Does a West Virginia county commission have to pay back the legal fees of a Public Service District board member who successfully defended an ethics complaint, and does it matter that the county dissolved the PSD before the request was decided?

Plain-English summary

In 2016, several ethics complaints were filed against a member of the Jefferson County Public Service District board. The board member hired counsel, defeated the complaints, and asked the Jefferson County Commission to reimburse his legal fees. While the request was pending, the Commission voted to dissolve the PSD and transfer its properties and services to the City of Charles Town. The board member's fee request was still unresolved when the Jefferson County Prosecuting Attorney asked the Attorney General two questions: did the Commission have to pay, and did dissolving the PSD change the answer?

Attorney General Patrick Morrisey said no on both counts.

The framework comes from Powers v. Goodwin, 170 W. Va. 151 (1982), which set out a three-part test for whether a public official is entitled to legal fee reimbursement: (1) the underlying matter arose from official duty in which the government has an interest; (2) the official acted in good faith; and (3) "the agency seeking to indemnify the officer must have either the express or implied power to do so." A 2017 AG opinion answering an earlier Jefferson County request had already worked through this test. The 2019 opinion focused on prong three.

The key precedent on prong three is State ex rel. Warner v. Jefferson County Commission, 198 W. Va. 667 (1996). Warner held that a county commission was obligated to reimburse a solid waste authority member's legal fees, but only because of a statute requiring the Commission to fund the authority's general operating expenses. The Court called this a "fiscal tether" and a "symbiosis" between the two entities. The same logic explained why a 2017 opinion concluded that commissions could reimburse county planning commission members: W. Va. Code § 8A-2-10 explicitly tells commissions to provide planning commissions with "[a]ppropriate money to defray the[ir] reasonable expenses."

PSDs are different. The opinion walked through the statutory framework and showed there is no fiscal tether:

• PSD obligations are "payable solely and only out of revenues derived" by the district itself, and enforceable only by suit against the district. W. Va. Code §§ 16-13A-7, 17.
• PSD boards must inform commissions of their budget and spending decisions, but commissions have no control over those decisions. §§ 16-13A-3, 7, 10, 11, 12.
• The PSD statute itself authorizes a PSD to pay its own members' attorney's fees in removal proceedings (§ 16-13A-3a) and to reimburse "all reasonable and necessary expenses actually incurred in the performance of their duties as provided by the rules of the board" (§ 16-13A-4(d)). The Legislature placed reimbursement authority on the PSD, not on the county.

The opinion acknowledged one connection: county commissions appoint some PSD board members under § 16-13A-3, and Warner mentioned the appointment power for solid waste authorities too. But the Warner court emphasized that it was "[b]ecause of [its] financial responsibility" that the Commission had implied power to pay legal fees, and the 2019 opinion read that as making the financial link essential. Appointment authority alone, untethered to funding, was insufficient.

On dissolution, the opinion concluded that nothing in the statutes governing PSD dissolution shifts a PSD's debts or obligations to the county commission. W. Va. Code § 16-13A-2(g) actually points the other way: it forbids PSDs from impairing or usurping county commission powers. The Public Service Commission, not the county commission, holds central authority over PSD dissolution under § 16-13A-2(a). And the Article X prohibition on public indebtedness, with its narrow exceptions for special revenue bonds (Winkler) and service fees (United States v. City of Charleston), reinforces that subdivisions do not casually inherit each other's debts. Section 16-13A-13 ties any continuing PSD obligations to the "public service properties under control of the district," which here had been transferred to the City of Charles Town, not to Jefferson County.

The opinion explicitly avoided one fact-specific question: the board member had not paid the legal fees out of pocket but through what amounted to a loan from his own company. Because the Commission had no duty to reimburse anyway, the AG declined to reach whether the company-as-payor wrinkle would have separately disqualified the request.

Currency note

This opinion was issued in 2019. 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

Q: Could the PSD itself have reimbursed the board member, even if the county couldn't?
A: The opinion repeatedly noted that the PSD has its own express and implied authority to reimburse its members' expenses. W. Va. Code § 16-13A-3a contemplates attorney's fees in removal proceedings, and § 16-13A-4(d) authorizes reimbursement of "reasonable and necessary expenses" under the board's own rules. The opinion did not analyze whether the ethics defense fits that statutory frame, but the statutory hook for a PSD to pay its own members exists.

Q: What about Powers v. Goodwin's good-faith and official-duty prongs?
A: The opinion sidestepped them, citing the earlier 2017 AG opinion (2017 WL 1377946) that called those prongs "heavily fact-specific and thus beyond the scope of an Opinion request." Both opinions assumed those prongs would likely be satisfied on facts like these and focused entirely on prong three (express or implied agency power). A reviewing court would still need to make those factual findings.

Q: Does it matter that the county commission appoints PSD members?
A: The opinion treats appointment authority as a connection but not enough on its own. Warner relied on the appointment connection plus the funding obligation. Without funding, Warner reads as foreclosing the implied-power argument: the court "equat[ed] [the] Commission's 'duty and responsibility' under governing statutes with 'implied power' under Powers." No funding duty, no implied power.

Q: What if the county commission had voluntarily decided to fund the PSD's general expenses for some period?
A: The opinion did not address voluntary funding patterns. The legal hook in Warner is a statutory funding obligation, not a course of dealing. Reading the opinion strictly, even years of voluntary support would not by itself create a Warner-style "fiscal tether," because the analysis turns on what the Legislature compelled the commission to do. A separately-funded relationship might still come up in a different posture (for example, if the county commission expressly assumed obligations as part of dissolution), and the opinion left those scenarios open.

Q: After dissolution, who pays the PSD's outstanding debts?
A: The opinion's framework points to whoever takes the "public service properties under control of the district" under W. Va. Code § 16-13A-13. In Jefferson County, that was the City of Charles Town. The opinion did not analyze the City's specific obligations, only that the Commission did not automatically inherit them. If the dissolution agreement had transferred properties to the County, the analysis might differ, but the request did not present those facts.

Q: Could the Public Service Commission have ordered the county commission to pay?
A: Probably not directly. The opinion notes that the PSC has at least as much authority as a county commission over PSD dissolution under § 16-13A-2(a). PSC orders typically run against the regulated utility, not against an unrelated county fisc. Allocation of dissolution obligations is a question of the dissolution proceeding itself, which the AG opinion did not analyze.

Background and statutory framework

The Powers test. Powers v. Goodwin, 170 W. Va. 151 (1982), supplies the controlling test for legal fee reimbursement of public officials in West Virginia:

1. The underlying matter "must arise from the discharge of an official duty in which the government has an interest";
2. The officer "must have acted in good faith"; and
3. "[T]he agency seeking to indemnify the officer must have either the express or implied power to do so."

This opinion focused on prong three, treating prongs one and two as fact-bound and beyond opinion-letter scope.

Implied county commission power. W. Va. Code § 7-1-3 gives county commissions authority over "the superintendence and administration" of their own "internal police and fiscal affairs." The Court in Powers read that as "granting implied powers reasonably necessary to carry out [their] express responsibilities" (citing State ex rel. County Court v. Arthur, 150 W. Va. 293 (1965), and Mohn v. County Court of Cabell County, 145 W. Va. 377 (1960)). The 2017 AG opinion confirmed that those implied powers can include paying legal fees for some subordinate bodies.

The Warner fiscal-tether test. State ex rel. Warner v. Jefferson County Commission, 198 W. Va. 667 (1996), extended that reasoning to a Solid Waste Authority member's legal fees. The decisive fact was a statute requiring the Commission to fund the authority's general operating expenses: "The expenses of any county solid waste authority . . . shall be paid by the county commission from the general funds in the county treasury to the extent that such expenses are not paid by fees, grants and funds received by the authority from other sources." W. Va. Code § 22C-4-7(b) (1994). That created the "symbiosis" and "fiscal tether" the Court found dispositive.

For comparison, county planning commissions also have a fiscal tether: W. Va. Code § 8A-2-10 says the county commission "shall provide the planning commission with . . . [a]ppropriate money to defray the reasonable expenses of the planning commission."

The PSD framework. PSDs are organized under W. Va. Code Chapter 16, Article 13A. PSD obligations are "payable solely and only out of revenues derived" by the district (§ 16-13A-7) and enforceable only against the district (§ 16-13A-17). PSD boards report budgets to county commissions but operate financially independently (§§ 16-13A-3, 7, 10-12). Reimbursement authority for PSD board members' expenses sits with the PSD itself (§§ 16-13A-3a, 4(d)). County commissions appoint some PSD board members (§ 16-13A-3) but cannot direct PSD finances.

Dissolution. W. Va. Code § 16-13A-2(a) requires PSC approval for dissolution. § 16-13A-2(g) prohibits PSDs from "enter[ing] into any agreement, contract or covenant that infringes upon, impairs, abridges or usurps the duties, rights or powers of the county commission." The PSC's dissolution rules are at W. Va. Code St. R. § 150-7-8. Berkeley County Public Service Sewer District v. W. Va. PSC, 204 W. Va. 279 (1998), holds that § 16-13A-2 cannot be read to create unstated powers by implication.

The constitutional Article X prohibition on public indebtedness reinforces the analysis. Special revenue bonds (Winkler v. State Sch. Bldg. Auth., 189 W. Va. 748 (1993)) and service fees (United States v. City of Charleston, 149 F. Supp. 866 (S.D. W. Va. 1957)) are exceptions. § 16-13A-13 ties continuing obligations to the entity holding the "public service properties under control of the district."

Citations and references

Statutes and rules:
- W. Va. Code § 5-3-2 (AG advisory authority)
- W. Va. Code § 7-1-3 (county commission authority over fiscal affairs)
- W. Va. Code § 16-13A-2 (PSD organization and dissolution)
- W. Va. Code § 16-13A-3 (PSD board appointment)
- W. Va. Code § 16-13A-3a (PSD board removal; attorney's fees)
- W. Va. Code § 16-13A-4(d) (PSD reimbursement of expenses)
- W. Va. Code § 16-13A-7 (PSD obligations payable from district revenues)
- W. Va. Code §§ 16-13A-10, 11, 12 (PSD budgeting and reporting)
- W. Va. Code § 16-13A-13 (public service properties)
- W. Va. Code § 16-13A-17 (suits against PSD)
- W. Va. Code § 22C-4-3 (1994) (solid waste authority appointments)
- W. Va. Code § 22C-4-7(b) (1994) (county commission funds SWA)
- W. Va. Code § 8A-2-10 (county commission funds planning commission)
- W. Va. Code St. R. § 150-7-8 (PSC PSD dissolution rule)

Cases:
- Powers v. Goodwin, 170 W. Va. 151 (1982)
- State ex rel. Warner v. Jefferson County Commission, 198 W. Va. 667 (1996)
- State ex rel. County Court v. Arthur, 150 W. Va. 293 (1965)
- Mohn v. County Court of Cabell County, 145 W. Va. 377 (1960)
- Berkeley Cty. Pub. Serv. Sewer Dist. v. W. Va. Pub. Serv. Comm'n, 204 W. Va. 279 (1998)
- Winkler v. State Sch. Bldg. Auth., 189 W. Va. 748 (1993)
- United States v. City of Charleston, 149 F. Supp. 866 (S.D. W. Va. 1957)
- W. Va. Op. Att'y Gen., 2017 WL 1377946 (Apr. 5, 2017)

Source

• Landing page: https://ago.wv.gov/media/17751/download?inline
• Original PDF: https://ago.wv.gov/media/17751/download?inline

Original opinion text

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

State of West Virginia
Office of the Attorney General

Patrick Morrisey
(304) 558-2021
Attorney General
Fax (304) 558-0140

October 24, 2019

The Honorable Matthew L. Harvey
Jefferson County Prosecuting Attorney
120 South George Street
Charles Town, WV 25414

Dear Matt:

You have asked for an Opinion of the Attorney General regarding reimbursements for the legal fees of Public Service District ("PSD") board members. This Opinion is being issued pursuant to West Virginia Code Section 5-3-2, which provides that the Attorney General "may consult with and advise the several prosecuting attorneys in matters relating to the official duties of their office." To the extent this Opinion relies on facts, it is based solely on the factual assertions in your correspondence with the Office of the Attorney General.

In your letter, you explain that several complaints were filed in 2016 with the West Virginia Ethics Commission against one of the Jefferson County PSD's board members. The board member hired counsel and successfully defended against these complaints, then asked the Jefferson County Commission ("Commission") to reimburse his legal expenses. Meanwhile, the Commission voted to dissolve the PSD, and the PSD's properties and services have been transferred to the City of Charles Town. The board member's reimbursement request remains pending.

Your letter raises the following legal questions:

First, does a county commission have a duty to reimburse a member of a PSD board for legal fees incurred in the successful defense of an ethics complaint?

Second, does a county commission's decision to dissolve a PSD affect the commission's power or obligation to issue such reimbursements?

We conclude that a county commission does not have express statutory duty to reimburse the legal fees for a PSD board member, and that the relationship between a county commission and a PSD is too attenuated to infer an implicit duty, either. Further, this answer does not change when a PSD is dissolved, at least without facts that are not present here relating to the assumption of the dissolved entity's debts or obligations. Finally, we note that your letter also asks about the propriety of reimbursing the board member where he did not pay the legal fees directly, but rather had his company pay them on his behalf in the form of a loan. As we conclude that the Commission does not have a duty to issue a reimbursement in this case, this Opinion does not address whether the company's involvement makes the board member ineligible for reimbursement.

Discussion

Question 1: Authority To Reimburse A PSD Board Member's Legal Fees

The West Virginia Supreme Court of Appeals has set forth a three-part test to determine whether a public official is entitled to reimbursement for legal fees:

[1] [T]he underlying action must arise from the discharge of an official duty in which the government has an interest; [2] the officer must have acted in good faith; and [3] the agency seeking to indemnify the officer must have either the express or implied power to do so.

Powers v. Goodwin, 170 W. Va. 151, 157, 291 S.E.2d 466, 472 (1982). In a previous Opinion requested by your office, we explained that the first two factors are heavily fact-specific and thus beyond the scope of an Opinion request, yet would likely be satisfied in circumstances similar to these. W. Va. Op. Att'y Gen., 2017 WL 1377946, at *4 (Apr. 5, 2017). Accordingly, this response focuses on the third question: whether the reimbursing agency, here, the Commission, has authority to issue reimbursements. We conclude that a county commission does not have express or implied power to reimburse the expenses of PSD boards or their members, including legal fees.

No statute expressly authorizes a county commission to reimburse the legal fees of a PSD board member. Powers, however, establishes that reimbursement authority can be "express or implied." 170 W. Va. at 157, 291 S.E.2d at 472. And West Virginia Code Section 7-1-3 provides that county commissions have authority over "the superintendence and administration" of their own "internal police and fiscal affairs," which the Court has read as "granting implied powers reasonably necessary to carry out [their] express responsibilities." Id. at n.3 (citing State ex rel. County Court v. Arthur, 150 W. Va. 293, 145 S.E.2d 34 (1965); Mohn v. County Court of Cabell County, 145 W. Va. 377, 115 S.E.2d 806 (1960)). As we explained in our previous letter, these principles indicate that a county commission's "implied powers" include authority to reimburse legal fees for members of some subordinate bodies. See 2017 WL 1377946, at *1.

The test to resolve whether a commission's reimbursement power extends to a specific county entity, here, the PSD, comes from State ex rel. Warner v. Jefferson County Commission, 198 W. Va. 667, 482 S.E.2d 652 (1996). In Warner, the Court considered whether the Commission was obligated to reimburse the legal fees of a member of a solid waste authority. Id. at 670, 482 S.E.2d at 655. The Court analyzed the third Powers factor by asking whether the Commission had a "clear legal duty" to pay legal expenses for members of the authority. Id. at 672, 482 S.E.2d at 657. It did: This duty arose from the "symbiosis" between the Commission and the solid waste authority, as evident by the express statutory requirement for the Commission to fund the authority's general operating expenses. Id. at 672-73 n.11, 482 S.E.2d at 657-58 n.11 ("The expenses of any county solid waste authority . . . shall be paid by the county commission from the general funds in the county treasury to the extent that such expenses are not paid by fees, grants and funds received by the authority from other sources." (quoting W. Va. Code § 22C-4-7(b) (1994))). This obligation to support the authority's "general administrative expenses" created a "fiscal tether" between the two entities, and this "financial responsibility" in turn included power to pay "reasonable legal fees and expenses." Id. at 672-73, 482 S.E.2d at 657-58 (quoting W. Va. Code § 22C-4-7(b) (1994)).

For comparison, our previous Opinion explained that county commissions may reimburse legal fees for members of county planning commissions. See 2017 WL 1377946, at *1. This conclusion tracks Warner's reasoning. As with solid waste authorities, county commissions have a strong and direct financial connection to their planning commissions: "The county commission in the case of a county planning commission . . . shall provide the planning commission with . . . [a]ppropriate money to defray the reasonable expenses of the planning commission." W. Va. Code § 8A-2-10 (emphasis added).

The relationship between county commissions and PSDs is different. Critically, there is no "fiscal tether" between PSDs and county commissions. The obligations of a PSD are "payable solely and only out of revenues derived" by the district itself, and enforceable only by a suit against the district. W. Va. Code §§ 16-13A-7, 17. Although PSD boards must inform commissions of their budget and spending decisions, commissions do not have any control over these decisions. Id. §§ 16-13A-3, 7, 10-12. Moreover, PSDs have both express and implicit authority to reimburse their own members under the Powers framework: The West Virginia Code authorizes attorney's fees reimbursements for PSD board members in the context of removal proceedings, W. Va. Code § 16-13A-3a, and allows reimbursements for "all reasonable and necessary expenses actually incurred in the performance of their duties as provided by the rules of the board," id. § 16-13A-4(d). This statutory framework underscores that PSDs and county commissions are financially distinct. Absent the fiscal "symbiosis" that existed in Warner, it is unlikely a court would conclude that the Commission has a duty to issue reimbursements to PSD board members.

On the other hand, we recognize that there is a connection between these entities to the extent that county commissions appoint some members of a PSD board, W. Va. Code § 16-13A-3, which was also an element of the Court's analysis in Warner. 192 W. Va. at 673, 482 S.E.2d at 658 (citing W. Va. Code § 22C-4-3 (1994)). But it does not appear from Warner that this fact, standing alone, would be dispositive. The Court emphasized that it was "[b]ecause of [its] financial responsibility" that "the County Commission has, at the very least, the implied power to pay [a solid waste authority member's] reasonable legal fees and expenses." Id. The Court's focus on the monetary aspect of the entities' relationship indicates that a financial link is essential to finding a duty to issue reimbursements for legal expenses. And given that Powers requires an identifiable source of express or implied power to issue reimbursements, lack of a legal duty to act is likely tantamount to lack of legal authority as well. See Warner, 198 W. Va. at 673, 482 S.E.2d at 658 (equating Commission's "duty and responsibility" under governing statutes with "implied power" under Powers).

Question 2: Consequences Of Dissolving A PSD

Your letter also asks whether the fact that the Commission voted to dissolve the PSD alters its legal duties or powers in this context. We conclude that none of the statutes governing the dissolution of PSDs alter the financial relationship between a PSD and a county commission. Accordingly, dissolution of a PSD does not, without more, change the result under the third Powers factor.

The dissolution of a PSD does not vest a county commission with new "financial responsibility," Warner, 192 W. Va. at 673, 482 S.E.2d at 658, for the district. The statutes governing dissolution do not create a duty for county commissions to assume the debts or obligations of a PSD. See W. Va. Code § 16-13A-2; W. Va. Code St. R. § 150-7-8. Indeed, the duties of county commissions are addressed in only one provision, and that provision prohibits PSDs from "enter[ing] into any agreement, contract or covenant that infringes upon, impairs, abridges or usurps the duties, rights or powers of the county commission." W. Va. Code § 16-13A-2(g). The West Virginia Supreme Court of Appeals has also held that the provisions of Section 16-13A-2 governing PSDs may not be construed to create unstated powers by implication. Berkeley Cty. Pub. Serv. Sewer Dist. v. W. Va. Pub. Serv. Comm'n, 204 W. Va. 279, 284-86, 512 S.E.2d 201, 206-08 (1998) (rejecting the argument that the power of county commissions to establish "territorial boundaries" of a PSD implicitly grants the power to define the service area as exclusive). As a result, because the Code does not expressly transfer obligations from a dissolved PSD to a county commission, it is unlikely a court would infer this burden.

The limited relationship between county commissions and PSDs thus makes it unclear whether a county commission could dissolve a PSD in a way that would transfer responsibility for the PSD's obligations to the county. Regardless, your request does not refer to any such transfer between the former PSD and Jefferson County. Accordingly, we conclude that the Commission did not automatically assume responsibility to reimburse the legal fees of members of the dissolved PSD's board.

The fact that the Commission voted to dissolve the PSD does not alter this analysis. We are aware of no statutory authority or legal doctrine mandating a political subdivision to assume the obligations of an entity it acts to dissolve. Nor is it clear why such a doctrine would apply against the Commission, as the Public Service Commission has as much authority as county commissions, if not more, over the dissolution of PSDs. See W. Va. Code § 16-13a-2(a) (requiring that "no new public service district shall be . . . dissolved . . . without the written consent and approval of the Public Service Commission"). Such a doctrine would also cut against the general rule that subdivisions are prohibited from incurring debt obligations, with the exception of those funded by special revenue bonds or service fees. See, e.g., Winkler v. State Sch. Bldg. Auth., 189 W. Va. 748, 760, 434 S.E.2d 420, 432 (1993) (holding that obligations funded by special revenue bonds are not "debts" within the general Article X prohibition on public indebtedness); United States v. City of Charleston, 149 F. Supp. 866, 872 (S.D. W. Va. 1957) (same, with respect to obligations funded by service fees). Insofar as the now-dissolved PSD had any obligations that could be funded by bond revenue or service fees, the duty to fund them would follow the "public service properties under control of the district." W. Va. Code § 16-13A-13. Your letter indicates that these properties have been transferred to the City of Charles Town, not to Jefferson County.

In sum, the limited relationship between a county commission and a PSD does not change upon dissolution of a PSD, at least without any additional circumstances surrounding the dissolution not specified here. We thus conclude that dissolution of the Jefferson County PSD did not vest the Commission with new power or legal obligation to reimburse PSD board members for legal fees.

Sincerely,

Patrick Morrisey
Attorney General

Lindsay See
Solicitor General

Thomas Lampman
Assistant Solicitor General