Agenda 04-14-22; 2 - Discussion on Board Members Voting on County Funding for, or Contracts with, a Non-Profit While Serving on a Non-Profit’s Governing Board

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2 1) BOCC members may resign positions as directors, officers, or governing board members of any nonprofit covered by the new law if that nonprofit receives outside agency funds from or otherwise contracts with the County. 2) The BOCC approves 1.2% of general fund county revenue to be awarded to outside agencies and authorizes the County Manager to allocate the funds. If the BOCC does not agree with any allocation, that particular allocation could be addressed through a budget amendment at which time a commissioner with a conflict could be easily excused or recused. This would eliminate direct involvement in an award by a covered commissioner. 3) An alternative suggested by the UNC School of Government is to adopt "a practice of stripping non-profits from (the) general budget ordinance and then including those nonprofits later via budget amendments. That procedure allows conflicted-out board members to vote on the general budget ordinance but recuse themselves from amendment voting." Similar to the first two options, utilizing this approach would eliminate the risk to individual board members. This could be done at the same meeting at which the budget is adopted because North Carolina Generl Statute (NCGS) 159-15 allows amendments, with few limitations, at any time after the budget ordinance is adopted. 4) Another alternative suggested by the UNC School of Government is to "vote on pieces of the budget in stages prior to adopting the final budget ordinance. While these votes are not binding, they allow the board to make individual policy decisions as they work through the budgeting process. This preliminary vote process offers a potential strategy for handling conflicts arising from a member's financial interest in a particular budget provision. Under this approach, the Board would take a preliminary (nonbinding) vote on the budget provision that involves the Board member's interest and excuse the interested member from voting on it. If the matter passes, then it can be incorporated into the final version of the budget ordinance. When the board member later votes on the final version of the budget ordinance, it will be clear from the preliminary vote that the member's vote was not necessary to approve the provision that involves his or her financial interest." This approach still carries risk due to the fact that impacted commissioners are still voting on the problematic item even though they earlier recused themselves. The new law prohibits any involvement. The first three options eliminate risk to covered commissioners. In addition to minimizing or eliminating risk to covered commissioners, options one through three also eliminate even the appearance of impropriety under the new law. As noted above, option four does not eliminate all risk. FINANCIAL IMPACT: There is no financial impact associated with this item. SOCIAL JUSTICE IMPACT: There is no Orange County Social Justice Goal impact associated with this item. ENVIRONMENTAL IMPACT: There is no Orange County Environmental Responsibility Goal impact associated with this item. RECOMMENDATION(S): The Manager recommends the Board discuss the options presented and any others that may be discussed, make a selection, and provide any other direction to staff.