Legal Q and A: The Selectmen's Authority 'To Manage the Prudential Affairs of the Town'

A fundamental principle in both the United States Constitution and the New Hampshire Constitution is the separation of powers among different branches of government. In designing municipal government, the New Hampshire legislature has evidently kept separation of powers firmly in mind. In towns, powers are apportioned among the town meeting and a long list of boards and individual officials charged with certain duties. Among boards and officials, the board of selectmen, of course, has unique statutory powers to administer the operations of the town, including authority to "manage the prudential affairs of the town." RSA 41:8. In the recent case of Gordon, Trustee v. Rye, No. 2009-836, June 15, 2011 (see Court Update in September 2011 New Hampshire Town and City), the New Hampshire Supreme Court was again called upon to interpret this "ancient statutory phrase," which has been traced to the Provincial statute of 1679.

Q. What does the Gordon case say about the selectmen's power to manage prudential affairs?

A. The case involved a dispute concerning whether a segment of road had in the past become a highway by prescription, that is, 20 years' consecutive use by the public. The board of selectmen held a public hearing under RSA 43, a procedural statute for making quasi-judicial decisions, and then determined that the road was not a public highway by prescription.

Abutters filed suit, claiming that the board of selectmen had no jurisdiction to make a quasi-judicial ruling concerning prescription. The Town argued that, pursuant to RSA 41:8, the board's responsibility to manage the prudential affairs of the town requires it to determine the status of a road when a dispute arises.

The Supreme Court held that only the superior court has jurisdiction to determine authoritatively whether a highway has been created by prescription. In addressing the prudential affairs powers under RSA 41:8, the Court quoted Rich Errol, 51 N.H. 350, 354-55 (1871). Selectmen:

can only exercise such powers and perform such duties as are properly incident to the special and limited authority conferred on them by their office…. In determining the meaning of the ancient statutory phrase,—"to manage all the prudential affairs of the town,"—it is worthy of note that the nearer we get to the time of the framers of the early statutes, the more restricted is the view that we find taken of the powers of selectmen.

Q. What other guidance do we have from the Supreme Court concerning the meaning of the selectmen's authority to manage prudential affairs?

A. Probably the leading case is Moulton v. Beals, 98 N.H. 461 (1954). In that case, the selectmen were directing certain ongoing litigation for the town. The town meeting voted specifically to assign control of the litigation to a special appointed committee. The Supreme Court upheld the town meeting action, finding that the selectmen were authorized to act in the absence of action by the town meeting, but the selectmen's prudential affairs authority was superseded by a specific directive of the town meeting. The Court summarized the precedent interpreting the scope of the prudential affairs powers:

The nature of the duties encompassed in management of "the prudential affairs of the town" has been considered in a number of the earlier cases…. "The particular duties comprehended within the meaning of the phrase 'prudential affairs' are not easily enumerated." [S]electmen have not been regarded as the general agents of the town, "clothed with the general powers of the corporate body for which they act." "They can only exercise such powers and perform such duties as are properly incident to the special and limited authority conferred on them by their office." They are "empowered to do only such acts as are required to meet the exigencies of ordinary town business."

98 N.H. at 463 [citations omitted]. The Court addressed the specific issue in the case:

Doubtless in the absence of special action by the town, the selectmen would be under a duty to protect the interest of the town … and in the event of doubt to seek its instructions by calling a special meeting. But the town was free to place the management of the litigation in the hands of a special committee, or the selectmen, as it might see fit, with such instructions as it might choose to give with respect to counsel or otherwise…. "In New England town meetings the voters are the sovereigns, and their will, when duly expressed, is supreme."

98 N.H. at 463-64 [citations omitted].

Q. What do those earlier cases say about the selectmen's authority to manage the town's prudential affairs?

A. They are of limited use. Several decisions upheld the selectmen's actions in peculiar situations that would not arise today. For example: personally paying the town's debts and then recovering the sums from the town, Sanborn v. Deerfield, 2 N.H. 251 (1820); executing a promissory note for the support of a pauper when no cash was on hand, Andover v. Grafton, 7 N.H. 298 (1834). Other decisions approved actions that would be routine today. For example: indemnifying a tax collector for costs of defending suits by third parties against the tax collector, Pike v. Middleton, 12 N.H. 278 (1841); filing suit for the town to recover money improperly paid out, Albany v. Abbott, 61 N.H. 157 (1881). A few disapproved actions that would also be disapproved today. For example: borrowing without a vote of the town, Rich v. Errol, 51 N.H. 350 (1871).

Q. Are there any other recent court decisions on the selectmen's prudential affairs?

A. The only other relatively recent reported case is a decision of the United States District Court, Rossi v. Pelham, 35 F.Supp.2d 58 (D.N.H. 1997), in which the tax collector sued the town and its officials for alleged civil rights violations and other torts when the selectmen posted a police officer at the tax collector's office to prevent her from removing records shortly before her last day in office. In determining whether the selectmen were acting within the scope of their office, and therefore immune from liability, the Court ruled that "the authority to manage the prudential affairs of the town would ordinarily include authority to take apparently necessary measures to protect the town records from threatened destruction." Id. at p. 75.

Q. So, under Moulton v. Beals, can the town meeting pass specific warrant articles to eliminate the selectmen's management role?

A. The town meeting can certainly narrow the selectmen's role by specific warrant articles in some instances. However, as RSA 41:8 provides, the selectmen "perform the duties by law prescribed" as well as "manage the town's prudential affairs." The vast majority of the board of selectmen's powers and duties come from specific statutes. Some of the most important of these statutes are:

  • Budget administration, RSA 32. Town meeting cannot restrict selectmen's statutory authority to transfer unexpended funds within the adopted budget. McDonnell v. Derry, 116 N.H. 3 (1976); Sullivan v. Hampton, 153 N.H. 690 (2006).
  • Financial accounting and safeguarding, RSA 41:9. The selectmen have important financial duties that apply generally to town officials and employees, including internal control procedures for "safeguarding" all town assets and properties.
  • Property tax assessment, RSA 72-76. Town meeting cannot usurp the selectmen's authority to assess property for taxation, Winchester Taxpayers' Ass'n v Winchester, 118 N.H. 144 (1978), or to abate taxes. Hampstead v. Plaistow, 49 N.H. 84 (1869).
  • Regulation of town highways and commons, RSA 41:11. The power granted to the selectmen includes setting speed limits, enacting winter storm parking controls, and regulating sidewalks and bridges.
  • Management of town property, RSA 41:11-a, unless assigned to another board by statute or town meeting vote.

There are many other instances of statutes that expressly assign particular powers and duties to the board of selectmen.

Q. If the selectmen's authority comes mostly from specific statutes, then how does the selectmen's prudential affairs power apply in modern town government?

A. The value of the authority "to meet the exigencies of ordinary town business" should not be underestimated. The selectmen are uniquely empowered to protect the town's interests when no other board or official is specifically charged with the responsibility.

Also, notwithstanding the many specific statutory powers of the selectmen and other boards and officials, there are some important town government functions that are not expressly assigned by statute. One such function is comprehensive personnel management. Various statutes refer to authority of the police chief, fire chief, road agent, library trustees, land use boards, etc. to hire or manage employees. But it often falls to the board of selectmen to make staffing decisions and adopt a comprehensive personnel policy to systematically manage hiring, compensation, discipline and termination of town employees.

Another important function frequently handled by the board of selectmen through its prudential affairs powers is the purchasing of goods and contracted services, by competitive bidding or other purchasing policies.

As mentioned previously, under Moulton v. Beals the town meeting can, by specific warrant article, take a greater role in these areas.

Q. Does the town meeting have the power to pass ordinances to manage the town's "prudential affairs"?

A. Yes, under RSA 31:39 (l) towns have authority, by town meeting vote, to make bylaws for "making and ordering their prudential affairs." This section has been held to authorize various police power ordinances (including surfing regulations, State v. Zetterberg, 09 N.H. 126 (1968)), but it was interpreted narrowly in the leading case of Girard v. Allenstown, 121 N.H. 268 (1981). In Girard the town meeting sought to implement a rent control ordinance under the town's "prudential affairs" authority. In invalidating the ordinance, the Court held that this phrase does not confer "unfettered" power on a town, but "merely grant[s] those powers that are necessary and proper in the execution of powers that have been specifically granted to the towns."

Local officials in NHMA-member municipalities may contact LGC's legal services attorneys for more information on this and other topics of interest Monday through Friday, 8:30 a.m. to 4:30 p.m., by calling 800.852.3358, ext. 384. School officials should contact the New Hampshire School Boards Association attorney at 800.272.0653.