Responding to a resident complaint, the Kootenai County prosecutor has advised that two members of the Hayden Lake City Council face potential conflicts of interest.

In a memo to the council early last month, Barry McHugh indicated that councilmen Chris Beck and Tom Gorman could be directly impacted by decisions related to the Hayden Lake Country Club, of which they are both stock-holding members.

"Any action by the city's council members that has a positive impact on the income versus expenses of the HLCC affects the monthly dues of any shareholder," McHugh stated.

The council's recent issuance of a beer and wine license to the country club has a likely financial benefit, for instance, he wrote.

But the councilmen's votes to provide the license, as well as to expand the city's overlay zoning district to include HLCC, doesn't likely violate state law in using a public position for personal gain, McHugh conceded.

"Mr. Beck and Mr. Gorman acted in good faith upon the advice of counsel," he wrote. "In doing so, it would be very difficult to prove any of their actions were a knowing violation of the law."

He acknowledged the club is a nonprofit.

Beck and Gorman should likely recuse themselves on any HLCC related issues, McHugh said this week.

But he can't force them, he added.

"I can't tell them what to do," McHugh said.

William Bentz, the Hayden Lake business owner who filed the complaint, said he was concerned that HLCC would benefit from council decisions about maintenance of Bozanta Road, which he believes the club has interest in.

The club is also tied into the council's ongoing discussions about keeping Strahorn Road one-way, Bentz added, as widening the road could cut into HLCC property.

"I don't particularly care about Strahorn," he said. "What I do care about is the council members who are club members voting on the issue."

Mayor Nancy Morris said she is divided on whether the council members have a conflict.

"On the things they voted on, I don't think there's a personal gain," Morris said.

The City Council has almost always included HLCC members, she added. Conflict has never come up before, she said, because the HLCC was only annexed into the city about a decade back.

She looks to the city attorney to decide on when recusal is necessary.

"For Bozanta Road and Strahorn Road, I'm entirely leaving that up to legal counsel," she said.

Beck said the same.

"I think Mr. Bentz asked a valid question that needs to be answered," Beck said. "We all need to be mindful, and act accordingly."

Gorman pointed out that it would be tricky to have a city council with no HLCC members.

"Let's face it, there are only 500 citizens in the city, and there are 350 members (of HLCC)," Gorman said.

City Attorney Pete Bredeson stated that he disagrees that an elected official has a conflict because of stock ownership in a nonprofit corporation.

"However, I agree with his (McHugh's) ultimate conclusion that Mr. Beck and Mr. Gorman acted in good faith upon the advice of the counsel," Bredeson wrote in an email.

The attorney will keep McHugh's memo in mind for future conflict of interest questions, he added, "even though it doesn't carry the weight of a judicial determination."

There are no worries about council member Bob Grant, Morris said, who is a social member of the country club and has no financial interests there.

HLCC General Manager Les Hintz declined to comment on whether he thinks the club has much to gain from its high profile members.

But he is surprised the question has come up at all, he said.

"This has never been an issue before," Hintz said.