02-25-2015 Council Packet - Laserfiche WebLink

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RELEVANT LINKS: Singewalat v. Minneapolis Gas Co.. 274 Minn. 556, 142 N.W.2d 739 (1966). A.G. Op. 90-E-5 (Nov. 13, 1969). A.G. Op. 90a -I (Oct. 7, 1976). A.G. Op. 90e -I (May 12, 1976). A.G. Op. 90E-1 (Dec. 6, 1955). A.G. Op. 90a -I (Mar. 30, 1961). A.G. Op.90a-1 (Apr. 15, 1975). The Minnesota Supreme Court has held that employment by a company the city contracts with may give a councilmember an indirect interest in the contract. On the other hand, the attorney general has advised that if a councilmember is an employee of the contracting firm and his or her salary is not affected by the contract, the council may determine that no personal financial interest exists. The attorney general has said that factors other than employment may have to be considered to determine whether a prohibited interest is present. The attorney general concluded that a council may contract with the employer if: • The councilmember has no ownership interest in the firm. • The councilmember is neither an officer nor a director. • The councilmember is compensated with a salary or on an hourly wage basis and receives no commissions, bonus or other remuneration. • The councilmember is not involved in supervising the performance of the contract for the employer and has no other interest in the contract. The law prohibits making a contract with any public official who has had the opportunity to influence its terms. The attorney general has advised that a former councilmember could not be a subcontractor on a municipal hospital contract if he was a councilmember when the prime contract was awarded. Questions that are more difficult can arise when a councilmember takes office after a city has entered into a contract. The assumption of office by someone with a personal financial interest in an already existing contract raises concerns about possible conflicts of interest during the performance of the contract. In one case, the attorney general advised that a councilmember was eligible for office and entitled to commissions on insurance premiums payable by the city on an insurance contract entered into before the person became a councilmember. In an informal letter opinion, the attorney general said the director of a malting company could assume office as a councilmember even though the city had entered into a 20 -year contract with the company to allow it to use the city's sewage disposal plant. The contract also fixed rates for service subject to negotiation of new rates under certain circumstances. The attorney general said the councilmember could continue to serve as long as no new negotiations were required. However, no new agreement could be entered into as long as the interested councilmember held office. Individuals faced with a possible conflict of interests should seek legal advice. League of Minnesota Cities Information Memo: 10/17/2014 Official Conflict of Interest Page 13