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AGO Opinion 97011

Interlocal Cooperation Act; Membership and Authority of Joint Legal Entities
Opinion 97011




DATE: February 14, 1997




SUBJECT: Interlocal Cooperation Act; Membership and Authority of Joint Legal Entities




REQUESTED BY: John Breslow, Auditor of Public Accounts




WRITTEN BY: Don Stenberg, Attorney General

Fredrick F. Neid, Assistant Attorney General




You have requested the opinion of the Attorney General

regarding membership and authority of legal entities created under

the provisions of the Interlocal Cooperation Act, Neb. Rev. Stat.

§§ 13-801 to 13-827 (1991 and Cum. Supp. 1996) ("Act").




It is briefly related that a joint legal entity, the Custer

County Development Board ("Board"), was recently formed under the

Act and that "members" of the Board at various times have included

both a "for profit" group and a "non-profit" group as an "at-large"

member. Reportedly, the Board is the recipient of a grant from the

Nebraska Department of Economic Development "to set up 11 community

councils in Custer County." You further relate that Custer County

is not a "member of CCDB as of the date of this grant" and that

only five municipalities were members at the time of the grant

application, in April of 1996. It is in the context of these facts

that we respond to your questions.




It is FIRST inquired:




[M]ay a joint entity created in accordance with

Nebraska R.R.S. Section 13-804 have "members" who are not

"public agency's" as defined by Nebraska R.R.S. Section

13-803?




Yes. We believe a legal entity formed under the Act may have

members that are not public agencies as that term is defined for

purposes of the Act. Neb. Rev. Stat. § 13-804 (Cum. Supp. 1996)

authorizes any two or more public agencies to enter into agreements

with one another pursuant to the Act. The term, "public agency",

is defined in Neb. Rev. Stat. § 13-803(2) (Cum. Supp. 1996) to mean

any county, city, village, school district, or agency of state

government or of the United States, any drainage district, sanitary

and improvement district, or other municipal corporation, or

political subdivision of this state and any political subdivision

of another state. The express language of section 13-803 does not

include private entities or groups with the definition of the term,

public agency.




Under the maxim, expressio unius est exclusio alterius, a

statute which enumerates the things on which it is to operate

excludes all those not expressly mentioned. State v. Wragge, 246

Neb. 864, 524 N.W.2d 54 (1994); Curry v. State ex rel. Stenberg,

242 Neb. 695, 496 N.W.2d 512 (1993). Thus, private companies or

other entities not included in section 13-803 would not be public

agencies and are unauthorized to be parties to an interlocal

agreement under the Act.




In responding to this question, it is appropriate to point out

the distinction between members of the legal entity formed and

parties to the interlocal agreement. Of course, the membership of

a particular legal entity is determined by the nature and

organization of the legal entity that is created. The Act provides

that any agreement entered into shall, among other things, specify

the general organization, composition, and nature of the legal or

administrative entity created. See Neb. Rev. Stat. § 13-804(3)(b)

(Cum. Supp. 1996).




The interlocal agreement that is the subject of this opinion

provides that the board shall consist of a maximum of fifteen

members. The members are individuals including two members of the

Custer County Board of Supervisors and representatives from each

municipality that is a party to the agreement. INTERLOCAL

COOPERATION AGREEMENT for CUSTER COUNTY DEVELOPMENT BOARD, p. 1.




Obviously, groups and associations, whether for profit or non-

profit organizations are not individuals and the agreement does not

include organizations amoung its membership. However, we are not

aware of any requirement that all members of the Board be employees

or representatives of public agencies or that the membership

exclude private individuals. We point out that most governing

bodies of political subdivisions include individuals that are

variously employed in the private and public sectors among their

membership.




The SECOND question is:




[I]f it is allowable under Nebraska R.R.S. Section

13-804(6) for a joint entity to allow for a profit or

non-profit "at-large" member of the group; may that

member either vote or be counted in terms of a quorum?




We believe that an individual who is a member of a profit or

non-profit organization may serve as a member of the Board as an

at-large member selected in accordance with the provisions of the

Interlocal Agreement. For purposes of this question, we assume

that an individual is a member rather than the organization. As we

pointed out in responding to question one, organizations that are

not public agencies cannot be parties to the agreement nor serve as

members. Whether a member may vote or be counted for purposes of

a quorum is dependent on the internal rules of governance adopted

by the Board. Generally, a governing body may establish internal

rules for its governance and procedure.




The common law rule pertaining to quorums and conducting

business is applicable in the absence of a policy or rules. That

is, a majority of all members of a board shall constitute a quorum

and a majority of the quorum qualified to act may decide to take

action. Petition of Kinscherff, 89 N.M. 669, 556 P.2d 355 (1976);

Federal Trade Commission v. Flothill Products, Inc., 389 U.S. 179,

88 S.Ct. 401, 19 L.Ed.2d 398 (1967). Accordingly, an at-large

member who is not an employee of a public agency may be included

for purposes of determining a quorum or voting in the absence of

Board rules to the contrary.




The THIRD question(s) presented is:




[I]s a joint entity created under the Interlocal

Cooperation Act restricted to exercising only powers that

all members of the interlocal are capable of exercising

on their own? Or, if one member of the interlocal is

capable of exercising a given power, may the other

members, obtain new powers as a result of being part of

the interlocal agreement?




As we have noted above, members of the Board and parties to

the agreement are not similar nor interchangeable terms. An

agreement under the Act may only be entered into by public

agencies. However, there is no requirement that membership of the

Board consist of government units or public agencies that are

parties to the agreement. Rather, the Board consists of up to

fifteen individuals that serve as the governing body of the Board.

This question was in part addressed in Op. Att'y Gen'l No. 96087

(December 18, 1996). In that opinion it was concluded:




. . . the Act is not intended to increase nor enhance the

substantive powers and authority of governmental

subdivisions. Rather, the Act authorizes governmental

subdivisions to act jointly for exercise of any powers,

privileges, or authority to the extent permitted by law.

Neb. Rev. Stat. § 13-804(1) (Cum. Supp. 1996). Local

governmental subdivisions have such powers and authority

as conferred by law. Counties and county boards can only

exercise such powers as are expressly granted by statute

which are strictly construed. (citations omitted).

Similarly, municipal corporations are creatures of the

law established for special purposes, and their corporate

acts must be authorized by their character and they

possess no power or faculties not conferred by the laws

which created them. (citations omitted).




Id. at 3. As you note, Neb. Rev. Stat. § 13-807 (1991) authorizes

public agencies to enter into contracts for performing functions

which each agency entering into the contract is authorized by law

to perform. Thus, the Board cannot exercise powers beyond those

conferred by law upon each of the governmental subdivisions that

are parties to the interlocal agreement.




You ALSO inquire:




[M]ay an interlocal provide services outside of the

geographic makeup of its members.




This question is highly fact specific and any conclusion is

dependent on the activities performed by the municipalities. As we

understand, the Board reportedly established a "community council"

in a municipality that is not a party to the agreement. You relate

that Custer County is not a party to the interlocal agreement. In

this respect, we point out that Custer County is set forth as a

party to the agreement in the copy of the document you furnished to

us. However, we assume that Custer County is not a party to

facilitate response to your inquiry.




We believe that it is appropriate for the Board to perform

certain economic development functions beyond the municipal

boundaries of the parties. We are not aware of any limitations

that restrict economic development activities of a city, community

or region to a specific geographic location. Economic development

activities are government powers that may be exercised by

municipalities. The Partnerships for Economic Development Act,

Neb. Rev. Stat. §§ 81-1288 to 81-1294 (Cum. Supp. 1996) expressly

authorizes communities and counties to further "collective economic

development efforts" and encourage collaboration with local areas

of the state among communities, counties, and economic development

providers and the private sector. See Neb. Rev. Stat. § 81-1290

(Cum. Supp. 1996). Accordingly, the municipalities that are

parties to the agreement are authorized by law to collectively

participate in regional economic development efforts.




While it is established that the Interlocal Cooperation Act

does not enhance the authority and power of government

subdivisions, it is also established that the interlocal agreement

cannot serve to curtail or prohibit the legislative or

administrative authority of the governmental subdivisions. See

Gallagher v. City of Omaha, 189 Neb. 598, 204 N.W.2d 157 (1973).

It seems to us that the fact Custer County is not a party to the

agreement does not diminish the authority of the municipalities

granted under the provisions of the Partnerships for Economic

Development Act.




Sincerely yours,




DON STENBERG

Attorney General










Fredrick F. Neid

Assistant Attorney General






Approved By:









Attorney General








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