Can a New York town council member also serve as the town's financial operations manager when the town is in fiscal crisis and needs experienced help?

Plain-English summary

The Town of New Paltz was in fiscal crisis after misuse of public funds and inadequate oversight by a previous administration. The town supervisor needed temporary help to stabilize the Town's finances and prepare a budget. A council member had become deeply familiar with the Town's finances and was the natural candidate for a new "financial operations manager" position. The Town Counsel asked whether the council member could simultaneously serve in both roles.

The AG concluded no. Two layers of analysis support that result.

First, the common-law incompatibility doctrine. The financial operations manager would report directly to the town board (of which the council member is part). One person cannot be both the supervisor and the supervised. People ex rel. Ryan v. Green (1874). The AG cited multiple prior informal opinions reaching the same conclusion in similar contexts (town board member as zoning-board secretary, as planning-board administrative assistant, as town constable).

Second, even though a local government can sometimes overcome the common-law incompatibility rule by adopting a local law that finds an overriding public interest, this case did not warrant that exception. The supervision would be "direct and pervasive": the financial operations manager would report directly to the town board, which has general management and control of the Town's finances under Town Law § 64(1) and audits claims against the Town under § 119(1). The town board needs to review the financial operations manager's work impartially. That impartiality would be undermined when the board is reviewing the work of one of its own members. Even if actual impartiality were possible, the appearance of impropriety would be a serious problem given the recent "scathing" State Comptroller report on the Town's finances.

The supervisor had also asked about appointing the council member as "director of finance" under Town Law § 52(1), which applies to suburban towns and does not require a local law. But New Paltz is not a suburban town as statutorily defined under Town Law § 50-a(1), (2), so that route was unavailable.

Currency note

This opinion was issued in 2013. 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.

Common questions

What did the opinion conclude?

That a town council member could not simultaneously serve as the town's financial operations manager. The supervision-supervised relationship between the town board and the financial operations manager makes the two positions incompatible under New York's common-law incompatibility doctrine.

Could the Town pass a local law overriding incompatibility?

In some cases yes, but in this one no. The AG noted that local governments may overcome common-law incompatibility by local law if they find an overriding public interest. But the supervision here would be "direct and pervasive" and the appearance of impropriety would be especially harmful given the recent fiscal crisis and Comptroller report.

What about the suburban-town director-of-finance route?

Town Law § 52(1) authorizes a town supervisor in a "suburban town" (defined in § 50-a(1), (2)) to appoint a director of finance without local law or town board approval. New Paltz did not qualify as a suburban town, so this route was unavailable. Other towns that do qualify might have more flexibility.

What was the policy concern?

The town board oversees the Town's finances and audits claims. The financial operations manager would do day-to-day financial work that the board would review. Having one person on both sides of that review compromises the check-and-balance structure. The 1923 Wood v. Town of Whitehall case is the foundational citation for the principle that a board should not appoint its own members to positions the board oversees.

Could the Town hire someone else for the manager role?

Yes. The opinion only addressed dual office-holding. Town Counsel could appoint another qualified person (not a current board member) to the financial operations manager role.

Could the council member resign from the board to take the position?

The opinion does not directly address this, but the analysis suggests yes: incompatibility goes away if the person holds only one position. The council member would have to resign from the board first.

Background and statutory framework

The Town's home-rule authority comes from Municipal Home Rule Law § 10(1)(i), (ii)(a), which lets a town adopt local laws relating to its property, affairs, and government, including the powers and duties of officers and employees, as long as the law is not inconsistent with the constitution or general state law. The AG agreed the Town could adopt a local law creating the temporary financial operations manager position. The question was whether a sitting council member could fill it.

The town board structure is set by Town Law § 60(1) (board composed of supervisor and four council members) and § 20(1)(a) (council members). The board's general fiscal management role is in Town Law § 64(1), and its audit-of-claims role is in § 119(1).

The common-law incompatibility doctrine was articulated in People ex rel. Ryan v. Green, 58 N.Y. 295 (1874), and the related self-appointment prohibition in Wood v. Town of Whitehall, 120 Misc. 124 (Sup. Ct. Washington Co.), aff'd, 206 A.D. 786 (3d Dep't 1923). Earlier AG informal opinions applying the doctrine to similar situations: Op. Att'y Gen. (Inf.) No. 90-56 (town board member and zoning-board secretary), No. 88-3 (town board member and planning-board administrative assistant), No. 84-22 (town board member and town constable). For exceptions by local law: No. 91-42, No. 87-47, No. 96-4.

Citations

The town structure: Town Law § 60(1), § 20(1)(a). Town board fiscal management: Town Law §§ 64(1), 119(1). Suburban-town finance director route (unavailable here): Town Law § 52(1), with the suburban-town definition at § 50-a(1), (2). Home-rule authority for the temporary position: Municipal Home Rule Law § 10(1)(i), (ii)(a). Common-law incompatibility doctrine: People ex rel. Ryan v. Green, 58 N.Y. 295 (1874), and Wood v. Town of Whitehall, 120 Misc. 124 (1923).

Source

• Landing page: https://ag.ny.gov/libraries-documents/opinions/opinions-year
• Original PDF: https://ag.ny.gov/sites/default/files/opinions/2013-1_pw.pdf

Original opinion text

Town Law §§ 20(1)(a), 50-a(1), 50-a(2), 52(1), 60(1), 64(1), 119(1); Municipal Home Rule Law §§ 10(1)(i), 10(1)(ii)(a)

A town council member may not also serve as financial operations manager.

March 6, 2013
William M. Wallens
Counsel
Town of New Paltz
Roemer, Wallens, Gold & Mineaux, LLP
13 Columbia Circle
Albany, NY 12203

Informal Opinion
No. 2013-1

Dear Mr. Wallens:

You have requested an opinion relating to whether the positions of town council member and town financial operations manager or, alternatively, director of finance can be held by the same person. As explained below, we are of the opinion that they cannot.

You have explained that evidence of misused public funds and inadequate oversight by a previous administration recently have come to light and now the Town is in a fiscal crisis. The town supervisor, as the Town's chief fiscal officer, has been working to stabilize the Town's financial situation. She has found that she needs the temporary assistance of a fulltime financial operations manager so that she can both resolve the Town's current fiscal problems and prepare a budget for the next year. In the course of the supervisor's remedial financial work to date, she has relied heavily on the assistance of a council member, who has become familiar with the minutia of the Town's finances. The supervisor would like the town board (comprised of the town supervisor and four persons denominated council members, Town Law § 60(1); id. § 20(1)(a)) to adopt a local law creating the temporary position of financial operations manager, who would be subject to the supervision and control of the town board, and then she would like the town board to appoint the council member to the new position. The council member also would continue to serve on the town board. If appointed, the member would recuse herself from town board discussion and voting relating to compensation for the position of financial operations manager.

First, we are of the opinion that the Town is authorized to adopt a local law creating the temporary position of financial operations manager. Pursuant to its home rule authority, it may adopt a local law relating to its property, affairs and government and relating to the powers and duties of its officers and employees, insofar as the local law is not inconsistent with the provisions of the Constitution or a general state law. Municipal Home Rule Law § 10(1)(i),(ii)(a). The creation of the temporary position of financial operations manager, in our opinion, falls within this authority.

We believe, however, that because of the town board's responsibility to oversee the Town's fiscal operations, a council member should not simultaneously hold the position of financial operations manager. As an initial matter, we repeatedly have concluded that one person cannot serve as both a member of a local government's governing body and a subordinate second position for the same local government. See, e.g., Op. Att'y Gen. (Inf.) No. 90-56 (town board member and secretary to zoning board of appeals); Op. Att'y Gen. (Inf.) No. 88-3 (town board member and administrative assistant to town planning board). This is a fundamental principle of incompatibility: one person cannot be both the supervisor and the supervised. People ex rel. Ryan v. Green, 58 N.Y. 295, 304 (1874); see also Op. Att'y Gen. No. 88-F1; Op. Att'y Gen. (Inf.) No. 83-52.

We previously have opined that a local government may overcome the common law principle of incompatibility by local law after finding that the overall public interest would be served. See, e.g., Op. Att'y Gen. (Inf.) No. 91-42; Op. Att'y Gen. (Inf.) No. 87-47. Under the circumstances described, however, we doubt that a local law establishing an exception to the rule of incompatibility would serve the public's interest.

First, here the supervision would be direct and pervasive. The financial operations manager will report directly to the town board, which will have supervision and control of her employment. This fact alone has been enough for us to conclude that a local law overcoming incompatibility will not serve the public interest. Op. Att'y Gen. (Inf.) No. 84-22 (town board member and town constable); but see Op. Att'y Gen. (Inf.) No. 96-4 (town supervisor and temporary flood disaster administrator).

Second, the checks and balances over municipal finances would be eroded if a council member simultaneously served as financial operations manager. The town board is responsible for the general management and control of the Town's finances. Town Law § 64(1). Additionally, the town board audits claims against the Town before they are paid. Town Law § 119(1). The financial operations manager will be responsible for rectifying the consequences of past financial mismanagement, maintaining the Town's day-to-day course to financial stability, and developing procedures to inhibit future mismanagement. The town board must be able to review the actions of the financial operations manager impartially to ascertain that they are in the Town's financial best interest. Such impartiality is questionable when a board is reviewing the work of one of its members in another capacity. Op. Att'y Gen. No. 88-F1. Even if impartiality is possible, the situation would create the appearance of impropriety. Avoiding even the appearance of impropriety is crucial in light of what the town supervisor described as a "scathing" financial report recently issued by the Office of the State Comptroller, in which the town board's responsibility for overseeing the Town's finances was emphasized.

For these reasons, we conclude that a town council member may not also serve as financial operations manager.

The Attorney General issues formal opinions only to officers and departments of state government. Thus, this is an informal opinion rendered to assist you in advising the municipality you represent.

Very truly yours,
KATHRYN SHEINGOLD
Assistant Solicitor General
in Charge of Opinions

Footnote 1: You have suggested that the town supervisor alternatively could appoint the council member as director of finance pursuant to Town Law § 52(1), which would not require a local law or town board approval. This statute applies to suburban towns and you have advised that the Town is not a suburban town as statutorily defined. Town Law § 50-a(1),(2). This authority is therefore unavailing.

Footnote 2: Similarly, we have opined that the common law prohibition against a body appointing one of its members to another position, see Wood v. Town of Whitehall, 120 Misc. 124 (Sup. Ct. Washington Co.), aff'd, 206 A.D. 786 (3d Dep't 1923), implicated in the proposed appointment of the council member to the position of financial operations manager, may be overcome by local law. Op. Att'y Gen. (Inf.) No. 87-47.