ATTORNEY GENERAL OF TEXAS 

GREG ABBOTT 

June 30,2003 

The Honorable Scott Sherwood 

Carson County Attorney 

303 Euclid Avenue 

P.O. Box 947 

Panhandle, Texas 79068-0947 

Opinion No. GA-0084 

Re: City of Skellytown’s authority to enter 

certain agreements with the Skellytown 

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. 
The Honorable Scott Sherwood - Page 3 (GA-0084) 

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.” HOUSE COMM. ON URBAN AFFAIRS, BILL ANALYSIS, 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). 
The Honorable Scott Sherwood - Page 5 (GA-0084) 

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 selfappointment 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...) 
The Honorable Scott Sherwood - Page 6 (GA-0084) 

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 CODE ANN. 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. 
The Honorable Scott Sherwood - Page 7 (GA-0084) 

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. ON URBAN AFFAIRS, 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 the Attorney General 

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) 
The Honorable Scott Sherwood - Page 8 (GA-0084) 

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”). 
The Honorable Scott Sherwood - Page 9 (GA-0084) 

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’T CODE ANN. 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. 
The Honorable Scott Sherwood - Page 10 (GA-0084) 

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 

CODE ANN. 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). 
The Honorable Scott Sherwood - Page 11 (GA-0084) 

SUMMARY 

Because the City of Skellytown executed various agreements 

(the “Agreements”) with the Skellytown Area Volunteer FirefightersEMS 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’T CODE ANN. 

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