Untitled Texas Attorney General Opinion ( 2003 )

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT
June 30,2003
The Honorable Scott Sherwood Opinion No. GA-0084
Carson County Attorney
303 Euclid Avenue Re: City of Skellytown’s authority to enter
P.O. Box 947 certain agreements with the Skellytown
Panhandle, Texas 79068-0947 Area Volunteer Firefighters-EMS Association
(RQ-0014-GA)
Dear Mr. Sherwood:
On behalf of the City of Skellytown (the “City”), you submit three questions about the City’s
authority to adopt a resolution concerning the Skellytown Area Volunteer Firefighters-EMS
Association (the “Association”), a nonprofit corporation incorporated on April 3,2000,’ and enter
into a lease agreement with the Association.
Backeround
At a special meeting on May 3,2000, the Skellytown City Council (the “Council”) approved
two agreements concerning the City’s relationship with the Association:
1. Resolution No. 2000-01, by which the City transferred to the Association
“all contracted and dedicated funds, existing [glovemmental budgets, and [blank
[alccounts previously designated for use by the Skellytown Volunteer Fire-EMS
Department.” Resolution No. 2000-01, Skellytown City Council (May 3, 2000),
attached to Request Brief, supra note 1; see also Skellytown City Council Special
Council Meeting Minutes (May 3,2000), attached to Request Brief, supra note 1.
2. Ratification of Titles, Lease of Facilities and Conveyance of Interest in
Realty and Personalty, under which the Council transferred to the Association (a)
“[t]he use of titles and all incidences of ownership . . . [for an annual lease payment
of $1 .OO] for a period of 10 years in the buildings, housing and related facilities
located at 412 Main Street,” in addition to “the buildings housing existing fire
equipment located at 204 Fourth Street . . ., but excluding one bay purchased and
‘See Brief accompanying Letter from Honorable Scott Sherwood, Carson County Attorney, to Honorable Greg
Abbott, Texas Attorney General, at l-2 (Jan. 30,2003) (on file with Opinion Committee) [hereinafter Request Brief].
The Honorable Scott Sherwood - Page 2 (GA-0084)
exclusively reserved by [the City] for its use,” and (b) “[a]11 property, associated
equipment, furniture and personalty related to the existing [flire-[flighting and EMS
facilities, including . . . radio equipment and antennae or other communication
equipment .” Ratification of Titles, Lease of Facilities, and Conveyance of Interest
in Realty and Personalty, $5 I-II, at l-2, attached to Request Brief, supra note 1
[hereinafter Ratification and Lease]. The Ratification and Lease also reserved to the
Association “[tlhe use of antennae space and the existing water tower and all
assigned radio frequencies or other communication spectrums.” Id. § III, at 2.
On May 2,2000, the day prior to the Council meeting, the City mayor, acting on the City’s behalf,
and the Association’s fire chief executed an Agency Agreement Between City of Skellytown and the
Association,2 which contained five covenants:
1. The City designated the Association as the City’s agent to provide City
inhabitants with “fire protection and other emergency services.”
2. The City retained “the right to supervise and control” the Association’s
“duties and activities” performed on the City’s behalf. Additionally, the City
designated the fire chief “as its agent for the purpose of day-to-day managernent and
supervision of the Department.”
3. “The agency relationship” established under this agreement “shall continue
until either party terminates the agency relationship by sixty . . . days written notice
to the other party.”
4. “The real and personal property owned by the Volunteer Fire Department
[flor providing fire protection and other emergency services are being used by and
are intended to be used by the [City] for fire protection and other emergency services.
Such property is considered to be leased to or borrowed by the [City] for fire
protection and other emergency services.”
5. The Association “allow[ed]” the City “to continue to collect the $1 SO
monthly fee attached to the water bills,” which the Association agreed “to accept
. . . for insurance and upkeep of the [City-lowned municipal pumper.“3
For brevity’s sake, we will refer to all three of these documents collectively as the “Agreements.”
*See Agency Agreement Between City of Skellytown and Skellytown Area Volunteer Firefighters-EMS Ass’n
(May 2,2000), attached to Request Brief, supra note 1, at l-2 [hereinafter Agency Agreement].
‘See id. at l-2.
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II. Presumed Validity of City’s Actions
Section 51.003 of the Local Government Code requires us conclusively to presume the
validity of the Council’s actions that occurred over three years ago in certain circumstances:
(a) A governmental act or proceeding of a municipality is conclusively
presumed, as of the date it occurred, to be valid and to have occurred in accordance
with all applicable statutes and ordinances if:
(1) the third anniversary of the effective date of the act or
proceeding has expired; and
(2) a lawsuit to annul or invalidate the act or proceeding has
not been filed on or before that third anniversary.
(b) This section does not apply to:
(1) an act or proceeding that was void at the time it occurred;
(2) an act or proceeding that, under a statute of this state or the
United States, was a misdemeanor or felony at the time the act or
proceeding occurred;
(3) an incorporation or attempted incorporation of a
municipality . . . ;
(4) an ordinance that, at the time it was passed, was preempted
by a statute of this state or the United States . . . ; or
(5) a matter that on the effective date of this section:
(A) is involved in litigation . . . ; or
(B) has been held invalid by a final judgment
of a court.
TEX. Lot. GOV’T CODE ANN. 8 51.003 (Vernon Supp. 2003). While section 51.003 does not
absolutely validate all past municipal actions, it provides “some defense” to an action that, although
valid and within a city’s authority to enact, was “enacted incorrectly from a procedural or clerical
standpoint.” HOUSECOMM.ONURBANAFFAIRS,BILLANALYSIS,Tex. H.B. 485,76th Leg., R.S.
(1999).
Given that the Council approved the Agreements in question on May 3,2000--cwer three
years ago-and that no litigation has been filed concerning their validity, the Agreements are valid
The Honorable Scott Sherwood - Page 4 (GA-0084)
unless any of the conditions specified in subsection (b) apply. Under the facts the City has provided,
only subsections (b)( 1) and (b)(2) must be addressed. Consequently, we examine the issues you raise
only to determine whether the Agreements are void ab initic or whether the Council’s actions in
adopting the Agreements constitute a criminal violation.
III. Dual Officeholdine, Incompatibility, and Conflict of Interest
At the time of the May 3, 2000 meeting, one Council member also served as the
Association’s EMS director and, as such, a member of the Association’s board of directors.4 He held
his Council position prior to the Association’s incorporation, at which time he was named an
“initial” director of the Association.’ The Council member voted on all of the matters concerning
the Association that were before the Council at the meeting. See Request Brief, supra note 1, at l-2.
Given his dual capacity as a Council member and an Association trustee, the City is concerned about
the Agreements’ validity.
Accordingly, the City asks first about the “legal consequences of an individual serving
simultaneously on the . . . Council and Board of Directors of the Association and voting on”
the resolution transferring numerous City assets to the Association. See Request Brief, supra note
1, at 1. You are particularly concerned about the common-law doctrine of incompatibility, but the
constitutional prohibition on dual officeholding and statutory conflict-of-interest restrictions also
must be considered. Restrictions that the municipal oath of office, the City charter, or City
ordinances may place on dual service or conflict of interest may apply, too, and you should consider
whether, under any of these, the Agreements are void ab initio; we do not consider these documents
here. See Tex. Att’y Gen. Op. No. JC-0143 (1999) at 3 (“In deference to city officials, this office
does not generally construe city charters or ordinances.“); see, e.g., TEX. LOC. GOV’T CODE ANN.
6 171.007(b) (V emon 1999) (stating that Local Government Code chapter 171, which regulates
conflicts of interest, “is cumulative of municipal charter provisions and municipal ordinances
defining and prohibiting conflicts of interest”).
A. Dual Officeholding
Article XVI, section 40 of the Texas Constitution, which prohibits a person from
simultaneously holding more than one “civil office of emolument,” does not apply. TEX.CONST. art.
XVI, 0 40. Although the Council member serves as both a volunteer emergency medical technician
and an Association director, neither of these positions are offices for constitutional purposes. See
Tex. Att’y Gen. Op. Nos. JC-0385 (2001) at 1-2; JC-0199 (2000) at 1; cJ: Tex. Att’y Gen. Op. No.
DM-303 (1994) at 1 (stating that executive director of nonprofit housing corporation is not an officer
for purposes of article XVI, section 40).
4See Articles of Incorporation of Skellytown Area Volunteer Firefighters-EMS Ass’n, art. IX, at 5 (Apr. 3,
2000), attached to Request Brief, supra note 1.
*Id. art. IX, at 4 (Apr. 3,200O); Telephone conversation with James T. Shelton, Skellytown City Attorney (May
21, 2003) (stating that Council member was appointed to office in March 1999).
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B. Incompatibility
The common-law doctrine of incompatibility is “not a single doctrine,” but comprises
three aspects: (1) conflicting loyalties; (2) self-appointment; and (3) self-employment. Tex. Att’y
Gen. Op. No. JC-0564 (2002) at 1-2; see also Tex. Att’y Gen. Op. No. JC-0199 (2000) at 1.
Conflicting-loyalties incompatibility applies only to the holding of two public offices. See Thomas
v. Abernathy County Indep. Sch. Dist., 290 S.W. 152, 153 (Tex. Comrn’n App. 1927, judgm’t
adopted); Tex. Att’y Gen. Op. No. GA-0015 (2003) at 1-2. Because a director of a volunteer fire
department is not a public officer, conflicting-loyalties incompatibility does not apply here.
Self-appointment and self-employment incompatibility preclude an officer from being
appointed to or employed in a position over which the officer has appointment or employment
authority. See Ehlinger v. Clark, 8 S.W.2d 666,674 (Tex. 1928). Determining whether either self-
appointment or self-employment incompatibility applies to a member or a director of a volunteer fire
fighters association traditionally requires an analysis of the municipal charter or the association’s
articles of incorporation or bylaws to ascertain the degree of control the municipality has over the
association. For example, where a city charter authorizes the fire chief to appoint fire fighters
without city approval, a city council member is not precluded from appointment to the fire
department. See Tex. Att’y Gen. Op. No. JC-0199 (2000) at 1. Similarly, where a municipality does
not own, control, or supervise a volunteer fire department, a member is not precluded from serving
on the city council. See Tex. Att’y Gen. Op. No. JC-0385 (2001) at 2; Tex. Att’y Gen. LO-94-070,
at 2. If the facts indicate that an appointment or employment is incompatible with an office already
held, the appointment or employment is void. See Tex. Att’y Gen. Op. No. JC-0455A (2002) at 2.
The materials you have submitted suggest, but do not demonstrate conclusively, that the City
had little control over the Association at the time the Agreements were executed. For example,
under the Association’s bylaws, its members elect directors from among themselves; thus, the City
has no role in appointing the fire chief, assistant fire chief, fire captains, and ambulance director!
Nonetheless, the Agency Agreement reserves to the City “the right to supervise and control the duties
and activities of the Volunteer Fire Department performed on” the City’s behalf.7
Even if the City retained sufficient control over the Association so that the Council member’s
dual positions are incompatible, however, the Agreements are not void. See TEX.LOC.GOV’T CODE
ANN. 9 5 l.O03(b)( 1) (V emon Supp. 2003). The effect of any incompatibility is to void the Council
member’s acceptance of a position on the Association’s board of directors. See Tex. Att’y Gen. Op.
No. JC-0455A (2002) at 2. Accordingly, his votes as a member of the Council were valid.’
6See By-Laws of Skellytown Area Volunteer Firefighters-EMS Ass’n, art. III, $0 3.01-3.04, at 2, attached to
Request Brief, supra note 1.
‘Agency Agreement, supra note 2, at 1 (covenant 2).
‘Section 21.002 of the Local Government Code, which became effective May 3,2001, does not apply to this
city council meeting, which occurred a year to the day before section 2 1.002’s effective date. See Act of Apr. 20,2001,
(continued...)
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c. Conflict of Interest
Although the Council member’s position on the City Council on May 3,200O is not
in doubt, he was required to comply with any applicable conflict-of-interest provision set forth in
chapter 171 of the Local Government Code. See TEX. LOC. GOV’T CODE ANN. 8 171 .OOl( 1)
(Vernon 1999) (defining the term “local public official”). See generally id. ch. 17 1 (Vernon 1999)
(“Regulation of Conflicts of Interest of Officers of Municipalities, Counties, and Certain Other Local
Governments”).’
Section 17 1.004 generally prohibits a local official, including a city council member, from
participating in a matter involving a business entity, including a nonprofit corporation, in which the
official has a substantial interest if the matter will “have a special economic effect on the business
entity that is distinguishable from the effect on the public.” Id. 8 171.004(a)( 1); see id. 8 171.001(2)
(defining the term “business entity,‘); see also Tex. Att’y Gen. Op. No. DM-303 (1994) at 3
(concluding that a nonprofit corporation is a business entity for chapter 171 ‘s purposes). An official
has a substantial interest in a business entity if, in the previous year, he or she received more than
ten percent of his or her gross income from the business entity. See TEX.LOC. GOV’T CODE ANN.
0 171.002(a)(2) (V emon 1999). A local official who has such a substantial interest must “file . . .
an affidavit stating the nature and extent of the interest and . . . abstain from” participating further
in the matter. Id. 9 171.004(a). But see id. 5 171.004(c) (excepting an official from the abstention
requirement if a majority of the governmental body’s members are likewise required to file affidavits
on the same issue). Given that the Ratification and Lease required the City to lease certain buildings
*(...continued)
77th Leg., R.S., ch. 42,s 3,200l Tex. Gen. Laws 73,73; Tex. Att’y Gen. Op. No. JC-0564 (2002) at 3; Skellytown City
Council Special Council Meeting Minutes (May 3, 2000), attached to Request Brief, supra note 1. Section 21.002
expressly authorizes a member of a municipal governing body to volunteer in certain organizations only if the governing
body officially permits the service:
A member of the governing body of a municipality may serve as a volunteer for an
organization that protects the health, safety, or welfare of the municipality regardless of whether the
organization is funded or supported in whole or part by the municipality if the governing body adopts
a resolution allowing members of the governing body to perform service of that nature.
TEX.LOC.GOV’TCODEANN.0 2 1.002 (Vernon Supp. 2003). Section 2 1.002 preempts the common-law incompatibility
doctrine “with regard to that aspect of self-employment involving dual service on city councils and volunteer fire
departments. . . . [D]ual service in those specific instances is necessarily prohibited unless a city council adopts the kind
of resolution” section 2 1.002 describes. Tex. Att’y Gen. Op. No. JC-0564 (2002) at 4. Currently, therefore, neither the
Council member being discussed here nor any other Council member currently may serve as “a volunteer for an
organization that protects the health, safety, or welfare of the municipality,” TEX.LOC.GOV’T CODEANN. 6 2 1.002
(Vernon Supp. 2003), unless the City has adopted a resolution under section 2 1.002, but no such resolution was necessary
on May 3,200O.
‘The Association’s bylaws regulate conflicts of interest, but the conflict-of-interest provision pertains solely to
a financial transaction between the Association and an Association director, officer, or member. See By-Laws of
Skellytown Area Volunteer Firefighters-EMS Ass’n, art. VII, $ 7.05, at 7, attached to Request Brief, supra note 1. It
does not apply here.
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to the Association for an annual lease payment of $1 and authorized the City to collect a fee with
utility payments to give to the Association, the Council’s actions on May 3, 2000 may be found
to have a “special economic effect” on the Association for purposes of section 171.004. Id.
8 171.004(a)(l); see also Tex. Att’y Gen. Op. No. DM-279 (1993) at 7 (stating that this office
ordinarily does not decide whether a particular action will have a special economic effect on a
particular entity).
An uncompensated director of a nonprofit corporation does not have a substantial interest
in the corporation for purposes of section 171.004 and is, therefore, not required to comply with
section 171.004’s affidavit and abstention requirements. See Tex. Att’y Gen. Op. No. GA-0068
(2003) at 3-4. Section 171.009 expressly permits a local public official to serve as an
uncompensated director of a private nonprofit corporation: “It shall be lawful for a local public
official to serve as member of the board of directors of private, nonprofit corporations when such
officials receive no compensation or other remuneration from the nonprofit corporation or other
nonprofit entity.” TEX.Lot. GOV’T CODE ANN. 8 17 1.009 (Vernon 1999). Thus, a city council may
engage in transactions with a nonprofit corporation even if a council member also serves as an
uncompensated director of the nonprofit corporation. See Tex. Att’y Gen. Op. No. GA-0068 (2003)
at 2-3. Under the Association’s bylaws, a member of the Association’s board of directors receives
no salary for serving on the Association’s board.”
Section 171.009 does not apply to a council member who is compensated for his or her
services to the corporation, however, either as a director or as a member. It is not clear whether, at
the time of the Council meeting, the Council member received compensation from the Association
for his services as an Association member.” Some municipalities compensate their volunteer fire
fighters. The legislature has noted, for example, that “many city charters allow for a modest level
of compensation for volunteer fire fighters.” HOUSE COMM. ONURBANAFFAIRS, BILL ANALYSIS,
Tex. S.B. 738,77th Leg., R.S. (2001) at 1; see Tex. Att’y Gen. Op. No. JC-0199 (2000) at 2 (stating
that a Gilmer volunteer fire fighter “is compensated at the rate of $4.00 per fire and $4.00 per drill,
and receives an annual contribution from the city to the Fire Fighters Relief and Retirement Fund,‘).
If the Council member, in fact, received more than ten percent of his gross income in 1999 from the
fire department for his services as a member, section 171.004 obligated him to file an affidavit
describing his interest prior to the May 3,200O meeting and to decline participation in the discussion
and vote on the matters specially affecting the Association. See TEX. LOC. GOV’T CODE ANN.
8 171.004(a) (V emon 1999). Failure to have done so may have rendered the Agreements voidable
under chapter 17 1, see id. $9 17 1.003,17 1.006, but the Agreements are not void ab initio in any case
under chapter 17 1. Accordingly, the Agreements are conclusively presumed valid under section
51.003 of the Local Government Code. See id. 5 51.003(a), (b)(l) (Vernon Supp. 2003).
“See id. art. VI, 3 6.09, at 6.
“See Letter from James T. Shelton, Skellytown City Attorney, to Kim Oltrogge, Office of theAttorneyGeneral
at 1 (May 5,2003) (on file with Opinion Committee) [hereinafter Shelton Letter of May 5,2003] (indicating that Mr.
Shelton would inform the office when he received compensation information)
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IV. Lease and Conveyance of City Property to the Association
The City asks second about the legality of the Ratification and Lease, which served to convey
to the Association (1) buildings, housing, related facilities, and (2) “[a]11 property, associated
equipment, furniture, and personalty” related to the facilities. See Request Brief, supra note 1, at 2;
Ratification and Lease, supra page 2, art. II, at 1. Under the Ratification and Lease, the buildings
and related facilities are leased to the Association for a period of ten years for $1 per year, while title
to the personal property is “relinquished and . . . conveyed.” Ratification and Lease, supra page 2,
art. II, at 1. Citing article III, section 52 of the Texas Constitution and Attorney General Opinion
JC-0439, the City avers that the conveyances are legal because they “serve[] a public purpose of the
City and . . . [are] subject to adequate controls to ensure that the public purpose is accomplished
during the term of’ the agreement between the City and the Association. Request Brief, supra note
1, at 2; see also Agency Agreement, supra note 2.
Attorney General Opinion JC-0439, which the City cites, analyzes a county’s authority to
transfer county funds to six different nonprofit organizations under article III, section 52. See Tex.
Att’y Gen. Op. No. JC-0439 (2001) at 2. To ascertain whether a grant to a particular nonprofit
organization serves legitimate county purposes, that opinion first considered specific statutes that
authorized counties to take on certain responsibilities. See id. at 5-7; see also TEX. FAM. CODE
ANN. $5 264.006,264.402,264.403 (Vernon 2002); Tex. Att’y Gen. Op. No. JC-0582 (2002) at 2
(declining to address whether a lease agreement between a county and a museum is valid under
article III, section 52 if the county “lacked an affirmative grant of express or implied authority to
enter into the lease agreement”).
The analysis Attorney General Opinion JC-0439 uses applies by analogy to a general-law
municipality. Both a county and a general-law municipality have authority to exercise onlythose
powers expressly granted to them or necessarily implied.12 Thus, the City’s authority to transfer
property to the Association must be found in, or necessarily implied from, a statute.
Section 5 1.015(a) of the Local Government Code provides the requisite authority for both
the lease of buildings and related facilities and the conveyance of personal property and equipment.
Under section 5 1.015, a Type A general-law municipality may “lease, grant, or convey property
located in or outside the municipality.” TEX.Lot. GOV’T CODE ANN. 8 51.015(a) (Vernon 1999).
Given this statutory authority, we next consider the transaction’s constitutionality.
Article III, section 52 of the Texas Constitution withholds from the legislature all power to
authorize a municipality “to lend its credit or to grant public money or thing of value in aid of; or to
any individual, association or corporation.” TEX.CONST. art. III, 9 52(a). The Texas Supreme Court
‘*See also id. (stating that the City is a Type A general-law city). Compare Guynes v. Galveston County, 861
S.W.Zd 861,863 (Tex. 1993) (stating that article V, section 18 of the Texas Constitution permits a commissioners court
to exercise broad discretion to conduct county business, although “the legal basis for any action taken must be grounded
ultimately in the constitution or statutes”), with City of Soccorro v. U.S. Fireworks of Am., 842 S.W.2d 779, 780 n. 1
(Tex. App.-El Paso 1992, writ denied) (stating that a general-lawmunicipality’spowers are “limited to those specifically
granted by the legislature as enumerated in the relevant statutes”).
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has interpreted this provision to prohibit legislation requiring “gratuitous payments to individuals,
associations, or corporations.” Tex. Mun. League Intergov ‘tl Risk Pool v. Tex. Workers ’Comp.
Comm’n, 74 S.W.3d 377, 383 (Tex. 2002). But, as the court has pointed out, “[a] political
subdivision’s paying public money is not ‘gratuitous’ if the political subdivision receives return
consideration.” Id. The court will uphold the constitutionality of legislation requiring payments to
individuals, corporations, or associations if the statute “( 1) serves a legitimate public purpose; and
(2) affords a clear public benefit received in return.” Id. The court uses a “three-part test” to
determine “if a statute accomplishes a public purpose consistent with section 52(a)“:
Specifically, the Legislature must: (1) ensure that the statute’s predominant purpose
is to accomplish a public purpose, not to benefit private parties; (2) retain public
control over the funds to ensure that the public purpose is accomplished and to
protect the public’s investment; and (3) ensure that the political subdivision receives
a [sufficient] return benefit.
Id.; see id. at 384 (stating that a public subdivision must receive “sufficient-not equal-return
consideration” to render payment of public funds constitutional under article III, section 52). “This
oftice has identified similar principles for determining if a particular expenditure serves a public
purpose.” Tex. Att’y Gen. Op. No. GA-0078 (2003) at 4. Thus, the governing body of a general-law
municipality “‘will avoid violating article III, section 52 if it (i) determines in good faith that the
expenditure serves a public purpose and (ii) places sufficient controls on the transaction, contractual
or otherwise, to ensure that the public purpose is carried out.“’ Id. at 4-5 (quoting Tex. Att’y Gen.
Op. No. JC-0582 (2002) at 6). A transaction that violates article III, section 52 is void ab initio. See
Tex. Att’y Gen. LO-90-99, at 2.
Provided that the lease and conveyance satisfy the three-part test under article III, section 52
of the constitution, the City was authorized to lease and convey its property in this situation. See
TEX.CONST.art. III, 8 52; TEX.Lot. GOV’TCODEANN. 5 5 1.034 (Vernon 1999); Tex. Mun. League
Intergov’tl Risk Pool, 74 S.W.3d at 384.
The City suggests, in relation to the second question, that if the Agency Agreement is void
due to the Council member’s dual service, the transfer of City property may therefore be invalid.
Request Brief, supra note 1, at l-2. Because the Agency Agreement is not affected by the dual
service, we need not answer this question.
v. Collecting a Mandatory Fee in Water Bills to Pav for Volunteer Fire Fiehtine Services
We understand that the City has, for many years, “included a mandatory fee in the water bills
to help pay for volunteer fire fighting services. In May[] 2000, the mandatory fee included in the
monthly water bill was $1.50 per bill. The Agency Agreement between the City and the Association
provides that the City may continue to collect the mandatory fees” for the Association’s use. Id.
at 2. Accordingly, the City asks whether it may “include a mandatory fee in the water bills to pay
for volunteer fire fighting services.” Id.
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In November 2002, the City obtained an opinion from the Texas Municipal League, which
suggests that the City lacks authority to impose such a fee.13 Citing a 1985 attorney general opinion,
JM-338, and a 1924 decision of the Texas Court of Civil Appeals, the Municipal League reasoned
that the City did not have the necessary statutory authority to collect a tax to pay for volunteer fire
services:
Any fee attached to a utility bill by a general law city, which is not used to
cover the expenses of providing the utility service for which customers are being
billed, is a tax. General law cities, however, possess only those taxing powers that
the legislature or the constitution expressly grants them. I am aware of no statutory
authority for such a tax used to pay for volunteer fire services. The Texas Attorney
General has similarly concluded that a general law city may not attach a monthly fee
on utility bills to finance the police department.
TML Letter of Nov. 4, 2002, supra note 13, at 1 (citations omitted); see Vance v. Town of
Pleasanton, 261 SW. 457,458 (Tex. Civ. App.-San Antonio 1924, writ granted), affil, 277’S.W.
89 (Tex. Comm’n App. 1925, judgm’t adopted); Tex. Att’y Gen. Op. No. JM-338 (1985) at l-2.
Attorney General Opinion JM-338 determined that a $6 charge, which a general-law city
assessed against all home and business owners in the city, for financing the city’s police department
is an unlawful tax. See Tex. Att’y Gen. Op. No. JM-338 (1985) at 1-2. The charge appeared “on
monthly utility bills,” but because it was intended for the police department’s use, it ‘had no
connection to the costs of providing utility services. Id. at 1. Accordingly, the charge was “intended
to raise revenue” and was a tax. Id. Because a general-law municipality had no “statutory authority
. . . for [this] method of taxation,” the opinion concluded that the $6 charge was “not a proper
method for raising revenue to support the police department.” Id. at l-2.
A Type A general-law municipality has the prerequisite specific statutory authority to levy
certain taxes. See also TEX. CONST.art. XI, $ 4 (permitting a general-law municipality to “levy,
assess and collect such taxes as may be authorized by law”). For example, a municipality in which
a fire control, prevention, and emergency medical services district is established must impose an
additional sales and use tax “in the area of the district” to finance the district’s operation. TEX.TAX
CODEANN. 8 321.106(a) (Vernon 2002). A general-law municipality has no statutory authority to
levy a tax for fire protection services by adding a tax to each utility user’s bill, however.
Consequently, the City may not levy the tax in this manner, and the provision in the Agency
Agreement allowing the City “to continue to collect the $1.50 monthly fee attached to the water
bills”‘4 is void.
13Letter from Bennett Sandlin, Assistant General Counsel, Texas Municipal League, to Honorable Lucille
Lawrence,Mayor of Skellytown, at 1 (Nov. 4,2002) [h ereinafter TML Letter ofNov. 4,2002], attached to Shelton Letter
of May 5,2003, supra note 11.
14see Agency Agreement, supra note 2, at 2 (covenant 5).
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SUMMARY
Because the City of Skellytown executed various agreements
(the “Agreements”) with the Skellytown Area Volunteer Firefighters-
EMS Association (the “Association”) over three years ago and no
lawsuits to invalidate them have been filed, the Agreements are
“conclusively presumed” to be valid unless, among other things, the
Agreements were void ab initio. See TEX.LOC.GOV’TCODEANN.
8 5 1.003 (Vernon Supp. 2003). The fact that a city council member
was, at the time the City approved the Agreements, also a director of
the Association does not affect the Agreements’ validity.
The City had statutory authority to convey to the Association
personal property, such as equipment and furniture, and to lease City
buildings and facilities to the Association. A conveyance or lease
complies with article III, section 52 of the Texas Constitution if (1)
it primarily accomplishes a public purpose; (2) the City retains
sufficient control to ensure that the public purpose would be
accomplished; and (3) the City receives a sufficient return benefit.
A Type A general-law municipality has no statutory authority
to attach a $1.50 charge to water bills to fund the costs of volunteer
fire fighting services.
Very truly yours,
BARRY R. MCBEE
First Assistant Attorney General
DON R. WILLETT
Deputy Attorney General for Legal Counsel
NANCY S. FULLER
Chair, Opinion Committee
Kymberly IS. Oltrogge
Assistant Attorney General, Opinion Committee