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HomeMy WebLinkAboutAgenda - 02-02-2021 Virtual Board Meeting; 12-5 - Information Item - Appointment of Commissioners to Full Membership on the Orange County ABC Board 1 INFORMATION ITEM Appointment of Commissioners to Full Membership on the Orange County ABC Board Local Alcohol Beverage Control Board Appointments The BOCC has expressed interest in having the commissioner appointee to the ABC Board be a voting member rather than a non-voting liaison. There are multiple options available to the BOCC if the BOCC is dissatisfied with some aspect of ABC operations or governance or if the BOCC simply believes changes should be made for other reasons. 1) Change the Chair. The BOCC has full authority to appoint the Chair. 2) Change or reduce salaries. Again full authority to do so rests with the BOCC. 3) Adopt standards of conduct for ABC board members. 4) Appoint commissioners or senior county employees to the ABC board. Both have been done by counties in North Carolina. This fourth option is further explored below. As authorized by statute the BOCC appoints both the members and the Chair of the ABC Board and members serve three-year terms. Due to the fact that terms are for three years it maybe administratively best to appoint a commissioner who has at least three years left in office. However,this is not absolutely necessary because vacancies are filled by the BOCC to complete the term of the member who created the vacancy and should a commissioner leave office another could be appointed to fill the ABC role for the duration of the original appointee's term. There may be some concern about the prohibition of dual office holding if a commissioner is appointed to the ABC board, however, so long as the appointment is ex officio the dual office holding prohibition is not a concern. Under North Carolina law ex officio appointees have the same rights and authority as any other appointee. Regarding the dual office non-issue North Carolina General Statute §128-1.2 reads: Ex officio service by county and city representatives and officials. Except when the resolution of appointment provides otherwise, whenever the governing body of a county or city appoints one of its own members or officials to another board or commission, the individual so appointed is considered to be serving on the other board or commission as a part of the individual's duties of office and shall not be considered to be serving in a separate office. As used in this section, the term "official" means (i) in the case of a county, the county manager, acting county manager, interim county manager, county attorney,finance officer, or clerk to the board and(ii)in the case of a city, the city manager, acting city manager, interim city manager, city attorney, finance officer, city clerk, or deputy clerk. As used in this section, the term "city"has the meaning provided in G.S. 160A-1. One important consideration in appointing a commissioner to the ABC board is the appointment would create occasional conflicts of interest for the appointed commissioner. That commissioner could not vote, and would have to be excused from voting, on ABC board members' salaries,the ABC board travel policy, or other items that could have a financial impact on the commissioner. There are two current ABC board members whose terms expire 6/30/21. According to the Orange County advisory board webpage Patrick Burns is serving the first of two potential terms and Jane Cousins is serving the second of two terms. Should the BOCC determine to appoint one,or more, of its own members to an ABC board position one of these two positions is most realistic for the appointment because outright removal of ABC members may only be for cause. Of the remaining members' terms one expires in 2022 and two expire in 2023. The ABC Board Response to this Proposal is Attached 2 COUNTY OF GRANGE ALCOHOLIC BEVERAGE CONTROL BOARD 601 VALLEY FORGE RD HILLSBOROUGH,NORTH CAROLINA 27278 919-732-3432 www.oranueab,c.com email:ocabc[aorangeabc.com PAT BURNS, Board Chair Board Members JANE COUSINS,Vice-Chair LIZ CARTER TONY DUBOIS, General Manager ALICE MAHOOD MIKE ZITO John L. Roberts Orange County Attorney This is in response to your email on October 9 regarding the BOCC potentially appointing a county commissioner to the ABC board as a voting member. In the ten plus years I have been in place as General Manager of the Orange County ABC Board the relationship with the liaison from the BOCC has been a valuable conduit for communication and insight for the ABC Board.The constructive two-way communication has always been viewed as positive and productive and adding a BOCC board member could complicate things. Changing what has always seemed to be a straightforward, productive, and collegial relationship could have unintended consequences. Based on feedback from the Board's lawyer if the BOCC liaison becomes a full voting member they will have multiple areas with a conflict or potential conflict of interest not allowing ethical issues that prevent the Board Member from participating as they do currently.Typically, besides the basic housekeeping votes we only have one or two votes per meeting on anything of consequence. The Board liaison currently has a great deal of inciteful input on important matters and potentially losing this valuable insight would be unfortunate. Regardless of any future decision on this matter the ABC Board looks forward to keeping this positive working relationship intact in the future. a Tony DuBois General Manager Orange County ABC Board www.Orangeabc.com 3 BEEMER, HADLER, WILLETT & LIN, P.A. Attorneys at Law WAYNE R.HADLER 1829 Ewa Franklin Sweet 430 Wcst Main Strap CHRISTOPHER M.W ILLETT Suite 800.13.Franklin Squair CatThoro.NC 27510 SHARON LIN Chapel Bill,NC 27514 [el(919)904-4634 tel(919)929-0391 fax(919)967-3063 fax(919)967.3063 ]GATE L COLBURN Paralegals: 3ENNA T.HORNIK PAM LINK-SETTS WWW.BHCWLAW.COM JANET WILLEIT JESSI SKELA ELLEN LEFKOWITZ CHARLES G.BEEMEY,REr1RED REX T.SAVERY.RETIREE] Email:cwiliega bhcwlaw.cam October 30, 2020 Patrick Burns,Board Chair Orange County Alcoholic Beverage Control Board 601 Valley Forge Road Hillsborough,NC 27278 RE: Potential Appointment of a County Commissioner to the ABC Board Dear Patrick: The Board has asked for my opinion regarding ramifications of the potential appointment of a Board Member of the Orange County Commissioners to the Orange County ABC Board. The appointment of a sitting commissioner is legally permissible under North Carolina law because the commissioner is allowed to hold one elective and one appointed office. However,it will likely pose a number of logistical and ethical challenges for a small quasi-municipal board whose finances are in many ways intertwined with the appointing authority's finances. The County Attorney's materials provided to the BOCC at their most recent work session seem to indicate that the consideration of the dual position is primarily motivated by the desire to increase the ABC Board's annual distributions and grants to the County. It is true that a dual Board member can consider and vote on actions that directly impact both municipal entities without expressly violating the State's conflict of interest statutes so long as their initial appointment and personal compensation are not at issue. However,an ex officio Board member would have additional ethical duties that go beyond the dictates of the conflict of interest statute (NCGS 18B-201 et seq.). Board Members' fiduciary obligations require them to discharge their duties(1)in good faith(2)with the care of an ordinarily prudent person and(3)in a manner the Board Member believes to be in the best interests of the entity he or she is serving- Even if a member of the BOCC only serves in an ex officio role to the ABC Board, the BOCC member clearly has some fiduciary duty to the ABC Board. The County and ABC Board's current respective financial situations may make it very difficult for even the most conscientious dual Board Member to act in a manner that the Board member reasonably believes to be in the best 4 interests of the ABC Board. There will certainly be an appearance of impropriety if the dual Board Member's decisions are motivated by maximizing County revenues rather than serving the best interests of the ABC Board. Most matters that the ABC Board votes on will impact the County's distribution,either directly or indirectly. The budget, grants,personnel decisions and policies(including but not limited to issues pertaining to the adoption of a living wage,salary compression,adoption of insurance plans, GM evaluation/compensation,and salary chart adjustments),and capital projects are all matters that will inherently impact the annual County distribution because excess profits largely revert to the County. For these matters,the safest,most protective remedy to protect the institutional integrity of the Board would be for the dual Board Member to recuse himself or herself from discussion and voting, consistent with past ABC Board practice to avoid apparent conflicts of interest. As you are aware,the Board Chair votes only to break a tic and so if one member needs to recuse themselves for real or apparent conflict of interest, the Board will be down to at most 3 voting members. It is easy to imagine that a conscientious dual Board Member would feel compelled to frequently abstain from consideration of issues such as those described above with direct and indirect fiscal impact to the County,which would inherently limit the productivity of the position. Conversely,if a dual Board Member failed to recuse themselves from discussion and voting on agenda items that directly or indirectly impacted the County's distribution, it could significantly impair efficient and collegial Board operations. Worse, if the dual Board Member attempted to use their ex officio position to maximize County revenues at the expense of the ABC Board's best interests,there would also be an appearance of impropriety sufficient for the Board to seek redress from the State ABC Commission, according to their General Counsel's office. In short,it will adversely impact the ABC Board to have an ex officio Board Member who will either(1)frequently need to abstain from consideration of Board business or(2)consider and vote on Boardmatters in a manner loyal to a different entity. Best, I Christopher M. Willett