02-25-2015 Council Packet - Laserfiche WebLink

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RELEVANT LINKS: Stone v. Bevans, 88 Minn. 127,92 N.W. 520(1902). City of Minneapolis v. Canterbury, 122 Minn. 301, 142 N.W. 812 (1913). Currie v. Sch. Dist. No. 26, 35 Minn. 163, 27 N.W. 922 (1886). Singewald v. :Minneapolis Gas Co, 274 Minn. 556, 142 N.W.2d 739 (1966). Stone v. Bevans, 88 Minn. 127, 92 N.W. 520 (1902). Frisch v. City of St. Charles, 167 Minn. 171, 208 N.W. 650 0926). Mares v. Janutka, 196 Minn. 87, 264 N.W. 222 (1936). Nevada Commission on Ethics v. Carrigan, 131 S. Ct. 2343 (2011). 63C Am. Jur. 2d Public Officers § 246. However, a city may be legally blocked from performing an illegal contract. If a contract is invalid and does not fall under the cited exceptions, it does not matter that the interested councilmember did not vote or participate in the discussion. Likewise, it does not matter that the interested councilmember's vote was not needed for the council's approval of the contract. It is the conflict of interest that matters. Even if the councilmember acted in good faith and the contract was fair and reasonable, the contract is generally void if it is prohibited by the conflict of interest. When a prohibited contract is made with an interested councilmember, the councilmember may not recover on the contract. Nor may a councilmember recover value on the basis of an implied contract. If a councilmember has already received payment, restitution to the city can be compelled. For example, if the mayor is paid for services to the city under an illegal contract, a taxpayer could sue to recover the money for the city. It does not matter that the mayor was not present at the meeting at which the agreement for compensation was adopted. If a councilmember has made an unlawful sale of goods to the city and the goods can be returned, a court will probably order it and prohibit any payment for the goods. This might be ordered when a lot has been purchased from a councilmember and no building has been erected on it, or if supplies, such as lumber, have been bought and not yet used. However, if the goods cannot be returned and if the contract was not beyond the powers of the city and there was no fraud or collusion in the transaction, the court will determine the reasonable value of the property and permit payment on the basis of the value received. In case of doubt, it is wise to assume a city cannot contract with one of its officers. If the contract is necessary, a legal opinion or court ruling should be secured before proceeding. B. Non -contractual situations While the laws discussed previously relate only to contracts with interested officials, courts throughout the country, including the Minnesota Supreme Court, have followed similar principles in non -contractual situations. Any city official who has personal financial interest in an official non - contractual action is generally disqualified from participating in the action. This is especially true when the matter concerns the member's character, conduct, or right to hold office. Conflicts can also arise when the official's own personal interest is so distinct from the public interest that the member cannot fairly represent the public interest. League of Minnesota Cities Information Memo: 10/17/2014 Official Conflict of Interest Page 16