. In re Copeland, 455 N.W.2d 503, 506 (Minn. App. 1990), review denied (Minn. July 13, 1990). MEPA does not prohibit a county board from initiating an action involving governmental property before the environmental review process for the project is complete. See Minn. Stat. §§ 116D.01 - .11 (1996). MEPA only provides that

a project may not be started and a final governmental decision may not be made to grant a permit, approve a project or begin a project [without resolution of the need for an environmental impact statement].

Minn. Stat. § 116D.04, subd. 2b (1996).

We agree with the district court's interpretation of section 116D.04. A successful bid for the purchase of land does not involve "governmental action" triggering the need for an assessment. See Minn. Stat. § 116.04-subd.1a (d)(1996).

ONISI and the County acknowledge that ONISI will need to obtain conditional use permits before it can begin any activity on the property. At the time of application for the conditional use permit, the County will then be required to comply with MEPA and ONISI will have to satisfy the necessary requirements. See Id. Resolution of the environmental concerns is thus premature.


[1] Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.

[2] Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.

[3] See Unimin Corp. v. Flood, 1993 WL 500521 (Minn. App. 1993 wherein a "royalty" dispute between Unimin, the County's grantor, and a prior owner was discussed).

[4] After ONISI's bid was accepted, the legislature clarified the application of section 373.01 to this transaction. See Minn. Laws 1997, Ch. 231, Art. 8, Sec. 17. The application of this law to the bid process is also premature.