Board Member Conflicts of Interest and Impartiality
Many of the persons serving on boards making land use regulatory decisions are directly involved in development issues. Since the early days of zoning, it has been common for developers, builders, real estate agents, surveyors, engineers, architects, and lawyers to be disproportionately represented on boards making legislative and quasi-judicial land use decisions. More recently neighborhood activists, conservationists, and others have joined these boards.
Board Member Conflicts of Interest and Impartiality in Zoning Decisions
David W. Owens
Gladys Hall Coates Professor of Public Law and Government
School of Government, The University of North Carolina at Chapel Hill
© 2014
April 2014
Many of the persons serving on boards making land use regulatory decisions are directly involved in development issues. Since the early days of zoning, it has been common for developers, builders, real estate agents, surveyors, engineers, architects, and lawyers to be disproportionately represented on boards making legislative and quasi-judicial land use decisions. More recently neighborhood activists, conservationists, and others have joined these boards. Given the strong impact development regulations have on their interests, it is hardly surprising that those most directly affected by the decisions actively seek out membership on these boards. They bring expertise and well-informed perspectives to the crafting and implementation of development regulation. But the participation in decision making by so many persons who may be personally affected by the decisions presents the need for safeguards to assure that these decisions are being made in the public interest, not the personal financial interests of board members.
Persons making land use regulatory decisions have an obligation to act in the public interest. Both constitutional and statutory provisions address the question of when a conflict exists between a decision maker’s personal interests and public obligations.
In County of Lancaster v. Mecklenburg County, the North Carolina Supreme Court summarized the limitations on self-interest in land use regulatory decisions:
Due process requires an impartial decision-maker. With legislative zoning decisions, an elected official with a direct and substantial financial interest in a zoning decision may not participate in making that decision. Where there is a specific, substantial, and readily identifiable financial impact on a member, nonparticipation is required. Additional considerations beyond these financial interests require nonparticipation in quasi-judicial zoning decisions. A fixed opinion that is not susceptible to change may well constitute impermissible bias, as will undisclosed ex parte communication or a close familial or business relationship with an applicant.[1]
Legislative Decisions
Legislative decisions require policy judgments. Board members' personal knowledge, positions on issues of importance to the community, and judgment about the preferred course for the community are important and valid components of the decision-making process.
As a general rule, the individual or personal motives of governing board members are not examined in the judicial review of legislative decisions.[2] Expression of opinions, bias, and contacts with citizens about a matter before a hearing or a vote does not disqualify a member from voting on a legislative decision.[3] If the voters disagree with the judgment being exercised, the appropriate remedy is the ballot box. However, the judgment being exercised must be on behalf of the public interest, not the narrow self-interest of an individual board member.[4]
State statutes specifically speak to the issue of financial conflicts in legislative decisions. In 2005 the zoning statutes were amended to specifically address conflicts of interest in both legislative and quasi-judicial settings.
G.S. 160A-381(d) and 153A-340(g) codify the standard set out in County of Lancaster. The statutes provide that members of city councils and county boards of commissioners “shall not vote on any zoning map or text amendment where the outcome of the matter being considered is reasonably likely to have a direct, substantial, and readily identifiable financial impact on the member.” The statutes also apply to same prohibition to advisory boards making recommendations on zoning amendments. G.S. 153A-44 and 160A-75, which address voting on legislative matters by county commissioners and city council members, respectively, also incorporate the statutes noted above as grounds for members’ abstentions.[5]
The General Assembly in 2009 mandated adoption of local codes of ethics. G.S. 160A-83 requires the governing boards of cities and counties to adopt a code of ethics, and G.S. 160A-84 requires these boards to receive two hours of ethics training within a year of being elected or reelected. Some city and county codes also have ethics provisions regarding the disclosure of financial interests in matters coming before elected officials as well as requirements for nonparticipation in such matters. Some of the local code provisions apply to advisory boards as well as to elected officials.
The matter of financial interests occasionally poses difficult questions in land development regulatory policy decisions.[6] Although board members should certainly not participate in voting on a small-scale rezoning of their own property, they must participate in adopting initial zoning for the entire jurisdiction, which affects their property. The difficult question is at what point the financial interest become significant enough to warrant nonparticipation. The general rule is that if a member is affected no more significantly than all other members of the community, nonparticipation is not required. However, if there is a specific, substantial, and readily identifiable financial impact on a member, nonparticipation is required even if there are others who are similarly affected.
Quasi-Judicial Decisions
An impartial decision maker is required for quasi-judicial decisions.
With quasi-judicial land use decisions the constitutional demand for impartiality extends beyond financial conflicts to include bias (an opinion on the case that is fixed and not susceptible to change),[7] close family or associational relationships, and undisclosed ex parte communications.
G.S. 160A-388(e1) and 153A-345(e1) codify County of Lancaster’s heightened standard for quasi-judicial decisions, providing that members of boards making quasi-judicial land use decisions shall not participate in or vote on any quasi-judicial matter in a manner that would violate affected persons’ constitutional rights to an impartial decision-maker. The statute provides that Impermissible conflicts include, but are not limited to, a member having a fixed opinion prior to hearing the matter that is not susceptible to change, undisclosed ex parte communications, a close familial, business, or other associational relationship with an affected party, or a financial interest in the outcome of the matter.
A variety of cases have addressed these issues in the context of quasi-judicial decisions:
- It is not impermissible bias for board members to announce they intend to vote against a permit after the evidence has been presented in the hearing but before a vote is called and there is no evidence that these members had a fixed decision prior to the hearing.[8]
- Due process is not violated by the fact that city council members making a quasi-judicial decision on a special use permit for an amphitheater had previously participated in planning for this municipal venture and were generally enthusiastic about the project, as there was no evidence of impermissible bias (i.e., a fixed opinion that was not susceptible to change before the hearing).[9]
- The fact that a former planning department staff member sits on the board of adjustment is not in and of itself a conflict if no evidence shows that the applicant was prejudiced by that member’s participation.[10]
- The fact that a board member has a distant family relationship with a party is not per se a conflict. Where the applicant for a special use permit application was married to the aunt of a board member, the court held that the burden is on the party claiming bias to show some bias by the member or that the member stands to receive some benefit from the vote.[11]
- If a permit could not lawfully be issued due to noncompliance with an objective standard in the ordinance, the potential bias of a board member is irrelevant, as it could not have affected the outcome of the decision.[12]
As a general rule, a member with a bias or conflict of interest makes that determination and recuses him or herself. If the board making the decision is the governing board, the member generally requests that the entire board vote to approve the recusal.[13] For planning boards and boards of adjustment, the member may simply announce the recusal at the initiation of the matter.
A person contending a board member has a conflict of interest or an impermissible bias may move for recusal of that member. The objecting party has the burden of demonstrating that grounds for disqualification actually exist.[14] If a member does not initiate recusal and an objection to participation is raised, the remaining members rule on participation by majority vote.[15] If a party to the hearing believes there is a potential for inappropriate participation, it is permissible for the party to query the board for potential bias,[16] and any objection to participation should be raised at the time of the hearing rather than initially on appeal.[17] G.S. 160A-393(h)(2) does allow the hearing record on appeal to be supplemented with affidavits, testimony, or documentary evidence regarding potential impermissible conflicts of interest.
Given the requirement that members with a conflict not participate, the statutes make express provision for alternate members for boards of adjustment.[18] Alternate members may also serve in the absence of a member or to fill a vacancy on the board pending appointment of a replacement member. An alternate member has the same powers and rights as a regular member when actively serving at a meeting. If an alternate member is present at a quasi-judicial hearing but not serving in place of a regular member, the alternate member should simply observe rather than actively participate in the hearing or discussion of the case.
Staff Members
While the focus of conflict of interest consideration is on the decision makers, conflicts by staff members advising the decision makers can occasionally be problematic, especially for attorneys advising a board making land use decisions. Surveys of North Carolina jurisdictions indicate it is very common for the city or county attorney to provide legal advice to the boards making special and conditional use permit decisions and variance decisions. In both of these types of quasi-judicial matters, some 90 percent of the jurisdictions reported that the jurisdiction’s attorney provided legal representation for the decision-making board.[19] When this arrangement is used, the jurisdiction’s counsel must take care to avoid playing an active role assisting staff or advocating before the board while also providing legal advice to the board.
Also see these blog posts in Coates Canons:
David Owens, When Can a Biased Official Participate in a Zoning Decision? (Sept. 2012)
Frayda Bluestein, Board Member Financial Interest: Mappin the Points on the Continuum (Jan. 2012)
Frayda Bluestein, Excusing Board Members from Voting (Sept. 2009)
For additional legal analysis, see:
David W. Owens, Land Use Law in North Carolina (2ed. 2011)
[1] 334 N.C. 496, 511, 434 S.E.2d 604, 614 (1993).
[2] Barger v. Smith, 156 N.C. 323, 72 S.E. 376 (1911).
[3] Brown v. Town of Davidson, 113 N.C. App. 553, 556, 439 S.E.2d 206, 208 (1994); Bd. of Adjustment v. Town of Swansboro, 108 N.C. App. 198, 206, 423 S.E.2d 498, 503, aff’d, 334 N.C. 421, 432 S.E.2d 310 (1993).
[4] In Kendall v. Stafford, 178 N.C. 461, 101 S.E. 15 (1919), a case in which city council members voted on a pay raise for themselves, the court held:
The public policy of the State, found in the statutes and judicial decisions, has been pronounced against permitting one to sit in judgment on his own case, or to act on a matter affecting the public when he has a direct pecuniary interest, and this is a principle of the common law which has existed for hundreds of years.
Id. at 464, 101 S.E. at 16.
[5] The municipal statute goes on to provide that the failure to vote by any member who is physically present or who has withdrawn without being excused is counted as an affirmative vote. This provision would not be applicable if the nonparticipation in the vote is mandated by statute.
[6] A 2008 School of Government survey explored the question of how often financial conflicts of interest arise in legislative zoning decisions. Responding jurisdictions reported that this is an infrequent occurrence for both the planning board and governing board. Three-quarters of the responding jurisdictions reported that a member of the planning board is never or only rarely excused from voting or abstains for a financial conflict of interest, with a quarter of the respondents indicating this only happens occasionally. Only two percent of the responding jurisdictions reported that this happens frequently or more often. Financial conflicts are reported to arise even less frequently for governing board members: 81 percent of the jurisdictions surveyed report that a city council or county board member either never or only rarely has to be excused from voting on a zoning amendment matter due to a financial conflict, and 17 percent reported that this happens only occasionally. Only 2 percent of the responding jurisdictions reported that this happens frequently or more often. David W. Owens, Zoning Amendments in North Carolina 17 (School of Government, Special Series No. 24, 2008).
[7] Crump v. Bd. of Educ., 326 N.C. 603, 392 S.E.2d 579 (1990).
[8] Vulcan Materials Co. v. Guilford County Bd. of Comm’rs, 115 N.C. App. 319, 444 S.E.2d 639, review denied, 337 N.C. 807, 449 S.E.2d 758 (1994).
[9].In re Application of City of Raleigh Parks & Recreation Dep’t, 107 N.C. App. 505, 421 S.E.2d 179 (1992).
[10] JWL Invs., Inc. v. Guilford County Bd. of Adjustment, 133 N.C. App. 426, 515 S.E.2d 715 (1999), review denied, 251 N.C. 357 (2000).
[11] Cox v. Hancock, 160 N.C. App. 473, 586 S.E.2d 500 (2003).
[12] Rice Assocs. of S. Highlands, Inc. v. Town of Weaverville Zoning Bd. of Adjustment, 108 N.C. App. 346, 423 S.E.2d 519 (1992).
[13] G.S. 153A-44 and 160A-75, which address voting on legislative matters by county commissioners and city council members, respectively, provide that “No member shall be excused from voting except upon matters involving the consideration of his own financial interest or official conduct or on matters on which the member is prohibited from voting under G.S. 14-234, 160A-381(d), or 160A-388(e1).” The county version has a comparable cross-reference to the land use conflict of interest standards for legislative and quasi-judicial decisions.
[14] In re Exzzell, 113 N.C. App. 388, 394, 438 S.E.2d 482, 485 (1994). If no objection is made at the hearing and there is no showing of prejudice as a result of improper participation, appellate courts will not set aside the decision. JWL Invs., Inc. v. Guilford County Bd. of Adjustment, 133 N.C. App. 426, 515 S.E.2d 715, review denied, 251 N.C. 715, 540 S.E.2d 349 (2000) (upholding participation in a hearing contesting a notice of violation of a board member who was a former staff member in the county planning department and who had been consulted in that capacity about a rezoning of the property in question).
[15] G.S. 153A-345(e1) and 160A-388(e1).
[16] While a process similar to voir dire for prospective jurors is usually not available for review of board members making a quasi-judicial decision, a general inquiry of board members regarding ex parte communications and bias is appropriate. A party can make this inquiry. In some jurisdictions the chair routinely makes such an inquiry as a standard procedure at the opening of each case.
[17] In JWL Investments, Inc. v. Guilford County Board of Adjustment, 133 N.C. App. 426, 515 S.E.2d 715 (1999), review denied, 251 N.C. 357 (2000), the court rejected a claim of improper participation where no objection was made at the hearing.
[18] G.S. 153A-345(a); 160A-388(a).
[19] David W. Owens, Special Use Permits in North Carolina Zoning 10 (School of Government, Special Series No. 22, 2007); David W. Owens & Adam Brueggemann, A Survey of Experience with Zoning Variances 13 (School of Government, Special Series No. 18, 2004). Jurisdictions with large populations and a substantial case load were more likely to provide outside counsel for these boards making quasi-judicial decisions.