Ethics Advisory Opinion No. 94
Issued By: City Attorney’s Office
I. Issue: May a
member of a city board that is more than advisory in nature or his business
contract with the City of
A member of a board that is more than advisory in nature owns a business entity that is interested in seeking an agreement with the city. He asks whether his business would be precluded from entering into such an agreement. The board on which he serves will have no contact or involvement with the proposed agreement between the city and the member’s business entity.
The City Charter and the Ethics Code both prohibit city officers and higher-level staff members from having an interest in a contract with the city. Section 141 of the City Charter states:
“No officer or employee of the City shall have a financial interest, direct or indirect, in any contract with the City, or shall be financially interested, directly or indirectly, in the sale to the City of any land, materials, supplies, or service, except on behalf of the City as an officer or employee. Any willful violation of this Section shall constitute malfeasance in office, and any officer or employee guilty thereof shall thereby forfeit his office or position. Any violation of this Section, with the knowledge, expressed or implied, of the person or corporation contracting with the Council shall render the contract involved voidable by the City Manager or the Council.”
This prohibition is reiterated in Section 2-52 of the Ethics Code.
“City officers” include
(A) the Mayor or any Council member;
(B) a Municipal Court Judge or Magistrate; and
(C) a member of any board or commission which is more than advisory in nature. The term does not include members of the board of another governmental entity even if some or all of these members are appointed by the city.
The designation of a board as advisory or more-than-advisory is critical. This prohibition applies only to city boards or commissions members where the board is more than advisory in nature. The “prohibited interest in contracts” provision also applies to former city officers for a period of one year following the termination of their city service. City Code Section 2-58.
An officer is presumed to have the prohibited financial interest if any of the following is a party to the agreement:
§ the officer himself or herself;
§ the officer’s spouse, sibling, parent, child or other family member within the first degree of consanguinty or affinity;
§ any business entity in which the officer or his or her parent, child or spouse directly or indirectly own 10% or more than the voting stock or fair market value.
In addition, the prohibition applies if any of these individuals or entities are subcontractors, partners, or a parent or subsidiary business of a party to a city contact. Ethics Code, Section 2-52.
The sanction for an officer found to have willfully violated this prohibition is the forfeiture of the board member’s position with the city. The violation also renders that contract voidable by the City Manager or City Council. City Charter, Section 141. It is immaterial the official’s board will have no involvement in the proposed agreement between the city. The “prohibited contracts” provision strictly forbids an officer from having an interest in a contract with the city. Accordingly, the member of the more-than-advisory board cannot enter into a contractual relationship with the city.
A member of a more-than-advisory board or commission is prohibited from entering into a contractual relationship with the city under the City Charter and Ethics Code.