Can a local elected official who serves on a community action board vote on the budget that funds that board?

Plain-English summary

In March 2012, Delegate Roslyn Tyler asked the AG whether a Virginia local elected official who also sat on a community action board (a board that administers anti-poverty social and economic programs) had a conflict of interest when voting on local budget items that affected community action funding. Community action boards are required by § 2.2-5303 to have one-third of their members made up of elected public officials selected by the local governing body of the service area. So the dual-role situation is structural, not incidental.

The AG concluded there was no conflict, as long as the official's role on the community action board was as a volunteer (uncompensated). The reasoning ran through the State and Local Government Conflict of Interests Act:

• § 2.2-3112 requires officials to disqualify themselves from transactions of their agencies in which they have a "personal interest." Voting on a budget item is a "transaction" under the Act.
• A "personal interest in a transaction" exists when the official (or an immediate family member) has a personal interest in property, a business, or a governmental agency that is the subject of the transaction or may foreseeably benefit or be harmed.
• The Act defines "personal interest" as a "financial benefit or liability accruing to an officer," with several specific triggers, including ownership of a business above a 3% threshold, salary or compensation above $10,000 annually, and similar quantitative measures.

Applied here: a member of a local governing body typically earns more than $10,000 annually for that role, so the member has a personal interest in the local government. But that interest does not extend to the community action board's funding unless the member also has a personal interest in the community action board itself. The Act's quantitative triggers (compensation, business ownership) do not apply to an unpaid volunteer board member. So an elected official who volunteers on the community action board has no personal interest in that board or its transactions, and is therefore not restricted from voting on the locality's budget items affecting community action funding.

The AG was careful to flag that this answer depends on the volunteer-versus-paid distinction. If the elected official received more than $10,000 in annual compensation for the community action board role, a personal interest would arise and § 2.2-3112's disqualification rule would kick in.

Currency note

This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

The Community Action Act establishes and governs Virginia's community action agencies, which facilitate the development of social and economic opportunities for low-income persons. The agencies are administered by community action boards.

§ 2.2-5303 requires that one-third of each community action board's membership consist of elected public officials (or their designees), selected by the local governing body of the service area. So the dual-service question is built into the statutory scheme: the General Assembly contemplated that local elected officials would serve on these boards.

The State and Local Government Conflict of Interests Act applies to officers and employees of governmental agencies. The Act defines "personal interest" with quantitative triggers: 3% business ownership, $10,000 annual income, $10,000 in property value, and similar. Without one of those triggers (or a corresponding trigger for an immediate family member), there is no "personal interest" for the Act's purposes.

The transactional rule in § 2.2-3112 requires disqualification from agency transactions where the officer has a personal interest. Voting on a budget is a transaction.

Common questions

Q: Can a Virginia county supervisor who serves on a community action board vote on the board's funding?
A: Per this opinion, yes, if the supervisor serves on the community action board without compensation. The volunteer status means there is no "personal interest" in the board under the Act, and so no transactional conflict.

Q: What if the elected official does receive compensation for the community action board role?
A: If compensation exceeds $10,000 annually, a personal interest under the Act arises, and § 2.2-3112 would require disqualification from votes that affect the board. Below $10,000, the official is not within the quantitative trigger.

Q: Is this a problem unique to community action boards?
A: No. The same analysis applies to other volunteer board service. Whether a vote on related funding is a conflict turns on whether the official's role on the other board meets one of the Act's quantitative thresholds.

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2012/12-022_Tyler.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Kenneth T. Cuccinelli, II
Attorney General

March 30, 2012

900 East Main Street
Richmond, Virginia 23219
804-786-2071
FAX 804-786-1991
Virginia Relay Services
800-828-1120
7-1-1

The Honorable Roslyn C. Tyler
Member, House of Delegates
25359 Blue Star Highway
Jarratt, Virginia 23867

Dear Delegate Tyler:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issue Presented

You inquire whether an impermissible conflict of interest precludes members of local governing bodies who also serve on community action boards from voting in budgetary matters of the local government when such items may affect the community action program funding.

Response

It is my opinion that no conflict of interest precludes members of local governing bodies who also serve on community action boards from voting in budgetary matters of the local government when such items may affect the community action program funding.

Applicable Law and Discussion

The Community Action Act establishes and governs community action agencies to facilitate the development of social and economic opportunities for low-income persons. These agencies are administered by community action boards. Pursuant to § 2.2-5303, with limited exception, "[o]ne-third of the members of the board shall be elected public officials or their designees, who shall be selected by the local governing body of the service area[.]"

As you note, the elected public officials selected to serve on a community action board often will be members of the local governing body. In both capacities, such an individual is subject to the State and Local Conflict of Interests Act ("the Act"). In general, the Act restricts the ability of state and local officers and employees to have personal interests in certain contracts with their own or other governmental agencies; and it prohibits the participation of such officers and employees in transactions of their governmental agencies in which they have a personal interest. Your inquiry involves the transactional restriction.

Section 2.2-3112 requires, in the absence of an exception, governmental officers to disqualify themselves from transactions of their agencies in which they have a personal interest. Voting on budgetary matters constitutes a transaction under the Act.

Under the Act, a "personal interest in a transaction"

exists when an officer or employee or a member of his immediate family has a personal interest in property or a business or governmental agency, or represents or provides services to any individual or business and such property, business or represented or served individual or business (i) is the subject of the transaction or (ii) may realize a reasonably foreseeable direct or indirect benefit or detriment as a result of the action of the agency considering the transaction.

The Act defines "personal interest" as

a financial benefit or liability accruing to an officer . . . or to a member of his immediate family. Such interest shall exist by reason of (i) ownership in a business if the ownership interest exceeds three percent of the total equity of the business; (ii) annual income that exceeds, or may reasonably be anticipated to exceed, $10,000 from ownership in . . . a business; (iii) salary, other compensation, fringe benefits, or benefits from the use of property, or any combination thereof, paid or provided by a business or governmental agency that exceeds, or may reasonably be anticipated to exceed, $10,000 annually; (iv) ownership of real or personal property if the interest exceeds $10,000 in value and excluding ownership in a business, income, or salary, other compensation, fringe benefits or benefits from the use of property; (v) personal liability incurred or assumed on behalf of a business if the liability exceeds three percent of the asset value of the business; or (vi) an option for ownership of a business or real or personal property if the ownership interest will consist of (i) or (iv) above.

Assuming members of local government bodies earn more than $10,000 annually for their service, they have a personal interest in their position with the governing body. To the contrary, provided a member of a community action board serves on the board as a volunteer, without compensation, he does not have a personal interest in his position on the board or its transactions. Thus, because the elected official has no personal interest in the community action board, he also has no personal interest in any transactions that may affect the board. As such, a member of a local governing body who is appointed to serve without compensation on a community action board is not restricted from voting on the budgetary matters of the governing body that may affect community action program funding.

Conclusion

Accordingly, it is my opinion that no conflict of interest precludes members of local governing bodies who also serve on community action boards from voting in budgetary matters of the local government when such items may affect the community action program funding.

With kindest regards, I am

Very truly yours,

Kenneth T. Cuccinelli, II
Attorney General