AGO 1978 No. 17 - May 11 1978
OFFICES AND OFFICERS ‑- COUNTY ‑- COMMISSIONERS ‑- PROPERTY ‑- HOUSING AUTHORITIES ‑- SALE OF PROPERTY BY COUNTY COMMISSIONER TO COUNTY HOUSING AUTHORITY
Except under certain special circumstances whereby the normal relationship between a board of county commissioners and a county housing authority is modified, as further indicated herein, the sale of real property by a county commissioner to a county housing authority within the same county does not violate any statutory provision concerning conflicts of interest.
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May 11, 1978
Honorable Joseph Panattoni
501 N. Pearl Street
P.O. Box 577
Ellensburg, Washington 98926
Cite as: AGO 1978 No. 17
By letter previously acknowledged you have requested the opinion of this office on a question which we have paraphrased as follows:
Does the sale of real property by a county commissioner to a county housing authority within the same county violate any statutory provisions concerning conflicts of interest?
We answer your question in the negative subject to the qualifications set forth in our analysis.
An answer to your question requires a clear understanding of the relationship between the board of county commissioners and a county housing authority functioning in the same county. [[Orig. Op. Page 2]] In the Housing Authorities Law (chapter 35.82)1/ the legislature created a housing authority in every county in the state.2/ Such an authority, however, may transact business and exercise its powers only after specific action is taken by the county commissioners or other governing body. See, RCW 35.82.030, which provides, in essence, that only when the county's governing body adopts a proper resolution declaring that there is a need for a housing authority and finding that housing in the county is deficient in certain respects may the authority legally function.
Nevertheless, once established, housing authorities "function as independent corporate entities." See, AGLO 1977 No. 8 [[to Robert V. Graham, State Auditor, on February 24, 1977, an Informal Opinion, AIR-77508]](copy enclosed) at p. 1. Each such authority is declared to be "a public body corporate and politic, . . .having all the powers necessary or convenient to carry out and and effectuate the purposes . . ." for which it was created. RCW 35.82.070. Thus,in Mercy v. Seattle, 71 Wn.2d 556, 561, 429 P.2d 917 (1967), the supreme court concluded that "both an established housing authority and the parent public body are . . . legislatively treated asseparate. . . agencies. . . ." (Emphasis supplied) Quoting with approval from Housing Authority of Los Angeles v. Los Angeles, 38 Cal.2d 853, 861, 243 P.2d 515 (1952), the court then continued as follows
". . . The housing authority was thereby created as a state agency, 'a public body corporate and politic' and is not an agent of the city in which it functions. Similarly the city under the Housing Authorities law is an agency of the state, functioning under state law to fulfill state purposes, and is not acting pursuant to its fundamental law to effect solely municipal objectives. . . . Each functioning body, the city and the housing authority, is a separate body politic vested with specific duties and powers. . . ." (Emphasis supplied)
[[Orig. Op. Page 3]]
Similarly, inWilcox v. Housing Auth. of King Cy., 66 Wn.2d 864, 405 P.2d 723 (1965), the court earlier held that although there is a close relationship between a housing authority and the county in which it operates (so that the county is naturally interested in the activities of a housing authority), such an authority is a separate entity and a separate body politic, saying:
"It is noted that some states have integrated housing authorities within existing departments of government. Such, however, has not been the course that the State of Washington has followed. The various housing authorities of cities and counties are separate entities invested with great autonomy to effectuate the purpose of their creation." (Emphasis supplied)
A further review of the law reveals that once a housing authority is established and functioning in a county, the only legal authority of the county over the affairs of the housing authority relates to the appointment and removal of its officers (RCW 35.82.040, 35.82.060) and the power to withhold the county's consent to condemnation by the authority (RCW 35.82.110). Accord, our letter dated May 2, 1968, to State Representative Jerry C. Kopet, (copy also enclosed).
The powers of a housing authority are vested in the commissioners of the authority. RCW 35.82.040. Moreover, in AGLO 1974 No. 39 [[to David F. Thiele Prosecuting Attorney of Island County, on March 28, 1974, an Informal Opinion, AIR-74539]](copy enclosed) we noted that there is no provision of law which would authorize the county commissioners to revoke the appointment of a housing authority commissioner prior to the expiration of a particular appointee's term. Housing authority commissioners may be removed from office during their respective terms, but only for inefficiency, neglect of duty or misconduct in office and only following a hearing with opportunity to be heard in person or by counsel. RCW 35.82.060. Finally, we can find no provision of law granting the county commissioners' control over the housing authority's budget, its decisions on the purchase of real estate or the construction of buildings or other business or financial transactions of the authority.3/
[[Orig. Op. Page 4]]
Next, let us turn to the conflict of interests statutes which are applicable to the members of a board of county commissioners. They are chapter 42.23 RCW, the beneficial interest statute; RCW 42.20.010, concerning misconduct of public officers; and chapter 42.22 RCW, the code of ethics for public officers and employees.4/ Other provisions are applicable to county commissioners but concern types of conduct not contemplated by your question5/ ‑-under which the only circumstance alluded to as a basis for application of any conflict of interests provision is the housing authority's purchase of real property owned by a county commissioner. Therefore, in this opinion we will not speculate on the great variety of other circumstances which, if possibly involved in such a purchase, might result in a violation of law.6/
For purposes of this analysis, we will also assume the decision to purchase the real property is made by the housing authority commissioners in good faith and in the independent exercise of their judgment in order to carry out a permissible public purpose of the housing authority. In addition, we will assume that the county has not taken and will not take any action, such as that permitted by the Housing Cooperation Law, supra, which may induce or assist the county [[Orig. Op. Page 5]] housing authority in the purchase of a parcel of real property owned by a county commissioner; and that the purchase is not made in anticipation of any promise of county assistance.
With these comments in mind, we turn to the pertinent conflict of interest statutes above noted.
(a) Chapter 42.23 RCW:
The beneficial interest prohibition is found in RCW 42.23.030 which provides in part as follows:
"No municipal officer shall be beneficially interested, directly or indirectly, in any contract which may be made by, through or under the supervision of such officer, in whole or in part, or which may be made for the benefit of his office, or accept, directly or indirectly, any compensation, gratuity or reward in connection with such contract from any other person beneficially interested therein. . . ."
It is clear that a county commissioner is a municipal officer as that term is defined in RCW 42.23.020(2) and that the sale of real property involves a "contract" as defined in sub‑paragraph (3) of that section. However, while the county commissioner is clearly beneficially interested in the contract concerning the sale of his real property that contract is not made by, through or under the supervision of the county commissioner in that capacity or for the benefit of his office. See, by way of analogy, our letter of January 19, 1965, to the prosecuting attorney of Walla Walla County, [[to Arthur R. Eggers]](copy enclosed), where we considered whether a city-county airport board could lawfully contract with an oil company whose local agent was a county commissioner. We there noted that if the local agent in question was, as a county commissioner, in a position of making, or supervising the making of contracts between the airport board and the oil company there would be a violation of RCW 42.23.030. However, reviewing the pertinent statutes we concluded as follows:
"While members of a joint county-city airport board are appointed, and their powers, duties and compensation, as well as terms, are fixed by action of the governing bodies of the participating county and city, the matter is fixed by [[Orig. Op. Page 6]] firm agreement under RCW 14.08.200, supra. Ordinarily, once the board is established and its members are appointed, neither the county nor the city nor the two of them jointly would appear to have any actual supervision over the making of contracts which the board is authorized to make under the terms of the agreement. If the local agent in question is merely a member of the board of county commissioners, and is not a member of the airport board, then neither he nor any governing body of which he is a member has the power to make the contract in question, or to exercise supervision over it."
Similarly, although the board of county commissioners appoints the commissioners of the housing authority, as discussed above, it has no actual supervision over contracts entered into by the county housing authority. Accordingly, we believe there would be no violation of chapter 42.23 RCW in the situation you have described.
(b) RCW 42.20.010:
This provision reads as follows:
"Every public officer who shall‑-
"(1) Ask or receive, directly or indirectly, any compensation, gratuity, or reward, or promise thereof, for omitting or deferring the performance of any official duty; or for any official service which has not been actually rendered, except in case of charges for prospective costs or fees demandable in advance in a case allowed by law; or
"(2) Be beneficially interested, directly or indirectly, in any contract, sale, lease, or purchase which may be made by, through or under the supervision of such officer, in whole or in part, or which may be made for the benefit of his office, or accept, directly or indirectly, any compensation, gratuity, or reward from any other person beneficially interested therein; or
[[Orig. Op. Page 7]]
"(3) Employ or use any person, money, or property under his official control or direction, or in his official custody, for the private benefit or gain of himself or another;
"Shall be guilty of a gross misdemeanor, and any contract, sale, lease or purchase mentioned in subdivision (2) hereof shall be void: PROVIDED, That this section shall have no application to any person who is a state employee as defined in RCW 42.18.130."
The factual circumstances you have presented to us do not indicate any failure to perform an official duty and, therefore, there is no violation of paragraph (1) of RCW 42.20.010. Similarly, you have not indicated that the county commissioner has used any person under his control or direction for the private benefit of himself or another and, therefore, paragraph (3) is not violated. As we concluded above with respect to chapter 42.23 RCW, the county commissioner is beneficially interested in the sale of the real property to the housing authority, but the contract or sale is not made under his supervision or for the benefit of his office. Thus, paragraph (2) of RCW 42.20.010 is also not violated by the situation you have described.
(c) Chapter 42.22 RCW:
Most provisions of this chapter apply only to officers or employees of a state agency or legislative employees, other than those included within the definition of "state employee" in RCW 42.18.130. However, certain paragraphs of RCW 42.22.040 are applicable to other public officers or public officials, including county commissioners.
Because the situation you have described does not involve the disclosure of confidential information required in an official capacity or the receipt of any compensation gift, reward or gratuity related to his services as a county commissioner, paragraphs (2), (5) and (6) of RCW 42.22.040 are inapplicable here. The first sentence of the same section, however, provides as follows:
"No officer or employee of a state agency, legislative employee, or other public officer shall use his position to secure special privileges or exemptions for himself or others."
[[Orig. Op. Page 8]]
The description of the situation giving rise to your question does not suggest that the county commissioner has in any way used his position to encourage or cause the county housing authority to purchase his real property. If such circumstances were present this provision, of course, would be violated and the official would be subject to criminal prosecution, removal from office and other penalties for misconduct or malfeasance in office. See RCW 42.22.070. However, under the facts as you have described them, we believe there is no violation of chapter 42.22 RCW.
We trust that the foregoing will be of some assistance to you.
Very truly yours,
RICHARD J. FINK
Assistant Attorney General
*** FOOTNOTES ***
1/This statute was amended by chapter 274, Laws of 1977, 1st Ex. Sess. (effective September 21, 1977), but not in a way which effects the validity of previous interpretations of chapter 35.82 RCW insofar as your present question is concerned.
2/City housing authorities are created by the same statute, exercise their powers following proper action by the city council or city commission, and have the same relationship to the city legislative body as county housing authorities have to the county legislative body.
3/In some situations, the county may have a more intimate involvement in the activities of a housing authority. Under the Housing Cooperation Law (chapter 35.83 RCW), a county may in several specific ways aid and cooperate in the planning, construction or operation of housing projects of any housing authority. These forms of assistance include contributions or loans, dedication or sale of interests in property, furnishing of recreational or utility facilities, purchasing housing authority obligations, and providing other improvements or services the county may otherwise furnish. RCW 35.83.030 and 35.83.050.
4/Although chapter 42.21 RCW prescribes an additional code of ethics for "public officials," that term is defined by statute in a way which does not include municipal officials. See, AGO 65-66 No. 69 [[to Bernard G. Lonctot, Administrative Securities Division, on January 18, 1966]], p. 5 at n. 4 (copy enclosed). Accordingly, we do not believe that chapter 42.21 RCW is applicable to a county commissioner.
5/See RCW 36.32.220 (misconduct relating to inventories of county property); RCW 36.18.160 ‑ 36.18.170 (taking illegal fees and failure to pay over fees); RCW 42.20.020 (performance of official duties by another); RCW 42.20.040 ‑ 42.20.070 (falsification of documents, claims and accounts); RCW 42.20.060 (fraudulent auditing of claims); RCW 42.20.070 (misappropriation of funds); Wash. Const. Article II, § 30 (bribery or corrupt solicitation); Wash. Const. Article XI, § 14 (private use of public funds).
6/Note that a specific provision of the Housing Authorities Law prohibits commissioners or employees of a housing authority from having an interest in a housing authority project, property or contract. RCW 35.82.050.