This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on April 3, 1998, basing its approval solely on the facts and circumstances stated herein.
May the city's mayor and board of aldermen purchase real property from the city attorney's spouse?
Your opinion request to the Office of the Attorney General dated March 2, 1997, was referred by that Office to the Mississippi Ethics Commission on March 4, 1997, as your request involves the above issue that concerns the Mississippi conflict of interest laws.
State law restricts the Mississippi Ethics Commission to interpreting and issuing opinions on Sections 25-4-101 through 25-4-119, 1972 Mississippi Code Annotated and Article IV, Section 109, Mississippi Constitution of 1890. Therefore, this opinion does not address the Mississippi laws outside the Commission's jurisdiction nor the governmental entity's internal rules and regulations.
The pertinent conflict of interest laws to be considered here are:
Code Section 25-4-103 (a), (b), (f)(i)(ii), (g)(ii), (h), (k)(i)(ii)(iii)(iv), (p)(i)(ii)(iii) and (q) and states:
"(a) 'Authority' means any component unit of a governmental entity.
(b) 'Benefit' means any gain or advantage to the beneficiary, including any gain or advantage to a third person pursuant to the desire or consent of the beneficiary.
(f) 'Contract' means:
(i) Any agreement to which the government is a party; or
(ii) Any agreement on behalf of the government which involves the payment of public funds.
(g) 'Governmental' means the state and all political entities thereof, both collectively and separately, including but not limited to:
(ii) Municipalities.
(h) 'Governmental entity' means the state, a county, a municipality or any other separate political subdivision authorized by law to exercise a part of the sovereign power of the state.
(k) 'Material financial interest' means a personal and pecuniary interest, direct or indirect, accruing to a public servant or spouse, either individually or in combination with each other. Notwithstanding the foregoing, the following shall not be deemed to be a material financial interest with respect to a business with which a public servant may be associated:
(i) Ownership of any interest of less than ten percent (10%) in a business where the aggregate annual net income to the public servant therefrom is less than One Thousand Dollars ($1,000.00);
(ii) Ownership of any interest of less than two percent (2%) in a business where the aggregate annual net income to the public servant therefrom is less than Five Thousand Dollars ($5,000.00);
(iii) The income as an employee of a relative if neither the public servant or relative is an officer, director or partner in the business and any ownership interest would not be deemed material pursuant to subparagraph (i) or (ii) herein; or
(iv) The income of the spouse of a public servant when such spouse is a contractor, subcontractor or vendor with the governmental entity that employs the public servant and the public servant exercises no control, direct or indirect, over the contract between the spouse and such governmental entity.
(p) 'Public servant' means:
(i) Any elected or appointed official of the government;
(ii) Any officer, director, commissioner, supervisor, chief, head, agent or employee of the government or any agency thereof, or of any public entity created by or under the laws of the State of Mississippi or created by an agency or governmental entity thereof, any of which is funded by public funds or which expends, authorizes or recommends the use of public funds; or
(iii) Any individual who receives a salary, per diem or expenses paid in whole or in part out of funds authorized to be expended by the government.
(q) 'Relative' means the spouse, child or parent."
Code Section 25-4-105 (3)(a) and (4)(d) states:
"(3) No public servant shall:
(a) Be a contractor, subcontractor or vendor with the governmental entity of which he is a member, officer, employee or agent, other than in his contract of employment, or have a material financial interest in any business which is a contractor, subcontractor or vendor with the governmental entity of which he is a member, officer, employee or agent.
(4) Notwithstanding the provisions of subsection (3) of this section, a public servant or his relative:
(d) May be a contractor, subcontractor or vendor with any authority of the governmental entity of which he is a member, officer, employee or agent or have a material financial interest in a business which is a contractor, subcontractor or vendor with any authority of the governmental entity of which he is a member, officer, employee or agent: (i) where such goods or services involved are reasonably available from two (2) or fewer commercial sources, provided such transactions comply with the public purchases laws; or (ii) where the contractual relationship involves the further research, development, testing, promotion or merchandising of an intellectual property created by the public servant. "
Pertinent facts and circumstances provided by the requestor, absent identifying data, are set forth as follows and considered a part of this opinion.
The Board of Mayor and Aldermen of the City has authorized me as Associate City Attorney, to request an official opinion from you relating to the purchase of land owned by the City Attorney's husband.
Several years ago the City annexed approximately twenty (20) square miles. We are in the process of building a fire station that would service the annexed area. It is essential that we immediately begin construction of the fire station so that we maintain or improve our current fire rating. The property that has been determined to be the prime site, is owned by the city attorney's husband. The City Attorney does not vote and therefore would have no input in the decision to purchase this property.
The Fire Chief has recommended the site as being the most strategic site in terms of maximum response time. It is located on the corner of two main arteries for the east of the City. One artery also provides instant access to frontage road and Interstate, for better ambulance response to highway accidents.
The property in question will not be purchased entirely, as only about 40% of it is needed. It is adjacent to city right-of-way land, which the City wishes to reserve to remain eligible for state-aid highway funds.
We present several issues:
1. May we purchase the property?
2. If we are able to purchase the property, will we need an independent assessment as to the value of the property or are we able to negotiate the price?
3. Whether you foresee any ethical problems with the Mississippi Ethics Committee for the City in purchasing the property?
The Commission formally adopts Advisory Opinion No. 96-132-E in response to this request and by attachment incorporates it into this opinion.
Based solely on the facts and circumstances presented by the requestor, the Commission's opinion is as follows.
Code Section 25-4-105 (3)(a), cited above, prohibits the city board attorney from having a material financial interest in a contractor, subcontractor or vendor with the city's governing entity. The prohibition includes the selling of real property to the city.
Code Section 25-4-103 (k), cited above, provides that a material financial interest means a personal or pecuniary interest, either direct or indirect, accruing to a public servant or spouse, either individually or in combination with each other.
Therefore, the city attorney has a material financial interest in her spouse's selling of the property to the city.
Code Section 25-4-103 (k)(iv) provides an exception where the public servant's spouse is the contractor, subcontractor or vendor with the public servant's governmental entity and the public servant exercises no control, direct or indirect, over his or her spouse's contract with the public servant's governmental entity.
The exception in Code Section 25-4-103 (k)(iv) is not applicable in this instance as the city board attorney clearly has indirect control over the city's contract to purchase the real property as her firm has an obligation to advise the city not only on the purchase itself but also on any title issues.
Also, Code Section 25-4-105 (4)(d), cited above, provides exceptions to the prohibition set forth in Code Section 25-4-105 (3)(a). The exception applicable to this instance is found in Code Section 25-4-105 (4)(d)(i). The exception is "where such goods or services involved are reasonably available from two (2) or fewer commercial sources, provided such transactions comply with the public purchasing laws."
As set forth in the attached opinion, the term "goods or services" as used in this section does not include the selling, leasing or renting of real property.
Therefore, Code Section 25-4-105 (3)(a) prohibits the city attorney's
spouse from selling real property to the city.
Ronald E. Crowe
Executive Director