This Advisory Opinion concerns the issues listed hereinafter as formulated from facts and/or  circumstances furnished by a requestor. The Commission approved this opinion on April 2, 2004, basing its  approval solely on the facts and circumstances stated herein.
 

ISSUE 1a:  May a school district continue a contractual relationship with an  Internet and local telephone service provider within one year of the  resignation of a school board member who is employed by the  provider?

ISSUE 1b:  May a school district convert its contractual relationship with an  Internet and local telephone service provider to a state contract  within one year of the resignation of a school board member who is  employed by the local telephone service provider?

ISSUE 1c:  May a school district contract with an independent reseller of local  telephone and Internet service within one year of the resignation of  a school board member who is employed by the local telephone and  Internet service provider from which the new service will originate?

ISSUE 1d:  May an employee of a school district’s local telephone and/or  Internet service provider, or a company proposing such services, be  a member of the school board when the district’s relationship with  the provider is either direct or through a state contract, and, if such  an individual may serve on the board, must he or she recuse from  matters concerning his or her employer?

ISSUE 2a: May a school board member’s business receive payments from the school district, even if he or she refunds those payments to the district?

ISSUE 2b: May a school district contract with a former commercial tenant of a board member?

ISSUE 2c: May a school district accept contract proposals from a former commercial tenant of a board member?

ISSUE 2d: Must a school board member recuse from matters concerning his or her former commercial tenant?

ISSUE 2e: Must a school board take additional curative action after a board member whose business accepted payments from the district has refunded those

ISSUE 2f: May a municipal separate school board member be a contractor with the municipality which appoints members of the school board?

ISSUE 3a: May a school board contract with a community college for testing services while a member of the board is employed by the community college in a job unrelated to the testing services?

ISSUE 3b: Must a school board member who is employed by a community college recuse from approval of payments to the community college when the member’s job is unrelated to the payments?

ISSUE 3c: Must a school board take any curative action when it contracts with a community college for testing services while a member of the board is employed by the community college in a job unrelated to the testing services?

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:

Constitutional Section 109 states:
 

“No public officer or member of the legislature shall be interested, directly or indirectly, in any contract with the state, or any district, county, city, or town thereof, authorized by any law passed or order made by any board of which he may be or may have been a member, during the term for which he shall have been chosen, or within one year after the expiration of such term.”

Code Section 25-4-103(a), (c), (d), (e), (f)(i)(ii), (g)(iii), (h), (i), (k)(i)(ii), (l) and (p)(i)(ii)(iii) states:
 

“(a) ‘Authority’ means any component unit of a governmental entity.

(c) ‘Business’ means any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, holding company, self-employed individual, joint stock company, receivership, trust or other legal entity or undertaking organized for economic gain, a nonprofit corporation or other such entity, association or organization receiving public funds.

(d) ‘Business with which he is associated’ means any business of which a public servant or his relative is an officer, director, owner, partner, employee or is a holder of more than ten percent (10%) of the fair market value or from which he or his relative derives more than One Thousand Dollars ($1,000.00) in annual income or over which such public servant or
his relative exercises control.

(e) ‘Compensation’ mean money or thing of value received, or to be received, from any person for services rendered.

(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) ‘Government’ means the state and all political entities thereof, both collectively and
separately, including but not limited to:
 

(iii) All school districts.

(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.

(i) ‘Income’ means money or thing of value received, or to be received, from any source derived, including but not limited to, any salary, wage, advance, payment, dividend, interest, rent, forgiveness of debt, fee, royalty, commission or any combination thereof.

(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).

(l) ‘Pecuniary benefit’ means benefit in the form of money, property, commercial interests or anything else the primary significance of which is economic gain. Expenses associated with social occasions afforded public servants shall not be deemed a pecuniary benefit.

(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.”

Code Section 25-4-105(1), (2), (3)(a), (4)(d) and (6) states:
 

“(1) No public servant shall use his official position to obtain pecuniary benefit for himself other than that compensation provided for by law, or to obtain pecuniary benefit for any relative or any business with which he is associated.

(2) No public servant shall be interested, directly or indirectly, during the term for which he shall have been chosen, or within one (1) year after the expiration of such term, in any contract with the state, or any district, county, city or town thereof, authorized by any law passed or order made by any board of which he may be or may have been a member.

(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.

(6) Any contract made in violation of this section may be declared void by the governing body of the contracting or selling authority of the governmental subdivision or a court of competent jurisdiction and the contractor or subcontractor shall retain or receive only the reasonable value, with no increment for profit or commission, of the property or the services furnished prior to the date of receiving notice that the contract has been voided.”

Pertinent facts and circumstances provided by the requestor, absent identifying data, are set forth as follows and considered a part of this opinion.
 

This letter is to request an advisory opinion on behalf of the Board of Trustees of a Municipal Public School District, for which I became Board Attorney on February 25, 2004. It is my understanding that your advisory opinions are restricted to interpreting Sections 25-4-101 through 25-4-119, Miss. Code Ann. (1972), and Art. IV, Section 109. Mississippi Constitution of 1890, and that requests for opinions concerning other laws are to be addressed to the Mississippi Attorney General. Accordingly, I am this day also sending a similar request for an Attorney General s opinion on this subject matter insofar as it may pertain to Section 37-11-27, Miss. Code Ann. (1972), or any other laws.

The factual background is as follows. Recently the Mayor and City Council approved an appointment to the Board of Trustees of the Municipal Public School District for a person who is an employee of a bank doing business with the School District. On February 27, 2004, before the March 1, 2004, effective date of his appointment, this potential member
announced that he was declining the appointment because of his employer's business with the School District. This situation gave rise to a fresh, internal review of the status of employers of existing board members in relation to whether their employers had any business with the School District. The results of this review are as follows:

· Two current members of the Board of Trustees are retired and have no outside employment or business interests.

· One seven-year member of the Board of Trustees voluntarily resigned on February 27, 2004, and has not yet been replaced. This former member was originally appointed to the Board on March 1, 1997.
 

o This former member's employer is a utility company that currently provides and had been providing local telephone services to the School District for many years prior to their employee becoming a member of the Board. (Long distance services are provided by a different unrelated company.)

o The regular telephone service (sometimes called "POTS", an acronym for "plain old telephone service") provided by this company is known as an Essx system that has been provided to the Municipal School District under a contract between the District and the telephone company for a ten-year term that began January 18, 1994, three years before the telephone company s employee became a member of the School Board.

o In January of 2003, a new contract was entered between the District and this telephone company to extend the POTS telephone services for two years beginning on July 1, 2003, and to replace the Essx service system with a newer system called a Centrex service system, although the conversion to the Centrex system has not yet occurred.

Apparently there was no action by the School Board to extend and enter this new service contract, which was executed by the then District Business Manager. As explained more fully below, it is my understanding that this two-year extension was in response to an advertisement for proposals to which only one response was received, and that response was from the previous and current telephone service provider. It is my understanding that both the Essx system and the Centrex system were at that time and are now available under State contracts. (Information regarding State contracts for telephone services and data services is available from the Mississippi Department of Information Technology Services (ITS), and Mr. Jimmy Webster and Mr. Gary Rawson of ITS are familiar with these issues.)

o Telephone services and data (internet) services are eligible for a program known as the "e-rate" program regulated by the School and Library Division of the FCC. The e-rate program provides for rebate of a large portion of telephone and data service expenses.

Rebates are obtained upon the District s application for rebate according to a formula based on demographics and other local school district information. E-rate rebates are based on fiscal year applications, and a disruption in a contract for services during a fiscal year could jeopardize the rebate to the District.

o Although the District is not required by state law to advertise for the POTS telephone services, the e-rate program has an advertising procedure which is a pre-requisite for eligibility for rebates. The District followed this advertising procedure for the above-described new POTS contract that was signed in January of 2003 and became effective at beginning of the fiscal year on July 1, 2003. The only company to respond to this advertisement was the current telephone service provider who is the employer of this former Board Member. Therefore, the sole source for this regular POTS telephone service that would allow the District to be eligible for the e-rate rebate for the current fiscal year is the current service provider. Also, as mentioned above, there is a State contract available for these same POTS services, and it is my understanding that, if necessary, terminating the current POTS service contract and simultaneously picking up the same service under the State contract would allow for a seamless transfer of contracts without a disruption in services and without losing the eligibility for the e-rate rebate for this fiscal year.

o The current telephone provider that employs the former Board Member is also the provider for data (internet) online services within the District, comprising the District's intranet service that connects to the State of Mississippi s statewide internet service line. However, since the inception of this data service for the District in 1998, the District has used State contract #MS985477-0 for this District data service, and the State contract is with the same telephone (data) service provider. Also, at the time of beginning this data service, this telephone (data) service provider was the only provider that would make the District eligible for e-rate rebates for this data service.

o However, the School District s current Business Manager is in the process of obtaining competitive proposals (even though it appears that competitive bids for such services are not required by law) from other companies to replace these POTS and telephone and data (internet) services, in order to be prepared in the event it is your opinion that such action is required. The current request for proposals (RFP) for replacement services presently excludes the former Board Member s employer from this RFP and from the opportunity to bid on these services for one year after his February 27, 2004 resignation. However, it appears that there are companies who hold rights to, and can re-sell certain telephone and internet services of the current telephone utility, and such re-seller companies are being asked to respond to the RFP.

o Allowing the School District to continue its data services with the current telephone provider under the State Contract and further allowing the District to continue its POTS telephone services with the current provider either under the current sole, source contract, or switching seamlessly to the parallel State contract for POTS would result in little or not disruption, down-time and lost time by District personnel and would likely avoid any loss of eligibility for e-rate rebates. The selection of a re-seller of the current provider s services would be a second best option for avoiding losses in a transfer of the services to a new provider. However, for the remainder of the current fiscal year, transferring to a new provider, even a re-seller, may jeopardize the e-rate rebate.

o If you advise that replacement of the current telephone and/or data (internet) services contracts is required, then, as soon as reasonably possible, a new telephone and data (internet) services provider or providers will replace the current contract.

o Meanwhile, since it is impractical and not in the best interests of the School District to be without telephone and internet services, the District will pay invoices for current services through the date of transference to the new provider, if a new provider is required.

o We note that this former Board Member had consistently disclosed his employment with the telephone service provider on his annual Statements of Economic Interests filed with the Mississippi Ethics Commission. It is my understanding that the minutes reflect no votes by the Board during this former Board Member's seven-year term, regarding the three telephone service contracts in question. To recap this point the January 18, 1994, ten-year POTS contract was entered three years before this Board Member began his term; the January 2003, two-year contract for POTS was a sole-bid, sole-source contract for services entered by the District business office without a vote of the Board; and the 1998 data services contract is a State contract which the District uses for this service.

o Further it is my understanding that this former Board Member s salary and benefits from his employer were in no way dependent upon the employer's contracts for these services—that is, he received no commission or other enhancement and his employment was not dependent upon this contract.

o Nevertheless, this Board Member has resigned, and his employer s contracts will be terminated and replaced as quickly as reasonably possible, if you advise that such action is required.

· One current Board member is the proprietor of a dry cleaning business.
 

o In the past, his company had on occasion provided some dry cleaning services for some student activities for free. His company does not have a contract with the District.

However, on one occasion in June of 2003, his company was paid a small amount for bulk cleaning of high school dance team uniforms that were soaked due to an AC leak, and on two other occasions, in 1993 and 2001, his company was paid for similar small cleaning jobs. Upon calling these payments to his attention, this Board Member promptly reimbursed the District the total amount of these three payments.

o The same Board member mentioned in the paragraph above also has an office building in which he had a tenant who is a professional photographer that had been providing photographic services to high school seniors for their senior portraits and to the high school annual staff for many years prior to being a tenant of this Board member. The students are under no obligation to purchase any pictures from this photographer. The selection of the photographer to provide these services is made on an annual basis, and the current agreement was adopted on February 10, 2004. This photographer was in the process of moving to a new office, and at the end of February, 2004, this photographer ceased being a tenant of the Board member s company. No payments have been made by the District to this photographer under his current agreement. However, in an abundance of caution, the Business Manager is conducting a new RFP for this service to include the current photographer, with the intent of putting a new agreement in place, superceding the February 10, 2004 agreement, if you advise that such action is necessary.

o This photographer also did matting and framing services for retirement certificates for the District on a total of two occasions in fiscal year 2002-2003 and one occasion in September of 2003. It appears that these services are not included in the annual portrait agreement and were obtained by purchase orders from the business office.

o It is my understanding that this Board Member did not receive any benefit from his tenant s business with the District.

o This same Board Member has on occasion provided dry cleaning services for the government of the City, which is the appointing authority for the Board of Trustees. This Board Member does not currently have a contract with the City.

· Another Board member is an employee of the local public Community College. The Community College provides G. E. D. testing services for the Municipal Public School District and had provided these services for years before this Board Member was appointed. There is no written contract for these services, and they are provided on an as-needed basis by purchase orders. It is my understanding that this Board Member works in a department of the Community College entirely unrelated to the G.E.D. testing services and that this Board Member s employment with the Community College is not related to the G.E.D. testing services in any way. This Board Member has also recused herself from voting on payments for these G.E.D. services.

· With regard to the actions of all of the Board Members described in the fact situation above, it does not appear that any Board Member nor any other person knowingly or willfully violated the provisions of Miss. Code Ann., Sections 25-4-101
through 25-4-119; Art. IV, Section 109, Mississippi Constitution of 1890; or Miss. Code Ann., Section 37-11-27 (1972).

The Board of Trustees requests an advisory opinion regarding the following questions:

1. With regard to the situation concerning telephone and data (internet) services:

a. May the District continue to use its current data (internet) service provider under the State Contract for this service even though an employee of the State contractor was a member of the Board in 1998 at the time of beginning the service under this State Contract and continued to be a member until February 27, 2004?

b. May the District continue to use the POTS telephone service provider under the current sole-source contract for POTS services, which was entered January, 2003, and effective July 1, 2003, even though an employee of this provider was a Board Member at the time of entering the current contract? We note that this same provider had been servicing the District since three-years prior to the subject Board Member s initial appointment on March 1, 1997. We note that this provider was the sole bidder for the new (extension) contract in January of 2003. and we note that this provider was the in the nature of a sole-source provider, because this provider was the sole responder to the advertisement for proposals that would make the services eligible for e-rate rebates. We note that there was no action taken by the Board to approve this contract that was
entered by the former business manager and for which there is a corresponding State contract.

c. If the answer to 1 .b., above, is "no", then may the District convert this POTS service to a State contract for these services, even though a former Board Member who resigned on February 27, 2004, is an employee of the provider under the State contract?

d. If the answers to any one or more of the questions in 1.a..1.b.. or is., above, is "no", then may the District obtain such services under a new contract with an independent re-seller of services provided by the current service provider, even though the provider is the employer of a former Board Member who resigned on February 27, 2004?

e. If it is your opinion that it is necessary to terminate the use of services from the current provider to, the POTS telephone services, or the data (internet) service, or both, is it also necessary to exclude the current provider, who is the employer of the former Board Member, from being eligible to respond to an RFP and enter a similar contract or contracts for one year after the February 27, 2004, date of resignation of the Board Member?

f. If it is necessary to terminate use of services from the current provider under either the current POTS contract or the State Contract for data services, or both, may the District continue telephone and data (internet) services with the current provider for the short period until the new provider or providers can be put in place?

g. Is any other curative action by the Board of Trustees required in this above-described situation regarding telephone and data (internet) services from the provider who is employer of the former Board Member?

h. If it is your opinion that the School District may continue to use the services of the current sole-source provider for POTS and the same current provider under the State Contract for data, then in that event, in the future may an employee of the provider under the current sole-source contract and under the State Contract (or under two State Contracts if the POTS is converted to a State Contract) be appointed in the future to serve as a member of the School Board during the term of such contracts? If so, should such a member recuse himself or herself from voting on matters pertaining to such services? Also, in obtaining future contracts for POTS service and data service, can a member of the Board be an employee of (i) a company making a proposal and/or (ii) a company selected to provide such service, and if so should such a member recuse himself or herself from voting?

2. With regard to the situation pertaining to dry cleaning services:

a. Is the reimbursement by the Board Member of the payments his company received sufficient to cure that matter?

b. Is the re-bidding and award of a new photographer services agreement necessary, since the current photograph is no longer a tenant of a Board member?

c. If a new photographer services agreement is necessary, is it permissible to include in the RFP the photographer who had the previous contract and who is no longer a tenant of the Board Member?

d. If a new photographer services agreement is necessary, should the Board Member recuse himself from voting on the new photographer services agreement?

e. Is any other curative action by the Board of Trustees required in this situation regarding past dry cleaning services by the Board Member and the photographer services agreement by his former tenant?

f. May the Board Member provide cleaning services to the appointing authority, the City, in the future?

3. With regard to the situation pertaining to G.E.D. services:

a. May the School District continue to obtain G.E.D. testing services, when needed, from the Community College while its employee is a Board Member?

b. If so, should the Board Member recuse herself from voting on payment for the G.E.D. testing services?

c. Is any curative action by the Board of Trustees required in this situation regarding past and future G.E.D. testing services?

In considering these questions, I respectfully request that you consider the following observations. I have reviewed the AG. Opinion to Carmichael No. 2002-0745, January 10, 2003, and it does not appear to apply to the fact situations stated hereinabove. All of the contracts at issue herein are contracts for services. The only on-going current contracts (the State contract for data services and the local contract for telephone services) were sole source contracts at the time of entering them, because the District could obtain e-rate rebates only through the provider under those two contracts. Furthermore, the use of the telephone services, data services, framing and mating services and G.E.D. testing services were not based on contracts made or let by the School Board. The January, 2003, contract for telephone services was made by the District Business Manager without any vote of the Board, and the Business Manager entered this service contract with the only
proposer to respond to advertisement, as a result of which at that time only this source for telephone services would make the District eligible for the substantial savings of the e-rate rebate. The 1998 contract for data services is a State Contract that the School Board did not vote on. Again the District business staff procured these data services from this provider under the State Contract, because this provider was the only source at the time that would make the District eligible for the e-rate rebate. The framing and mating services by the then tenant-photographer were not by contract by vote of the Board but by
purchase orders from the District Business office. The other photographer services, for senior pictures and annual staff photos, are not paid by District funds but are voluntary payments by students if they desire such photos. The G.E.D. services were not, and in the future would not be, obtained by contract by vote of the Board but by purchase orders from the District Business office. Miss. Code Ann., Section 37-11-27 (1972), pertaining to possible conflicts of interest in contracts involving public schools does not mention "services among the described impermissible contracts. In Pittman v. Ladner, 512 So. 2d 1271, 1277 (Miss. 1987), the Mississippi Supreme Court stated in reference to Miss. Code Ann., Section 37-11-27 (1972), that the statute pertains to ‘any contract made or let by the board of education for construction, repair or improvement of a school facility." None of the service contracts in our fact situation above were or are contracts "for construction, repair or improvement of a school facility," nor were they contracts ‘made or let" by the School Board.

Regarding Miss. Code Ann., Sections 25-4-101 through 25-4-119 (1972) and Art. IV, Section 109, Mississippi Constitution of 1890, I respectfully call your attention to the recent case of Jones v. Howell, 827 So. 2d 691 (Miss. 2002). In Jones v. Howell, at page 700, the Mississippi Supreme Court states that "there are ‘practical limits to the application of
Section 109," and that "common sense" must be applied to the analysis of Section 109. At page 701, our Supreme Court held that
 

Strong public policy considerations undergird the need for a reasonable interpretation of Section 109. Nor should Section 109 be applied in a manner which would render vast sectors of our society ineligible for service in our Legislature... The need for members who possess particular skills as a result of education and training cannot be overemphasized.

Further, our Supreme Court held in Jones v. Howell, supra at 702:
 

Thus, while Section 109 is laudable, its application must be tempered and balanced according to the facts of each case.
 

The need for honesty in government must be balanced against the legitimacy of public officials having private interests. Otherwise, [restrictions like §109 and implementing statutes] could effectively deter qualified people with expertise in their respective fields from entering public office for fear that any private interest could result in a conviction for having a conflict of interest. [citing Miss. L.J. 677 (1982).]

With great respect for your office, I submit that the same public policy argument should apply to ensure that vast sectors of our society be eligible for service on school boards. Your immediate attention to this request would be greatly appreciated. Thank you very much.

Based solely on the facts and circumstances presented by the requestor, the Commission’s opinion is as follows.

This request partially involves past conduct. The Commission does not opine on past conduct, since opinions are advisory and therefore prospective in nature. The Commission cannot and does not condone or endorse past conduct, nor does an opinion provide any protection from liability for past conduct. However, the requestor asks whether a repetition of some of the past conduct described herein would constitute a violation in the future. Any segments of this opinion which may relate to past conduct are provided only for future reference in the event those circumstances may recur. Specifically, this opinion does not cover actions by the former school board member during his service on the board.
 

ISSUE 1a: May a school district continue a contractual relationship with an Internet and local telephone service provider within one year of the resignation of a school board member who is employed by the provider?

The Commission staff telephoned the requestor to ask for additional facts relevant to this issue and performed some independent research on surrounding facts. According to the requestor, the corporation providing the Internet and telephone service and employing the former board member is BellSouth, an international corporation with approximately 4 million long distance customers, 1.5 million high-speed
Internet customers and publicly reported revenues of $22.6 billion in 2003. The former board member holds the position within the corporation of Regional Manager for External Affairs and receives an annual salary in excess of $5,000.00. The former board member had nothing to do with the execution or performance of the contracts in question, and his or her compensation from the corporation was in no way connected to the district’s payments under the contracts.

This factual scenario is similar to that of Representative John Read, one of the appellees in Jones, et al. v. Howell and Read, et al., 827 So.2d 691 (Miss. 2002). The case involved legislators who were pharmacists receiving payments from the Mississippi Division of Medicaid either directly or indirectly. Representative Read was employed by Controlex Enterprise, doing business as Sav Rex Pharmacy, in Gautier, Mississippi. Id. at ¶ 11. Read was not a shareholder of Controlex, but he was a salaried employee. Id. Medicaid reimbursements went directly to Controlex, and Read’s salary was in no way based on those Medicaid payments. Id.

The Commission notes that the facts given in this request reveal no connection between this former school board member’s position in the corporation, his compensation from the corporation and the performance of the governmental contracts much like Read’s facts in Howell. This is a very large, international corporation, and this employee has nothing to do with the income generated by these contracts. Any interest this board member might have in the contract between his employer and his board after his resignation is so remote that a court could certainly deem it of no significance. To borrow a phrase from federal constitutional law, it does not rise to the level of constitutional scrutiny. Thus, the contracts are not void, and the school district may continue operating under the existing contracts within one year of the
former board member’s resignation.

Therefore, while a strong case can be made for a contrary interpretation of the Court’s opinions, the Commission feels compelled under these facts, and at this time, to state the contracts in question are not void under Section 109 and Code Section 25-4-105(2). However, this is a very narrow finding based upon the specific facts in this request, including the size of the business in question and the position of the board member within that business. This opinion should not be interpreted to have broader application to other circumstances.
 

ISSUE 1b: May a school district convert its contractual relationship with an Internet and local telephone service provider to a state contract within one year of the resignation of a school board member who is employed by the local telephone service provider?

This question is rendered moot by the Commission’s findings under Issue 1a.
 

ISSUE 1c: May a school district contract with an independent reseller of local telephone and Internet service within one year of the resignation of a school board member who is employed by the local telephone and Internet service provider from which the new service will originate?

This question is rendered moot by the Commission’s findings under Issue 1a.
 

ISSUE 1d: May an employee of a school district’s local telephone and/or Internet service provider, or a company proposing such services, be a member of the school board when the district’s relationship with the provider is either direct or through a state contract, and, if such an individual may serve on the board, must he or she recuse from matters concerning his or her employer?

This question is rendered moot because the individual former member in question has resigned from the board.
 

ISSUE 2a: May a school board member’s business receive payments from the school district, even if he or she refunds those payments to the district?

No. Here the business in question is owned by the board member. Clearly, this member has a very direct interest in payments authorized by the board during the member’s term, giving rise to a definite violation of Section 109 and Code Sections 25-4-105(2) and (3)(a). If the member voted to approve these payments, then the member also violates Code Section 25-4-105(1). Furthermore, there are no exceptions to Section 109 or Code Sections 25-4-105(1), (2) and (3)(a). The refund of payments, while notable, does not obviate the violation.
 

ISSUE 2b: May a school district contract with a former commercial tenant of a board member?

Yes. Once the landlord/tenant relationship ended, the board member’s interest in the tenant’s business and, thus, the potential for a conflict of interest were eliminated. Yet to be sure, a landlord has at least an indirect interest in his commercial tenant’s business, which can give rise to a conflict under Section 109 and Code Section 25-4-105(2).

The landlord would also have a material financial interest in the commercial tenant’s business if the rent exceeds $5,000.00 annually. Also, the commercial tenant’s company would be a business with which the landlord is associated if the rent merely exceeds $1,000.00 per year. These facts could result in conflicts under Code Section 25-4-105(3)(a) and (1), respectively.
 

ISSUE 2c: May a school district accept contract proposals from a former commercial tenant of a board member?

Yes. Refer to discussion under Issue 2b.
 

ISSUE 2d: Must a school board member recuse from matters concerning his or her former commercial tenant?

No. Refer to discussion under Issue 2b.
 

ISSUE 2e: Must a school board take additional curative action after a board member whose business accepted payments from the district has refunded those payments and whose commercial tenant was a contractor with the district but has discontinued the landlord/tenant relationship?

It is not possible for the board to limit or undo the conflict of one or more of its current or former members.

Notwithstanding the above, the above cited Code Section 25-4-105(6) clearly states that any contract made in violation of this section [Code Section 25-4-105] may be declared void by the governing body of the contracting or selling authority of the governmental subdivision.
 

ISSUE 2f: May a municipal separate school board member be a contractor with the municipality which appoints members of the school board?

Yes. The municipality and the municipal separate school district are separate governmental entities. Code Section 25-4-105(3)(a) only prohibits the school board member from having certain business relationships with the school district.
 

ISSUE 3a: May a school board contract with a community college for testing services while a member of the board is employed by the community college in a job unrelated to the testing services?

This school board member has absolutely nothing to do with the execution or performance of the contract, and his or her compensation from the college is in no way connected to the district’s payments under the contract. Moreover, the college’s funding is not the least bit dependent upon the school district’s payments under the contract. Considering all the premises, the Commission finds this school board member has no interest whatever in the contract for testing services between the school district and the community college, and no conflict exists with regard to Section 109 or Code Section 25-4-105(2).

However, this too is a very narrow finding based upon the specific facts in this request. This opinion should not be interpreted to have broader application to other circumstances. If any of these facts change or if another board member finds himself or herself in a similar situation, another opinion from the Commission will be necessary. Situations like this one are highly fact specific, and determinations must be made by the Commission on a case-by-case basis.
 

ISSUE 3b: Must a school board member who is employed by a community college recuse from approval of payments to the community college when the member’s job is unrelated to the payments?

No. Recusal would serve only to avoid a violation of Code Section 25-4-105(1), but no conflict will arise under Code Sections 25-4-105(1) or (3)(a) because the community college is not a business, as defined in Code Section 25-4-103(c).
 

ISSUE 3c: Must a school board take any curative action when it contracts with a community college for testing services while a member of the board is employed by the community college in a job unrelated to the testing services?

Pursuant to the findings in Issue 3a, it is not necessary to take curative action.
 

Scott Rankin
Executive Director