Request By:
Mr. Sheryl G. Snyder
Wyatt, Tarrant & Combs
Citizens Plaza
Louisville, Kentucky 40202
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Walter C. Herdman, Assistant Deputy Attorney General
This is in response to your letter of May 13, concerning a possible conflict of interest. You relate the following facts and question:
"Mr. Paul Borden is an unpaid council member of the City of Douglass Hills. He is also employed by the Kentucky Higher Education Assistance Authority as Executive Director. He serves at the pleasure of the Board and is not covered by the merit system. By virtue of his position as Executive Director of the Kentucky Higher Education Assistance Authority, he is also the Executive Director of the Kentucky Higher Education Student Loan Corporation. KRS 164A.050(7).
Our question is whether the office of council member of Douglass Hills is incompatible with Mr. Borden's employment as Executive Director of the Kentucky Higher Education Assistance Authority and Kentucky Higher Education Student Loan Corporation."
Our response to your question as to whether an incompatible situation exists under the related circumstances would be in the negative. Section 165 of the Constitution and KRS 61.080 prohibit a person holding a state office from holding at the same time a municipal office or employment. There is, of course, no question that a member of the city council is a municipal officer [KRS 83A.040], irrespective of whether or not he receives compensation, which is, incidentally, required to be fixed pursuant to KRS 83A.070. There is a question in our mind as to whether or not the Executive Director of the Kentucky Higher Education Assistance Authority who is also the Executive Director of the Kentucky Higher Education Student Loan Corporation, represents a state agency and thus is either an officer or employee of the state within the meaning of the incompatibility section of the Constitution and the statute menitioned above, in view of the nature of the two agencies, being independent corporate bodies, though in fact both are referred to as subdivisions of the state under the terms of KRS 164.742 and 164A.050. In other words, they may be hybrid public bodies not contemplated by the Constitution. See
City of Louisville v. Public Housing Adm., Ky., 261 S.W.2d 286 (1953).
Assuming, however, that they are state agencies and as a consequence their governing board members are state officers, the executive director selected by the Kentucky Higher Education Assistance Authority would not appear to qualify as a state officer within the meaning of the term as defined in numerous cases, and one mentioned by you, that of
Howard v. Saylor, 305 Ky. 504, 204 S.W.2d 815 (1947). This case defines, as you point out, five necessary elements indispensible for creating a public office, which are basically that: (1) It must be created by the Constitution or by the Legislature; (2) it must possess a delegation of sovereign power; (3) the powers and duties must be defined, directly or indirectly, by the Legisature or through legislative authority; (4) the duties must be performed generally independently though they may be under the general control of a superior officer; (5) it must have some permanency and continuity. In addition, the officer must take the official oath and must give an official bond, if required, by proper authority. One of the later cases defining the term "public office" is
Lasher v. Commonwealth, Ky., 418 S.W.2d 416 (1967) which cites numerous prior cases dealing with this subject. In addition, we might also refer you to the 1980 municipal code which defines the term "officer" under KRS 83A.010 in the same manner as the referred to cases, particularly the case of Howard v. Saylor.
The position of Executive Director of the Kentucky Higher Education Authority is not even mentioned in the act creating the Authority and is simply a position established by it pursuant to KRS 164.746(6) which simply gives the board the general authority to appoint such officers and employees as deemed necessary and fix their compensation and duties. Under this section we do not believe the board can create an office within the meaning of the term as defined in the referred to cases, even if its regulations establishing the position attempts to contain the elements of an office. In other words, we do not believe that the Legislature can delegate to the Authority power to create a state office as such and has not in fact attempted to do so in this instance. This being the case, the executive director must be considered a state employee within the meaning of Section 165 of the Constitution and KRS 61.080. The same would be true with respect to his serving as Executive Director to the Kentucky Higher Education Student Loan Corporation pursuant to KRS 164A.050(7). The duties of the director of the loan corporation set forth under subsection (8) merely reflect that the Legislature desires to be specific as to what he must do with respect to managing the affairs of the corporation, and certainly would not establish the director as an officer within the meaning of the case law cited.
We also might add that we do not believe the executive director of the student loan corporation could be considered a municipal employee. However, this would not create an incompatibility, as a person can hold a municipal office and municipal employment at the same time. We mention this simply because you referred to the possibility of the loan corporation being a municipality.
As a consequence, we believe that the individual in question is at the present time holding a municipal office and state employment, concerning which there is no constitutional or statutory objection.